Markets And Preferences And Longevity

The dairy industry is in a bit of trouble.  I don’t know if you saw this or not but it is evidence of a shift that has been underway for a while.  I think the entire food industry is shifting big time and it’s not totally clear how it will shake out.

For example, a lot of folks are going vegan or vegetarian while at the same time a lot of folks are pursuing protein-rich diets with lots of meat.

I lifted this from Dan Primack at Axios.

Califia Farms, a Los Angeles-based almond and oat milk producer, raised $225 million in new funding. Qatar Investment Authority led, and was joined by Temasek, Calridge, and Green Monday Ventures.

  • Why it’s the BFD: Milk was the original alt-protein battlefield, well before Beyond Meat bought its first petri dish, and has contributed to the recent bankruptcies of traditional, century-old like Dean Foods and Borden.
  • Existing investors include Ambrosia Investments, Stripes Group, and Sun Pacific.
  • Bottom line: “Annual cow milk sales fell to around $12 billion in 2019 from $15 billion in 2015, while almond milk sales have risen nearly 6% to $1.35 billion and oat milk a whopping 662% to $59.8 million in 2019, according to market research firm Nielsen.” — Nivedita Balu, Reuters

I think most people know that the US government food pyramid is false when it comes to actual health and wellness.  It’s a lobbied piece of junk.

The problem is when you do research, there is so much conflicting information it’s really hard to figure it out.  Should you eat fatty meat like bacon?  Or, should you avoid it?  Should it be a plant-based diet?  Or, should you avoid dairy?  Organic or not?  Intermittent fasting or not?  What kind of exercise?

We also have been conditioned to want individualized super focused/customized service but we expect that we should get it for free.  We have forgotten that there is no free lunch.

I saw a news story recently where a reporter couldn’t understand why a Wisconsin dairy farmer was supporting Trump.  The reporter wanted to blame tariffs for the dairy situation but the farmer knew better.  No doubt, tariffs hurt. However, milk consumption has been decreasing for years and years.  Decreased demand is not a recent phenomenon that farmers have to come to grips with.  Farmers have the best pulse on the market since they deal with it every day.  Public policy also incentivizes increased supply when it comes to dairy.  That’s a double whammy that is crushing the industry.

The major shift over the past several years has been to limit dairy consumption.  I remember seeing top athletes start to talk about limiting dairy and going gluten-free. Tennis star Novak Djokovic credits diet with his success.  Cam Newton went vegan.  Of course, he got hurt right away but the NFL will do that to you.

I invested in Simple Mills because you could see the sands shifting.

One reason dairy farming is tough is that it’s over-regulated.  That over-regulation from the USDA and FDA limits innovation. I remember the USDA wanting artisan cheese producers to use very sterile stainless steel to cure cheese.   Those agencies have run raw milk farmers out of business.

But, as the millennial generation marries and has kids, I bet dairy consumption increases a bit since kids consume a lot of milk.  Aging baby boomers might consume a little milk to help with bone density and teeth.  This might just be a short term dip because of demographics and not a tectonic shift.

Diets are basically fads.  Causation leads to some false correlation.  For example, The Okinawa Diet was popular.  Someone looked at the lifespan of people in Okinawa and decided it was the way they ate.  I can remember in the ’90s, it was the Mediterranean Diet.  Of course, we all have heard of Keto, Atkins and any number of diets that are supposed to make us live until we are 100.  My gut says there is a grain of truth in some of them but there is a lot of bunk out there.

However, I think there is a different path and of course, technology will guide the way.

My good friend Ryan Humphreys is CEO of Tool Box Genomics.   Tool Box looks at your DNA and figures out what diet is best for you.  They do a lot of historical genetic research, much deeper than a 23 and Me might do. The point is not to find actual ancestors but to map your individual footprint to find out what sort of combination of foods will be best for you.

Ryan came across it and tested himself.  He found that his DNA gave him a probability of encountering certain health maladies in the future, but if he changed his diet to match his personal DNA today he could lower the probability of those maladies occurring.  So, he did it.

As humans, our environment and standard of living can change rapidly.  Our genetic makeup and the history behind those genes don’t.  For example, in the Stone Age, maybe your genes were programmed to make more cholesterol because there just wasn’t enough cholesterol in your diet.  Now that we are in the Electronic Age, there is plenty of cholesterol, and your body doesn’t need to produce so much.  But, you can’t switch the gene off and it hasn’t had enough time to mutate yet to adjust to the new normal.  Diet and other external options are the only way to deal with it short of pharmaceuticals.

It’s really hard to tease out trends.  As our access to information has gotten easier, more information is out there which causes conflicts and differences of opinion.  I have seen people disagree over the same exact hard data.

It makes investing tough, and it makes setting public policy even tougher.

That’s why I like Ryan’s company.  It goes to an original source and offers a customized solution with probabilistic outcomes for an individual that you can choose to take action on.