Rapidly rising food prices have been blamed on causing unrest in Egypt and are spurring run-ups in stock prices for potash companies and genetically modified seed producer Monsanto Co. (NYSE:MON).
But there is another way that entrepreneurs and investors are capitalizing on the rising food price trend.
Organic Lives owner Preet Marwaha invested just under $1 million in December 2009 to launch a retail and wholesale company that produces raw vegan meals.
Prices for his meals are much higher than at fast-food restaurants, but he believes that people will start to gravitate toward vegetarianism when they start to realize that the planet cannot sustain current levels of meat production.
Marwaha came within a hair of breaking even in his first fiscal year, and he expects to be in the black soon thanks to increased wholesale sales.
About 70% of his first-year sales came from retailing meals at his Quebec Street and Second Avenue bistro. Menu items include a caesar salad with ground nuts instead of parmesan cheese and croutons that included seeds and nuts. His meals also contain no flour.
Marwaha believes that if everyone would eat non-dairy, vegetarian meals the world would be able to produce more food. Cattle farming, he said, is an unsustainable practice because of the amount of land required and the amount of feed necessary.
Marwaha wholesales products to stores such as:
- Whole Foods Market Inc. (Nasdaq:WFMI);
- Lifestyle Markets on Vancouver Island; and
- Community Natural Foods in Calgary.
“As we continue to grow, the majority of our sales will be on the wholesale side,” Marwaha told Business in Vancouver February 10.
Growth in demand for natural and organic groceries is clear from the stellar first-quarter earnings that Whole Foods reported February 9.
The Texas-based organic and natural food chain revealed a 79% spike in profit compared with the same quarter a year ago. The company also raised its full-year guidance and its stock jumped more than 11% on February 10.
Those results came while U.S. corn supplies hover at 15-year lows, soybean supplies are falling and wheat supplies are down 16% compared with a year ago.