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Roots Sustainable Agricultural Technologies preparing launch for US hemp-based foods business


From gummies and lollipops to pet treats, there is no shortage of products available to meet the ever-increasing consumer demand for goods that contain Cannabidiol (CBD).

But it is actually hemp-based food products where the largest market demand is expected to be in the not-too-distant future —and that is exactly what Israel-based Roots Sustainable Agricultural Technologies (ASX:ROO) is betting on as it seeks to expand its operations into the United States.

Roots, the creator of a system that enables farmers to monitor and care for specialty protein-based crops, known as the Roots Zone Temperature Optimisation (RZTO) technology, is laying the groundwork for a foray into hemp-based meat replacement products in the U.S. The company has entered into a joint venture with Czech Republic-based Hempoint, a leading grower and producer of hemp-based food products, fiber and hemp seeds, that will allow it to launch a U.S. hemp-based foods business, with a particular focus on hemp-based alternative meats. The combined organization will also consult with other companies within the hemp industry to help develop business strategies and to allow them to use the RZTO technology to enhance the amount of cannabis plants they are able to grow.

Plant based protein demand skyrocketing

While CBD’s popularity has soared in recent years as consumers have sought it out for benefits purported to include everything from pain relief and the alleviation of side effects related to chemotherapy, to stress relief and heart health, adoption of hemp seed-based foods has been slower to take off due to texture and flavor related issues. Despite growing awareness of the high protein content of hemp seed and the fact that it is easily digested, hemp-based food manufacturers have struggled with the challenges of overcoming its pungent flavor and dark green hue. But with researchers having determined that shelling hemp seeds eliminates their strong green color and pungent flavor, food manufacturers are now able to create appealing plant-based food alternatives that are extremely attractive to health-conscious consumers. As a result, hemp-seed based protein is being included in countless products ranging from protein powders and shakes, to cookies, cold brew coffee and, of course, meat alternatives and demand is skyrocketing.

“While we saw a major boom in CBD, the hemp seed market has not been as bullish as it could be. But I believe there is a lot of opportunity as price comes down,” said Jordan Rubin, the founder and CEO of whole food nutritional product developer Ancient Nutrition and author of New York Times best-selling book The Maker’s Diet, adding that he believes investors should be bullish on hemp seed or hemp grain.

Plant-based protein is among the fastest growing ingredients in food and beverages, according to Innova Market Insights, with a +26% compound annual growth rate. Meanwhile, MarketsandMarkets predicts that the global plant-based protein market will reach $15.6 billion by 2026, up from $10.3 billion in 2020. And Roots has its sights set on the fact that the market is expected to continue rising, with predictions that it will exceed $240 billion over the next two decades. It also doesn’t hurt that market research company Mintel recently found that consumers will willingly spend as much as 31% more for products that contain clean ingredients that are sustainably sourced.

“When you look at existing meat substitutes, they’re not exactly loaded with the ingredients that health enthusiasts love. Yet, they’ve done tremendously well because there’s a desire for people to consume more of a plant-based diet that is cleaner and because they believe it is a better for the environment,” said Rubin. “If there is a meat substitute that is made primarily of hemp seed that is able to be made in a way that avoids the bitter taste, I think it could be great. Hemp hearts and hemp seeds have tremendous benefits that have yet to be tapped… and there’s an overall move towards environmental sustainability and regeneration.”

As Roots sets its sights on addressing global food security concerns, the company said it is working on finalizing multi-year plans with several U.S.-based partners as part of its new venture. The company’s stock price has ranged from a low of AU$0.015 to a high of AU$0.048 over the past year, closing most recently at AU$0.019.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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