How to invest in pulses

While reading this past week’s Businessweek, I stumbled across a rather peculiar article which cited peas as the potential next food item to upend the food industry.

Yes, peas. Keep reading, it’s interesting, I promise.

Peas, a member of the pulses food group, which also includes beans and lentils, are apparently an excellent way for companies to sneak protein into their products because they don’t include allergens or GMOs. Another plus for pulses is they don’t drastically alter the taste of the product. As noted in the article, “They have more protein and fiber than wheat or rice, and provide B vitamins, iron, and zinc. They can help control blood pressure.” With such a revolutionary superfood gaining traction, I, of course, saw an investment opportunity and hence searched for ways to get in on the pea craze. Not surprisingly, I didn’t find a whole lot of information on the subject because, well, they’re peas. So I’ve put together a short list for your reference.

As a disclaimer, I don’t necessarily recommend any of these strategies.

1) Alliance Grain Traders Inc. (TSE:AGT)

Alliance Grain Traders is in the business of sourcing and processing specialty crops such as peas, lentils, chickpeas and beans. According to their 2013 Annual Report they have a direct relationship with growers in over 25 countries and a customer base in over 100 countries. In 2013, pulses and specialty crops accounted for 68% of their total sales. Sales in 2013 increased 33% from $855 million CAD to 1.14 billion CAD. They own 31 processing facilities including 14 in Canada and nine in Turkey. In the past year, their stock has risen about 45% and they have a dividend payout of 3.26%. According to Google Finance, they employ 900 people.

Alliance Grain Traders 5 year stock history - google finance

Alliance Grain Traders 5 year stock history – Google finance

2) Legumex Walker Inc. (TSE:LWP)

Legumex Walker is a processor and merchandiser of pulses operating in much of the same areas as Alliance Grain Traders. The company sources product from a network of over 18,000 growers primarily located in Canada. Their 2013 annual report cites an established customer base in over 80 countries and sales of approximately 412,000 tonnes of pulses and specialty crops. 62% of this sales volume came from beans (23%), lentils (23%), and peas (16%). The majority of sales were to the Americas (66%) and Europe (14%). Legumex has a much smaller market cap than Alliance Grain Traders and a much smaller number of outstanding shares. The stock has risen 25% in the past year but does not offer a dividend payout. According to Google Finance, they employ 175 people.

Legumex Walker 5 year stock history

Legumex Walker 5 year stock history – Google finance

 

3) Futures, Mutual Funds, or ETFs

Throughout my research, I found various grain-oriented products such as mutual funds, futures (namely for soybeans and wheat), and ETFs (JJG and GRU). Nothing specifically mentioned pulses or peas though. There may be products out there but I was unable to place my finger on any specific investment products.

For more information about global trends in pulse exports, imports, production and processing I would recommend using the Food and Agriculture Organization of the United Nations (FAO) or reading more of the annual reports of the companies I’ve listed here.

My final piece of information…eat your peas! You could be making someone very rich.

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