Lisa Kramer

Consumers are increasingly following the advice of the new Canada Food Guide, which highlights the nutritional benefits of protein sources like nuts, beans, legumes, pulses and tofu in place of meat, eggs, fish and dairy products. And these eating habits are expected to stick, with a recent report anticipating that up to 60 per cent of “meat” may come from non-animal sources by the year 2040.

Consistent with these shifts in consumer preferences, plant-based meat company Beyond Meat recently saw its stock price surge almost 40 per cent, after its first performance report as a publicly traded company revealed far better-than-expected sales.

This is the same company that also enjoyed one of the hottest initial public offerings of the year, rising more than 150 per cent on its first day of trading earlier this year. Overall, the stock’s price is up about 400 per cent since its debut.

Restaurants, grocers offer plant-based foods

Adapting to shifting consumer preferences, several Canadian restaurant chains have introduced plant-based items to their traditionally meat-laden menus. When A&W Canada launched the Beyond Meat Burger last fall, restaurants across the country sold out within days and took months to restock sufficient supplies to ensure a smooth relaunch.

Tim Hortons now sells vegan breakfast sausages, Quesada introduced tacos made with veggie meat and Earl’s has launched its own Beyond Burger as well as a new vegan menu.

Canadian grocery stores are now stocking Beyond Meat, and some are developing their own in-house options (photo by Shutterstock)

Canadian grocery stores are also catering to consumers’ predilection for plant-based meats. Last month, mainstream supermarkets across the country began carrying the Beyond Burger, with some opting to place the product not in the health food aisles but instead in the butcher section alongside steaks and ribs.

And some retailers have additionally developed their own in-house varieties of plant-based foods, including the President’s Choice selection of veggie burgers, chicken-less fingers and beef-free crumble. Furthermore, shoppers now face an embarrassment of riches in the dairy section, with anyone seeking to avoid cow’s milk enjoying a choice of beverages made from soy, almond, coconut and oat.

These developments are indicative of a sea change in the market for vegan foods, with demand coming not just from vegetarians. Meat eaters, too, are drawn by the lower health risks associated with non-animal sourced proteins, a desire to reduce the environmental impact of their food choices and concerns about animal welfare.

A backlash

But some industry groups are attempting to push back against the plant-based food movement. In January, the Canadian Food Inspection Agency received a complaint about non-dairy products “being labelled as ‘cheese’ when they are allegedly not.”

A cheese by any other name would taste as cheesy? Tofu feta is on the offer in this photo (photo by Shutterstock)

Likewise, the Quebec Cattle Producers Federation recently expressed concern that calling veggie burgers “plant-based meat” is misleading to consumers, noting that the regulatory definition of meat is “the carcass of a food animal, the blood of a food animal, or a product or by-product of its carcass.” Yum?

But studies support the view that consumers are not the least bit confused by the use of monikers such as “milk” or “meat” in reference to plant-based foods. This makes sense, given the products’ labels tend to feature prominent information about their origins. And so prudent producers and retailers are preparing for the future by catering to consumer preferences for these foods rather than fixating on the past.

An important lesson emerges from another industry that faced a major shift in consumer demand. When digital photography was emerging as a new technology, a then-leader of the photography sector, Kodak, faced a difficult choice.

The company could cannibalize its own camera film sales to become an early leader in the digital space, which would be painful but potentially lucrative. Or it could try to postpone the inevitable and cling to a fading technology. Kodak chose the latter path, and the competition ate their lunch.

Now tech companies like Panasonic, Sony and Samsung stand alongside Canon and Nikon to dominate the world of digital photography, leaving Kodak a mere shadow of its former self.

Forward-looking meat-producing companies must reframe their thinking to recognize that they are in the protein production business. With many consumers avoiding animal-sourced protein, the opportunity emerges to shift focus to developing and producing alternate types of food.

Adapting to the future

The federal government stands ready to facilitate such changes, recently introducing more than $150 million in funding for the Proteins Industry Canada “supercluster,” aiming to encourage farmers and entrepreneurs in the Prairies to use new technology to increase the value of Canadian crops such as canola, wheat and pulses.

Another reason such a shift makes sense is the fact that raising animals as food is expensive. To produce a pound of animal-based protein requires many more pounds of crops and litres of water than are needed to produce a pound of plant-based protein.

With a surge in demand for commodities like peas, which are a key ingredient in products like the Beyond Burger, savvy Canadian farmers and producers are pivoting to adapt. Industry giant Maple Leaf Foods, for one, recently announced an investment of US$310 million to expand their plant-based offerings.

With all of these changes, investors in companies that are in the business of producing plant-based food stand to be winners, as does anyone who aims to enjoy the taste and texture of meat without the downsides of conventional meat.

Lisa Kramer is a professor of finance at the University of Toronto.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

U of T expert on why regulations are needed after cryptocurrency CEO takes passwords to his grave

noreen.rasbach — Mon, 04 Mar 2019 05:00:00 +0000

U of T expert on why regulations are needed after cryptocurrency CEO takes passwords to his grave

noreen.rasbach Mon, 03/04/2019 - 00:00

Cutline

Canadian CEO Gerald Cotten died in December, taking to his grave the passwords to unlock his cryptocurrency clients’ millions (photo by Dmitry Moraine/Unsplash)

Lisa Kramer

Topic

Our Community

Cryptocurrency

Faculty of Arts & Science

Rotman School of Management

The Conversation

U of T Mississauga

A high-stakes legal drama featuring cryptocurrencies has been unfolding in a Canadian court recently.

The antics that led to the litigation almost defy credulity, and they highlight the need for new regulations to better suit a financial marketplace that includes virtual currencies.

News broke in early February that Canadian cryptocurrency exchange QuadrigaCX was seeking creditor protection, leaving in financial limbo about 115,000 people who had entrusted the firm to maintain their deposits of cash, Bitcoins and other digital tokens worth an estimated $250 million.

The company’s need for bankruptcy protection arose when its founder and chief operator, Gerald Cotten, died suddenly in December while vacationing in India. Normally, if a financial institution’s executive officer meets an untimely demise, he or she doesn’t bring to the afterworld the only keys to the vault. And thus clients maintain continued access their deposited funds all the while.

In the case of Quadriga, unfortunately, Cotten was the only living soul who knew the password to an encrypted offline repository, known as cold storage, where the firm had enshrined the vast majority of clients’ cryptocurrency deposits. Without the password, no one can access those holdings.

Murky or absent regulations

While the Nova Scotia Supreme Court wades its way through some very novel and complex issues, the question that comes to my mind is: How has one bad decision about password custodianship caused more than 100,000 people to lose access to their deposits?

The answer lies in the murky and mostly lacking regulations that govern the cryptocurrency world. Nothing stops entrepreneurs like Cotten from running companies like Quadriga with no independent oversight.

Had he ever raised equity capital from investors in return for tokens or coins, that process would have been governed by Canadian securities regulations. But because Quadriga is an exchange – maintaining deposits and facilitating conversions between regular cash and cryptocurrencies, but not issuing cryptocurrencies in exchange for ownership shares – it operates in a regulatory vacuum.

Stakeholders show up at Nova Scotia Supreme Court as Canada’s largest cryptocurrency exchange seeks creditor protection in the wake of the sudden death of its founder and chief executive in December (photo by Andrew Vaughan/The Canadian Press)

In Canada, the Office of Superintendent of Financial Institutions (OFSI) oversees banks that take regular dollar deposits. One might argue that the OFSI umbrella ought to be adapted to include oversight of virtual exchanges like Quadriga, even though such institutions are not technically banks and their deposits are non-traditional in nature.

That oversight would impose accounting standards and reporting requirements that would help prevent the sorts of irresponsible missteps that put Quadriga depositors in such a precarious position.

A likely side benefit of regulatory supervision would be the eventual development of standardized safeguards against hackers and other cybercriminal activity that plagues the cryptocurrency world.

Lack of regulations attractive to some

A feature that draws many crypto enthusiasts to the virtual currency sector is the very fact that it lacks government oversight, and those individuals will bristle at any hint of new regulations.

Members of the general public might also be leery of new laws lest they grant an undeserved sheen of legitimacy to cryptocurrencies, which are not suitable investments for anyone except the most risk-loving of speculators.

But in Canada, we regulate many industries that are risky or distasteful to some, including gambling, alcohol, tobacco and marijuana. The underlying calculus is that providing standards for certain illicit activities is preferable to driving those activities to the black market, where the risks would be amplified.

For instance, a benefit of buying my beloved guilty pleasure of choice, craft gins, from a regulated marketplace is that I can imbibe confident in the knowledge that my cocktails are free from wood alcohol. Three cheers for avoiding blindness!

We cannot protect Canadians from all possible risks, especially when it comes to financial markets. And to be clear, I am not suggesting that we indemnify cryptocurrency speculators against losses that may arise from taking calculated risks, such as the beating that some fortune-seekers have taken since Bitcoin valuations plummeted from stratospheric heights.

Rather, I propose that depositors ought not to be penalized for the indiscretions of the custodians to whom they entrust their financial holdings.

Lisa Kramer is a professor of finance at the Univeristy of Toronto.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

This story has been corrected. The earlier story said US$250 million instead of $250 million Canadian.

Here's what happens the day after the clocks change

noreen.rasbach — Mon, 05 Nov 2018 16:34:31 +0000

Here's what happens the day after the clocks change

noreen.rasbach Mon, 11/05/2018 - 11:34

Cutline

The twice-annual time changes affect people similar to the way jet lag does. It’s time to abolish Daylight Saving Time (photo by Sevgi001453d/Pixabay)

Topic

Rotman School of Management

The Conversation

U of T Mississauga

Workplace

Society has a love/hate relationship with daylight-saving time changes.

At this time of year, many of us delight in the extra hour of sleep that comes with turning the clocks back. However, when spring rolls around, we invariably curse the loss of sleep that accompanies setting the clocks forward.

The decadence of extra snooze time aside, disruptions in sleep can wreak havoc on our minds and bodies. Deviations from our normal sleep habits, known as sleep desynchronosis, can lead to the same sorts of symptoms that arise from jet lag, including reduced attention span, judgment errors and anxiety.

Worse, the evidence shows time changes are associated with an increase in the numbers of car accidents and heart attacks.

Sleepy stock markets

The time changes also have adverse consequences for financial markets. Research I conducted with Mark Kamstra of York University and Maurice Levi of the University of British Columbia found that stock markets tend to draw back significantly on the Monday after a time change, whether the clocks lose or gain an hour.

We studied stock market returns in several countries, some of which implemented time changes on different dates than others, and we found that after controlling for other factors that influence markets, there was a significant drop following the time change.

Of course, what happens on any given day is a combination of many factors, including fundamental news about various companies and the overall economy. And yet we found a statistically significant negative average stock return that was much greater in magnitude than the negative return that typically arises on Mondays. (Other days of the week tend to have positive returns.)

We calculated that, in the United States alone, the average one-day loss on stock markets due to a daylight-saving time change amounted to more than US$30 billion.

When the clocks spring forward or fall back, it causes problems for human health and the economy (photo by Shutterstock)

We surmise that these twice-a-year losses arose as a consequence of investors being more anxious after a sleep disruption and hence more reluctant to buy or to continue holding risky assets than they would be in absence of the shock to their routine.

This stock market example is part of a much larger phenomenon whereby the biological effects of sleep changes have negative implications across the wider economy.

Workplace accidents tend to be greater in both frequency and severity following daylight-saving time changes, which translates into lost wages, higher worker’s compensation costs, higher medical costs, more training costs for replacement workers and reduced productivity overall. On balance, the time changes are expensive for both business and government.

Year-round daylight-saving time

Of course it’s not necessary for a region to adopt standard time in the event that time changes were abolished.

The other obvious alternative is to remain on daylight-saving time year-round – meaning, essentially, that the clocks don’t change twice a year. That option that would arguably lead to relatively better outcomes in terms of financial markets, car accidents, heart attacks and workplace injuries.

Year-round daylight saving time has additional likely advantages. The state of Massachusetts evaluated the relevant academic literature and concluded that reduced street crime would result from remaining on daylight-saving time permanently, including a reduction in robberies due to more daylight in the evening hours and possibly a decrease in the incidence of rape.

When daylight-saving time changes were first being adopted in various jurisdictions more than a century ago, energy cost savings were touted as a major benefit. The details depend on the specific latitude and time zone, but it now appears that these benefits were vastly overstated.

Recent studies have found that adopting daylight-saving time year-round would lead to modest energy savings and perhaps reduced greenhouse gas emissions too.

The implications of year-round daylight-saving time wouldn’t all be sunny, however. An undesirable implication would be darkness during the morning period when children often head to school. For some locations, this may suggest a need to shift school start times later so there is daylight when students are on their morning trek to classes.

Ending daylight saving time changes will mean children will need to start school later. Businesses will therefore need to accommodate parents (photo by Shutterstock)

That would also require work hours to change for parents of younger, school-aged children. They’d have to start later in order to get their kids to school.

But this inconvenience is worth bearing, since child development experts maintain that later school start times are better for kids’ attendance and learning outcomes anyway.

Clocks may soon stop shifting

European citizens recently participated in public consultation about daylight-saving time changes, and the majority of respondents expressed a desire to adopt daylight-saving time year round.

Accordingly, the European Council has recommended that member countries stop adjusting the clocks twice a year and instead remain perpetually “sprung forward.” The matter is working its way through the legislative process.

If adopted by the European Parliament, adherence to this recommendation would be voluntary on the part of individual European nations. But for the first time in decades, the real possibility exists that some major world economies will stop shifting their clocks.

Overall, the time has arrived for us to stop losing sleep over the twice-yearly time changes and to stick with daylight-saving time all year long. May the shift to year-round daylight-saving time everywhere come swiftly, for the good of our health and the economy.

Lisa Kramer is a professor of finance in the department of management at the University of Toronto Mississauga and the Rotman School of Management.

This article is republished from The Conversation under a Creative Commons license. Read the original article.