China's Growing Appetite for Meat Alternatives
‘Meat alternative’ has become a global buzzword since Beyond Meat conducted its Nasdaq IPO. Since then, many meat alternative startups began looking into the Chinese market. The rise of the numerous Chinese startups, such as OmniPork and Zhenmeat, hinges on the belief that China will be a potential consumption market for meat alternatives.
Meat alternatives have been discussed a lot by the public media in the past year. The global frontrunners are US-based companies making beef-like burgers with plant-based ingredients, like Beyond Meat and Impossible Foods. Since Beyond Meat’s IPO, China has witnessed nearly 100 plant-based brands emerge in cities like Beijing, Shanghai, and Shenzhen, according to Beijingbased China Plant Based Foods Alliance (CPBFA).
Meat Alternatives: There Is a Market
These meat alternative startups are mainly targeting Millennials, as they are the ones driving the ‘conscious-eating’ and ‘plant-based’ agendas in China. This is because Millennials in China are more health-conscious, open to new things, and likely to follow online celebrities’ movements to eat more plants. According to some startups, like Zhenmeat, more than 90% of their consumers are Millennials.
Some of the high-income, traditional vegetarian population should also be considered a potential target. China’s tradition in producing and consuming vegetarian meat is linked with its history and practice of Buddhism. Traditional meat alternatives consisting mainly of fresh, packaged soy products with a short shelf-life, such as tofu (soy-based protein), ‘roast duck’ or ‘chicken’ made from tofu, or mashed potato-and-carrot ‘crabmeat,’ have long been available to consumers. According to Euromonitor, retail sales of those traditional meat alternatives reached USD 10bn in 2019. However, culinary differences and consumer preferences made products like Impossible Burgers nearly nonexistent in the past. But this group of consumers, in particular higher-income ones, could potentially be shifted to newer meat alternatives. In order to expand in this market, meat alternative players should know how to play, and the initial success of meat alternative startups in China provides some ideas on how.
How to Play
Many meat alternative startups have opted to partner with players in the foodservice industry to gain a solid foothold in the market. In terms of a product delivery format, those startups worked together with their catering partners to incorporate plant-based meat alternatives into their dishes, mostly in Chinese cuisine. The following are a few examples:
-Zhenmeat commissioned Yantai Shuangta Food, which produces pea starch and pea protein, to produce a plant-based filling for Zhen Lao Da Fang, a bakery chain, to be used in its mooncake fillings. Within three minutes, the company managed to sell 3,000 boxes of mooncakes online before the Mid-Autumn Festival. Following that success, Zhenmeat began actively approaching restaurant chains to jointly develop an alternative meat suitable for Chinese cuisine dishes, such as dumplings and baozi.
- Starfield in Shenzhen supplied plant-based burgers to bakery & tea chain Nayuki in its flagship store Nayuki World, which much resembles the Starbucks Reserve Roastery. In the trial launch, 150 plant-based burgers (USD 6.90 each, which is double a regular KFC hamburger) sold out in one hour.
-OmniPork of Right Treat, a Hong Kong-based startup, also actively partners with the foodservice industry. Over 180 foodservice and hospitality outlets began serving dishes made with OmniPork minced pork substitutes. Fast casual chain Wagas, for instance, rolled out ‘Flexitarian Future’ food, targeting Millennials who are seeking an aspirational lifestyle associated with health and sustainability.
In conclusion, meat alternative players could find demand in China as long as they can find the right audience (e.g. Millennials) and adapt to the local preferences (e.g. local dishes like meatballs and dumplings). With respect to catering partnerships, the coronavirus outbreak has brought short-term difficulties for catering businesses. When the virus outbreak is controlled, meat alternative players could continue to partner with catering companies that can provide a better consumer experience (e.g. Nayuki and Starfield). Meat alternative players should also take this opportunity to position their product as convenient and nutritious food, as consumers’ awareness of safety and nutrition will be further enhanced due to the outbreak.
Where to go from here
Michelle HuangAnalyst – Consumer Foods Read more