Plant-based foods have arrived in China with such aplomb that even meat lovers are beginning to take note. While this niche industry is having a moment in the West, China’s increasingly wealthier population might be trickier to convert. Yet, the social changes brought upon COVID-19 could just be what it takes to convince the 1.4 billion people living in the world’s second-biggest economy to switch their conventional sausages to meatless ones.
Declining Pork Reserves
Demand for pork in China, traditionally, is remarkably high. Before COVID-19 swept the country, China had to tackle another epidemic which devastated the agriculture sector – African Swine Fever (ASF). In 2019, the incurable pig disease killed millions of hogs and the nation’s pig herd shrank by more than 40%. According to official data, domestic pork prices rose almost 110% while pushing up live hog costs elsewhere around the world. Although the industry has shown signs of recovery, new cases of ASF continue to make the headlines, creating an opportunity for alternative protein sources to gain momentum.
Changing Consumer Behaviour
As the recovery from COVID-19 takes shape, brands across categories need to adapt to the “new normal”. The trends that have accelerated from the pandemic are likely to evolve further, digitization being the main driver. Changes are also happening on a micro level, with food consumption for example. McKinsey’s recent survey found that 70% of respondents will continue to spend more time and money purchasing safe and eco-friendly products, while three-quarters want to eat more healthily after the crisis. Companies producing meat alternatives are well positioned to satisfy these consumer expectations.
Biting the Market
A few companies have recently entered China with considerable success. California-based startup Impossible Foods first tested the waters at CIIE in November last year, where they served soy-based burgers and dumplings to 50 000 visitors. Another brand with equal appetite, Beyond Meat, entered the Chinese market through Starbucks last month and saw its shares jump 49%. The coffee retailer’s GOOD GOOD campaign also features healthy options from Hong Kong-based OmniPork and Swedish Oatly, both of which are widely stocked in stores and restaurants. Giants such as KFC do not want to be left behind either. The fast-food chain recently introduced plant-based fried chicken which drew long lines during the limited-time launch.
Taste is King
Recognizing the local palates, domestic plant-based protein companies are giving plenty of competition to international players. Beijing-based Zhenmeat first gained popularity with mock meat-stuffed mooncakes but is now working to 3D print bones for their meat alternatives. Faux oyster sauce, veggie bacon and plant-based abalone producer Whole Perfect Food in Shenzhen is reportedly bringing in $44.6 million from sales each year, highlighting the importance of localizing your product offering.
To add to the above, China has announced new guidelines to reduce domestic meat consumption by 50% by 2030 – a statement that could alone accelerate the clean meat movement. The shifts have already begun, and investors seem equally happy to line up for the next big ‘veggie’ bite.