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There’s a huge opportunity to be made in China, the world’s most populous country, whose consumers are increasingly keen on healthier, safer and more sustainable alternative proteins. But for plant-based producers to succeed in the Chinese market and tap mainstream consumers, it will be critical to adapt their products to integrate with local tastes and traditional dishes, say experts in a new report.
The report, published by Good Food Institute’s China-based strategic partner GFI Consultancy (GFIC), examines the key “pathways to success” for plant-based businesses looking to establish a foothold in the Chinese market. China represents an enormous opportunity for brands, with the country accounting for more than 70% of the current US$163 million Asia-Pacific plant-based meat market.
A recent DuPont analysis highlighted China as one of the fastest-growing markets in the world for the plant-based industry, with vegan meat demand set to grow 200% over the next five years. In 2020, the Chinese agri-food tech industry bagged a record US$6 billion in investment, of which a significant share of US$127 million was pocketed by alternative protein firms.
Even the government is on board with the rise of plant-based meat, establishing the first voluntary standard for the industry in April this year.
Companies should identify the most promising examples of plant-based meat products that fit traditional Chinese dishes consumed by mainstream diners.Viola Chen, Innovation Specialist, GFIC
However, there remain key hurdles for plant-based brands to succeed, from the region’s “lingering historical consumer perceptions that plant-based meat is exclusively designed for religious vegetarians” to the “shortage of cost-effective local players in the supply chain,” writes Viola Chen, innovation specialist GFIC.
The primary challenge to mass adoption, according to the report, is developing plant-based products that can provide direct substitutes for meat-based ingredients in traditional Chinese ingredients.
“Companies should identify the most promising examples of plant-based meat products that fit traditional Chinese dishes consumed by mainstream diners,” explained Chen.
In the report, GFIC highlights several food categories that plant-based meat makers could provide substantial disruption to within Chinese cuisine, among them meat alternatives for hot pot, Chinese-style barbecue skewered meats, vegan analogues for meat-based snacks and ready-to-cook meals.
It is much more difficult to pick a single well-established food item or meal context in China that plant-based meat products could fit into, due to the country’s sophisticated and fragmented culinary landscape.Viola Chen, Innovation Specialist, GFIC
“Unlike how Impossible Foods was able to win over consumers with “bleeding” plant-based burgers in the U.S., it is much more difficult to pick a single well-established food item or meal context in China that plant-based meat products could fit into, due to the country’s sophisticated and fragmented culinary landscape.”
“A few local startup brands have rolled out plant-based hotpot meat and BBQ skewer products that mimic the sensory properties of those iconic dishes,” said Chen, suggesting that homegrown players have managed to leverage their better understanding of the Chinese market to suit the preferences of mainstream consumers.
Other considerations that plant-based companies should consider is their presence in China’s online market, with direct-to-consumer and third-party e-commerce channels continuing to thrive in the country. An AgFunder report on the food tech landscape in China revealed that in 2020, online grocery and delivery startups alone raised US$3.6 billion.
Given that consumers in China prioritise health and sensory qualities of plant-based products the most, GFIC experts say that plant-based brands should factor in ingredient sources, protein content and nutritional value in their product formulations and marketing to differentiate themselves with traditional mock meats.
Furthermore, GFIC believes that B2B collaborative partnerships are “critical for successful market entry and expansion”, particularly for international players, a point also highlighted by experts at Beijing and Singapore-based Asymmetrics Research in a report published earlier in February.
Analysts at Asymmetrics Research said that partnerships with foodservice companies and restaurants, such as Oatly, Beyond Meat and OmniPork’s successful collaboration with Starbucks China nationwide, would help plant-based brands attract new consumer awareness and foster a presence and familiarity with the mass market.
Lead image courtesy of Hero Protein.