U.S. Faux Meat Producers Look to China

Established players face challenges from Chinese startups.

December 05, 2019

ALEXANDRIA, Va.—America’s plant-based meat makers, such as Beyond Meat and Impossible Foods, see China as the next big market for their products, according to the the Wall Street Journal, but Chinese startups are providing them with a challenge.

China is an attractive market for alternative meat producers because purchasing power and meat consumption have grown rapidly in the world’s most populous country. In addition, Chinese officials have encouraged meat alternatives amid a deadly swine epidemic that has wiped half of nation’s pig population and pushed up prices of pork, beef and poultry.

California-based Impossible Foods introduced its plant-based meat burger in China last month, and Beyond Meat, also from California, plans to enter the country next year. But Chinese entrepreneurs aren’t waiting for American faux-meat products. The country, with a long tradition of vegetarian meals, has had its own meat alternatives for centuries, and several local companies are rushing their own meat substitutes to market, betting they can better cater to Chinese appetites.

During the traditional Mid-Autumn Festival holiday in September, Beijing-based startup Zhenmeat used e-commerce platforms to sell thousands of traditional mooncakes made with plant-based pork substitute. The company, which was founded in May, is currently refining its plant-based offering in hopes of getting it onto the menu of a Beijing vegan-friendly restaurant by early next year.

“We are short on money, we are short on [a research-and-development] team, and we are short on time, because we just entered this market this year. Our advantage is we know the consumer,” said Vince Lu, Zhenmeat’s founder.

Beyond Meat, Impossible Foods and other traditional food companies are betting the rise of meatless alternatives could permanently change the way people look at meat. The younger generation of Chinese consumers are increasingly health-conscious and less likely to equate lack of meat with economic hardships, as has been the case historically in China. Domestic producers can benefit from lower production costs, and they might be able to bypass some regulatory hurdles.

Green Monday, founded in 2012, launched OmniPork last year and recently introduced several alt-meat dishes at Wagas, a 75-café chain with locations in 10 cities across mainland China. Green Monday is also working on the mainland with Taco Bell to develop a fish-flavored eggplant taco with imitation ground pork.

Partnerships such as the one between Taco Bell and Green Monday are an attempt to tailor products to the Chinese consumer. In addition to the meatless burger unveiled at the trade fair in Shanghai in November, Impossible Foods also showcased plant-based stewed meatballs and traditional dumplings. Impossible Foods hopes to enter China once it receives regulatory approval of soy leghemoglobin, the substance that makes its burgers appear to bleed, but the company doesn’t know when it might be approved. Beyond Meat aims to have production running in China by the end of next year, though a spokeswoman couldn’t confirm exact timing.

To better understand the Chinese market, New Crop Capital, which invests in alternative-food startups, including Beyond Meat, has forged a partnership with Dao Foods International, the food-focused arm of the Dao Ventures Group, a social venture fund. “We are smart enough to know is that we have no idea how to get into China,” said Chris Kerr, New Crop Capital’s chief investment officer.

In August, Dao Foods launched a roaming boot camp to support plant-based enterprises, starting in Shanghai. The event drew about 50 entrepreneurs and 30 investors, according to Dao Ventures founder Tao Zhang, who said his initial plan was to help transplant Western products into China. After a yearlong feasibility study, he decided to focus more on homegrown startups.

“Chinese entrepreneurs tend to learn things very quickly, especially with the help of investment dollars. And this sector is getting a lot of attention from investors,” Zhang said.

For more insights into the Asian retail environment, mark your calendars to attend the NACS Convenience Summit Asia, taking place March 3–5, 2020, in Bangkok, Thailand. For coverage of the 2019 summit, see “China Focus” in the June issue of NACS Magazine.