China’s plant-based meat market is getting more crowded as domestic start-ups join international giants in a race to tap the growing middle class’ appetite for healthier food options.
One newcomer, Green Planet Foods aims to invest “billions of US dollars” – mostly to be funded by potential partners – in the next five years in the nascent sector in China, according to co-founder and CEO Klaus Petersen, a Beijing-based Danish premium food importer.
“China’s rising middle class is getting wealthier and has an immense appetite to try new things … there is a big shift toward [products that offer] health and wellness,” Petersen told the Post. “Our vision is to bring down the prices of plant-based food though innovation, scale and formulations.”
Green Planet’s other co-founders are Hong Kong-based private equity firm China Renaissance Capital Investment, headed by Mark Qiu Zilei, a former chief financial officer of state-backed offshore oil company CNOOC, and Singapore-based Ashok Vasudevan and his wife Meera, an American-Indian couple who built a multinational natural and organic food business.
The Singapore-headquartered company will initially be targeting young families in their 20s and 30s in big cities.
“We will be offering affordable food that can provide wellness instantly,” Vasudevan said. “And we will be going into different segments of the entire supply chain at the same time – from controlled environment agriculture, intermediate products and ready-to-eat products.
“Each project or product will get incubated or accelerated first at our design laboratory in Singapore [and] they can become independent once they are ready to be scaled up in China.”
China’s median disposable income per household climbed at a compound average annual rate of 6.9 per cent to 88,455 yuan (US$13,000) last year from 2015, according to Euromonitor International.
The nation’s meat substitutes retail market has grown at an average 7.7 per cent to US$10 billion last year over the same period, with the market research provider projecting a slower average growth of 3.7 per cent to US$11.9 billion in 2024 from last year.
Green Planet, which aims to launch Asian-developed alternatives to Western plant-based food products such as burgers, sausages and kebabs next year, is by no means the only firm taking localisation seriously.
Beijing-based Zhenmeat, founded by entrepreneur Vince Lu Zhongming, a University of Illinois materials science graduate, has been testing the market’s response to its “pork” tenderloin and “crayfish” at a hotpot restaurant chain in the city.
“We have been testing them for a month and surpassed our goal of matching customers’ orders of traditional meatballs. Our products achieved twice as many orders.”
His company recently raised several hundred thousand US dollars from New York-based Big Idea Ventures, giving a boost to its start-up capital of 5 million yuan.
China’s market potential has attracted other venture capital funds.
Hong Kong-based alternative protein venture capital fund Lever VC has invested in five alternative protein food start-ups – including one that is developing plant-based seafood – through its China Alternative Protein Fund launched early this year.
“We prioritise companies that bring innovative and delicious products and novel food technologies to China,” said Nina Ju, investment director of the Lever China Fund, which has received US$23 million of capital commitments in August, much of it from Asian family offices.
“The China market is huge and can accommodate many players,” said Astrid Prajogo, founder of Shanghai-based HaoFood, an investee of Lever that is developing plant-based ground chicken.