Plant-based protein in China
China consumes 28 percent of the world's meat, twice as much as the U.S. The U.S. already has advanced available products such as Beyond Sausage and the Impossible Burger. In China, a variety of mock meat products have long been available because of the country's Buddhist roots. Buddhists eat a partially or fully vegetarian diet. However, this industry has not yet begun producing the so-called 2.0 plant-based meats; products that are attractive not only to vegetarians but also to meat eaters.
In episode 4 of our podcast Innovation Matters, we will talk with Doris Lee of GFIC, the independent partner organisation of the Good Food Institute Asia-Pacific (GFI APAC) that is focused on accelerating the alternative protein revolution in mainland China. We will talk about Chinese consumers and their habits, the most prominent Chinese R&D players in the alternative protein industry and future developments.
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[00:00:00.385] - Host
Welcome to another episode of Innovation Matters, a podcast organised by the Netherlands Innovation Network. In this episode, we will talk about plant based proteins. My name is Marita Mitrovic and this episode is broadcasted from Shanghai, China.
[00:00:33.085] - Host
China consumes 28 percent of the world's meat, twice as much as the U.S., the U.S. already has advanced available products such as Beyond Sausage and the Impossible Burger. In China, a variety of mock meat products have long been available because of the country's Buddhist roots. Buddhists eat a partly or fully vegetarian diet. However, this industry has not yet begun producing the so-called 2.0 plant-based meats; products that are attractive not only to vegetarians but also to meat eaters. I will talk with Doris Lee of the GFIC, the independent partner organisation of the Good Food Institute Asia-Pacific (GFI APAC, that is focused on accelerating the alternative protein revolution in mainland China. We will talk Chinese consumers and their habits, the main Chinese suppliers in the alternative protein industry and future developments. Welcome, Doris Lee, and thank you for your time. Would you be so kind to start with a brief introduction about yourself?
[00:01:23.515] - Doris Lee
Sure. Thank you for your invitation. So I am Doris Lee. I'm the general manager of GFI Consultancy. We are a local company in China that focuses on promoting sustainable and alternative protein sources locally in China. So I have a personal background in promoting sustainable foods, including plant-based meats over eight years in Hong Kong and Berlin. And now I'm focusing on promoting sustainable source of protein in mainland China at my current company. So what exactly do we do? So we are the strategic partner of international Alternative protein think tank the Good Food Institute, and our work includes supporting scientists, startups, corporates and other stakeholders in the Alternative protein industry covering plant-based, cultivated and fermentation. We create greater resources for the industry and we distribute content, including technical papers industry reporters and other resources for the interested entrepreneurs and young researchers that want to go into the field.
[00:02:33.095] - Host
So you are promoting sustainable foods in China, and for this you cooperate with startups and corporates. So what does your support exactly consist of?
[00:02:46.115] - Doris Lee
Sure. Let me explain the rationale behind the work we're doing. So I just mentioned that we support scientist, startups, corporates in the Alternative protein industry. So by saying that what we mean is that the Alternative protein industry is still very young in China. So we think that the first thing we actually need to do is to connect the dots and to build up an ecosystem, so that each stakeholder can connect to each other and then kind of be up the momentum of of like accelerating the whole development of the industry. So we serve as a platform by simply connecting to all the stakeholders we just mentioned, and to raise like the first thing is to raise awareness of the importance and the potential in Alternative proteins. And the second thing we do is to serve as a resource center. So what we do is that we have our own resources as well as we localize international resources. For example, we just mentioned our strategic partner that Good Food Institute, they are well known globally for for a really high quality industry reports and scientific resources. And we hope to introduce and localize these resources for in Chinese for Chinese players to make use of. So this is one of the main work that we have been doing since the last year.
[00:04:19.865] - Host
So you offer a platform that connects the different parties, right? OK, so could you tell us what the current status is of the plant based protein market in China and how do you expect this to develop? China once set a goal regarding grain self-sufficiency, which they have reached as well. And they recently set a similar goal on meat and poultry, some kind of protein security goal. Do you think that this new goal will also offer some opportunities to the alternative meat industry?
[00:04:53.695] - Doris Lee
Sure. So as a lot of audience might have know about the for example, the market internationally, for example, in the US, but as in China, actually, when we talk about Alternative protein, we are still talking about plant based protein, for example, in the past year, especially after March, where when the coronavirus situation is more or less stabilized in China, there has been a huge launch of like plant-based meat products into the market. So all of a sudden, these products has been has transformed from like a concept that you can only hear from the news into something that you can actually buy and try in the chain restaurants. So we have what we have seen is a wave of what all these products into the market, including plant-based meat and dairy alternatives. And the reception has so far been quite well. And a lot of a lot of consumers are quite happy to try these alternatives, especially now that awareness on food safety has and also on health has increased.And we also expect to see more of these products coming into the market from not just local players, including startups, and also bigger players like Cargill and Nestlé and also more international players coming into the China market.
[00:06:29.245] - Host
So you said things really accelerated over the last year due to Corona. People are more aware of food safety but also have more health concerns. I was wondering to the Chinese consumer, what is the main reason to choose Alternative protein sources? Is it related to health, safety or are there also concerns for the environment, animal welfare, etc.?
[00:06:54.715] - Doris Lee
There has been around two to three consumer survey conducted on the perception of plant-based meat alternatives, I think since March, and from the results we have seen, consumers that are most receptive to or willing to try these alternative are more educated audience from from first tier cities. And they are mostly driven by health reason or by the, for example, know low fat or fitness reason that they they can benefit from purchasing consuming these plant based alternative to the conventional animal product equivalent. And also some of them do express, for example, consideration of the environmental impact. But this is relatively lower and maybe much lower then when we compare it to the Western market, so still is mostly driven by health and fitness reasons. Right.
[00:08:01.505] - Host
So there are different motives than in the West. Health is the main reason to choose for an alternative protein source. I was also wondering, given the the long ingredient lists on most products, is it necessarily healthier to eat a plant based alternative than just to eat meat?
[00:08:22.525] - Doris Lee
This is a very interesting question and we get asked a lot, especially by local consumers. I think when we talk about whether plant based meat substitute is necessarily healthier than is meat equivalent, we have it will be judged case by case. So far there hasn't been so many studies conducted on this area, but recently there is a new study by researchers at Stanford University School of Medicine that has find that swapping our animal meat for a plant based on the alternative can help lower some cardiovascular risk factors. A similar study hasn't been really conducted in China. So we think that more local study would help convince or send a positive message that plant based meat product could bring some certain health benefits, if it really does.
[00:09:18.475] - Host
Well, it makes sense that it depends on the kind of product, but it's good for foreign companies to know that health is the main reason for the Chinese consumer to choose alternative products. So what kind of products are on the market right now?
[00:09:31.945] - Doris Lee
The products we have been seeing in America so far, they are they're a good mix of our products that are adapted for local cuisine and also some more Western partners like burger patties. Most of them are made of like, for example, means meat means part meat or means. Meat that is make into a patty and also, for example, applying them into local foods like dumplings and like buns and and so on.
[00:10:04.235] - Host
Quick question. What is the most popular meat in China?
[00:10:07.985] - Doris Lee
Pork is always the most popular meat consumed in China. And I think that is the reason why a lot of companies start with start with creating plant based pork products. And also chicken is one of the popular products as well, mainly in the form of, for example, chicken nuggets that you can serve in quick service restaurants. For beef products is is relatively less common in China, mainly in the form of plant based beef patty used for burgers. That is actually a wide space for launching plant based seafood products though. We have recently released our report just talking about how many opportunities are there and the need for plant-based seafood products. There are only one or two products that have been ever launched into the market since last year, but hasn't really been popularized. Yet.
[00:11:18.045] - Host
OK, so pork in China is by far the most popular. So let's talk about science and R&D developments in China. In the Netherlands, we have Wageningen university, which is a leading university in the food science. But in China, what research institutes are the most important in this field?
[00:11:40.025] - Doris Lee
I have to mention Jiangnang University, which is based in Wuxi in China. They they have all they have new food center. Or you can say they have a big focus on Alternative protein, including plant-based meat and also fermentation. So they have they have been researching on all aspects of improving, improving functionalities of plant based meat and looking at how to use microbial fermentation in alternative proteins.
[00:12:19.385] - Host
Microbial fermentation is something I read quite often lately. How does it work exactly. And can you explain a little bit more how fermentation can increase the quality of the product? Because I believe that is how it's used, right?
Sure, I'm not a scientist, but I try my best to explain what's so. As you said, fermentation is gaining a lot of attention lately, and the Good Food Institute is one of the leader to have been they have been advocating for more awareness in this area. So fermentation can be used as a as a technology to either produce product itself, for example, like can be Quorn. They have been using also fermentation to create products from from sources like algae instead of plant sources like soy or PED's or fermentation can be used as tiny to produce specialty ingredients.
[00:13:30.485] - Doris Lee
For example, if I think a lot of you might be aware of impossible Bergers, they do have the they do have the appearance of of like of the bloodiest of of meat because they have been using a special ingredient called him. So it is also being produced for precision fermentation. So we see that fermentation is a very powerful platform. They can they can upgrade the current plan, base meat products and can create new products by itself. So we have Zhongnanhai University focusing on fermentation and plant based in general, are there any other important companies or universities that are leading in this field in China?
[00:14:23.155] - Doris Lee
So when we talk about China, I think is a hard to skip the the the main players to have been the field for many years. They are the traditional Buddhist vegetarian moch-meat producers. But in the past year, they have been partnering with new plant based 2.0 brands to to reinvent the products, let's say. And then the results are quite good because they do have a lot of competitive advantage, for example, in the China of sales or in manufacturing facilities or capabilities. So this form of collaboration is quite interesting in our eyes. And when we talk about, for example, fermentation innovations, we were we are also recently in touch with companies that are using mycelium fermentation to produce to produce plant based foods for consumption. And then there are also companies thinking to use fermentation to produce special ingredients, something like the impossible burger's him product in China.
[00:15:42.565] - Host
That is an interesting fact you mentioned there. Because of China's long Buddhist history, moch meat was popular way before it got popular in the West. Anyway, in China, you see startups partnering with these already established companies. This is well, I think necessary as China is a huge market that requires some serious preparations in terms of logistics and distribution. Do you think that such a collaboration would be feasible for foreign startups as wellT
[00:16:16.435] - Doris Lee
the startup I have been mentioning is are all local startups. But I can imagine I can imagine they having interests to also work with foreign companies.
[00:16:28.585] - Host
So if you are a foreign startup focusing on upstream innovations, let's say you have one specific ingredient or technique to it, enhance flavor. How could they access the Chinese market?
[00:16:42.145] - Doris Lee
One of the more common common way for international brands to get into China right now is that the first work with distributor here that that knows the market quite well in the region, that helps them with messaging and promoting and getting the products to the right audience and can collect feedback for them to adapt their products, because a lot of products, they they they if they are popular in the West wouldn't mean that the same formulation would work locally, right? So the trusted distributors in China could be one of the ways for them to first test the water and and then they would some of the brands, they, the next step will be to, for example, setting up a local office here or or even building their own manufacturing plants here in China.
[00:17:46.615] - Host
I'm wondering if meat companies would also be interested in collaborating because some of them are interested in cultured meat, because that way they would have the full supply chain in-house. But do you think they would also be interested in plant based meat?
[00:18:03.715] - Doris Lee
Sure. I recently just participated in an event where Cargill is present. So Cargill is also Cargill has also been launching their own plant based brand in China called PlantEver and have been launching plant-based beef patties and also chicken nuggets in China and collaborating with KFC here. So and Nestlé also announced that they are they are building facilities in China that will also launch plant based meat products. So these big players has also been quite keen to enter the field.
[00:18:48.565] - Host
So maybe a bit off-topic as this episode is on plant-based protein, but what is the current status of cultured meat in China?
[00:18:56.905] - Doris Lee
So the cultivated meat industry in China is also very, very new and even more, even younger than the plant-based meat industry, as we would say. Last year around, one year ago, the Nanjing Agricultural University, they created China's first cultivated pork meat, so that was a milestone for the department here in China. And there has been a few companies that are also focused on making cultivated meat, including seafood products and also pork products, et cetera. So it isn't many compared to compared to the rest of the world. But this is certainly starting right now.
[00:19:48.495] - Host
I don't think there are many outside of China either. I think the most important factor to develop a cultured meat industry is regulation of the so-called novel foods. Making a product is one, but being able to get it to the market is another thing. Can you perhaps tell me a little bit about the regulation in China towards novel foods and ingredients?
[00:20:08.885] - Doris Lee
So regulation for very cultivated meat products do not exist yet in China as the same as many parts of the world, maybe apart from Singapore, which they recently already approved the first cells of cultivated meat products. So in China, we have seen we have seen statements saying that the government is looking into the study of the cultivated meat, but so far there has been any regulations yet.
[00:20:48.635] - Host
So it's similar to the situation in Europe and the US. Another issue that arises when talking to people in the Netherlands about food in China is the issue of food safety. In the past, there have been a few food scandals which showed that the food supply chain is not always transparent. Most of the ingredients that are needed for plant based meats come from China. So that is a concern. Can you say that food safety has become more of a priority for the Chinese government and perhaps also for the Chinese consumer?
[00:21:21.275] - Doris Lee
Firstly, consumers awareness on food safety has increased a lot, and that is there is no doubt about it. And we also seen that a government has has launched different policies that drive to improve food safety in all levels. And in the first thing we have also seen by talking to different universities is that the government has also been supporting and funded research, especially on food safety, which is quite new and just since the recent years. So we can I think we can see we can see it as that food safety has really been put onto the spotlight. Whenever we talk about food.
[00:22:11.525] - Host
It's good to know that the issue of food safety is getting more attention. If a foreign company or startup is listening and is interested in the Chinese market, could they contact you? And if so, how could you help them?
[00:22:26.465] - Doris Lee
International companies or players that are keen to know more about the local Chinese market but aren't quite sure yet, they approach us and will often ask us for information and to have an overview of the whole the whole landscape to form their own judgment. This is a role we have been playing.
[00:22:50.645] - Host
And if a company is looking for an investor, what would you suggest them to do or bear in mind?
[00:22:56.115] - Doris Lee
Um, so when we talk about investment at investment in China, we see we see more new faces every time we go to events. And we got approached by a new local investors that ask us for some information about about the investment opportunities in Alternative protein food. And but one thing that we think is quite important to highlight is, is whether the funders are willing to invest in companies that that would put a big focus on on R&D and innovation instead of promising to have a short a financial return terms, because we think this is crucial for companies to to be able to have this to have this flexibility or that can afford really making good quality products instead of rushing to the market.
[00:24:01.445] - Host
Right. Funding innovation is a long term commitment, and an investor should not be focused on short term revenues only. In order to wrap up this conversation. Is there anything you feel that needs to be added.
[00:24:17.465] - Doris Lee
So I know many companies see China as a massive consumer market, which is right. But then apart from being a massive consumer market and also actually China is a big manufacturing hub, for example, for for high protein isolate, which is a main ingredient for a lot of plant-based meat out there. Now, apart from these to China, do have is a comparative advantage when it comes to our R&D as well. For example, in biotech, including cultivating meat and fermentation, and is a fact that may be the local industry has started relatively later than, for example, the West in building up its industry. But then the the the local the foundational research here and also an ambition system when it comes to policies, would also accelerate China's role in also being one of the leading R&D player in the whole alternative protein food.
[00:25:39.935] - Host
I agree. China is more than just a big consumer market or the world’s factory, China has made considerable progress in realizing innovation-based growth. So their R&D spendings in this field, together with their long history of plant-based protein products, will make China a significant global player. Thank you Doris, thank you for you time and sharing your knowledge on the topic. This is it of now, but more episodes on this topic will follow.
[00:26:03.755] - Doris Lee
Cool. Thank you so much. Yeah, it's great.
[00:26:10.685] - Host
Thank you Doris Lee, general manager of the GFIC in China.
[00:26:11.015] - Doris Lee
Thank you Marita.
[00:26:12.365] - Host
Thank you at home for listening. If you want to stay up to date on developments in this field in China or between China and the Netherlands, then please go to our website, Netherland's Innovation dot nl and leave your contact information on the podcast page of this episode. Then you will receive a notification when the NL Innovation Network, China, organises any activities in this field. At this page, you can also leave a comment. If you would like to get in touch, you can send e-mail to China at Netherlands Innovation dot nl. We will continue to talk about this topic in future episodes and hope you will be tuning in again. Thanks for listening.