Is China the next frontier for the meatless industry?

By Matt Dallisson, 07/12/2019

China’s “free from meat” market, which includes plant-based products meant to replace meat, has grown 33.5% since 2014 to be worth $9.7 billion last year, according to . It predicts that the.

U.S. plant-based “meat” makers targeting China like Impossible Foods and Beyond Meat Inc will need to battle homegrown rivals which are developing local favorites such as dumplings and mooncakes to nab a share of the lucrative market.

China’s meat substitute industry has seen a surge in interest in recent months, with startups, traditional food businesses and investors betting trend-loving Chinese consumers will take to plant-based protein like their U.S. counterparts.

Ham producer Jinzi Ham saw its share price soar 50% in a week after it announced in October it would start selling meat made out of plant protein that it developed with Danisco (China) Investment, a unit of U.S. firm DuPont.

But unlike Impossible Foods or Beyond Meat, most Chinese companies are not making burgers, instead focusing on local dishes such as dumplings, mooncakes or meatballs, and opting for pork rather than beef flavors in recognition of local palates.

“American and European companies have rich experience in frying, roasting, and baking, we have a different dieting culture and cooking recipes,” said Zhou Qiyu, a marketing executive at Whole Perfect Food.

One-year-old Zhenmeat, whose name translates to “treasure meat”, for example, was touted by Chinese state media as the country’s answer to Beyond Meat after it used “meat” made out of pea-based protein in its mooncakes, a popular snack eaten during the country’s Mid-Autumn Festival.

Whole Perfect Food, which for the last 20 years has mainly catered to China’s mostly vegetarian Buddhists, recently rolled out a range of sausages made from soy and pea-based protein. The sausages come in 40 varieties, including spicy Sichuan and soy-seasoned beef.

Zhou said the firm was open to working with foreign companies. It had earlier this year conducted a trial partnership with Walmart which has since ended but has partnerships with Alibaba Group Holding’s Hema chain and Tencent-backed retailer Yonghui Superstores.

China’s “free from meat” market, which includes plant-based products meant to replace meat, has grown 33.5% since 2014 to be worth $9.7 billion last year, according to Euromonitor. It predicts that the industry will be worth $11.9 billion by 2023.

This month showcased the use of its plant-based meat in dishes such as “Impossible Lion’s Head Dumpling in Broth” at a high-profile Shanghai import fair. It says it is developing prototypes of many different products including pork but has no immediate plans to commercialize them.

Beyond Meat’s executive chairman Seth Goldman told Reuters it plans to customize its pea-based meat for the Chinese market to make dumplings and other products. The company is aiming to start production in Asia by the end next year before eventually expanding to China.

“It’s the same palate. There’s nothing about what we’re doing that prohibits us from making a product that would have appeal in the Chinese market,” he said.

“If you simply use pea protein, or soy protein, and then add a lot of additives to make them stick together and then sell to the market, there is no real innovation, the taste is really bad, from a consumer perspective, we don’t believe the demand will be able to meet that oversupply.”

“The texture of Yangzhou-style meatball is very dimpled, while hotpot meatballs are crispy,” he said. “Foreign plant-based food might not succeed in China because they don’t fit Chinese stomachs.”

China is currently grappling with surging prices for pork, its mainstay meat, after culling an estimated half its herd due to an epidemic of African swine fever. A bruising trade war with the United States has also raised prices of beef and other meat products.

Among them was 23-year-old Liu Dongyang, a vegetarian who traveled 160 km (100 miles) from her home in Guangzhou to try Impossible Foods’ meatless burger patty in Hong Kong.

This content was originally published here.