Plant protein startups vie to tap China’s hungry market

HONG KONG: Start- ups specialising in alternative protein, from eggless eggs to pea-stuffed burgers and cell-grown fish products, are piling into the Chinese territory of Hong Kong to tap the mainland’s booming multi-billion dollar food market.

At a time when traditional meat farmers have seen profits hurt by the US-China trade war and the spread of swine fever, companies such as Impossible Foods, JUST and Beyond Meat are luring affluent Asian consumers with products they say are more sustainable and environmentally friendly than conventional meat.

The global meat substitutes market was estimated at US$4.6 billion last year and is predicted to reach US$6.4 billion by 2023, according to research firm Markets and Markets. Asia is the fastest growing region.

Backed by some of the world’s top billionaires including Hong Kong businessman Li Ka-shing, philanthropist Bill Gates and actor Leonardo DiCaprio, plant protein firms are expanding into China for the first time this year.

San Francisco- based JUST, valued at US$1 billion and which counts venture capitalist Peter Thiel as one of its backers, is planning to launch its mung bean faux egg product in six Chinese cities starting next month.

“China is the most important market to JUST globally,” said Cyrus Pan, JUST’s China general manager.

JUST has inked deals with Alibaba’s Tmall and JD. com to distribute its egg product starting in Shanghai, Beijing, Tianjin, Guangzhou, Chengdu and Shenzhen, before expanding to other cities.

The company says the use of mung bean as its key ingredient is important for food security and appeals to the Chinese market given its tradition as a dietary staple.

China has a history of food safety scandals from melaminetainted eggs, smuggled frozen meat years beyond its expiry date and recycled “gutter oil” to crops tainted with heavy metals.

Nick Cooney, managing partner of Lever VC, a US-Asian venture capital fund focused on alternative protein startups, said firms like his are eyeing joint ventures, exports and product technology licensing opportunities in China.

“Chinese consumers seem to be more open to novel foods than those in nearly any other country,” he said.

Beyond Meat, which makes burgers and sausages from pea protein, has seen sales in Hong Kong increase 300 per cent last year, said David Yeung, Beyond Meat’s distributor in the special administrative region.

Backed by Tyson, the world’s largest meat processor, Beyond Meat filed for an initial public offering on the Nasdaq last November and plans to start distributing in the mainland in the second half of this year.

Rival Impossible Foods, which makes burgers out of soy, has said plant-based meat will eliminate the need for animals in the food chain and make the global food system sustainable.

The group has received around US$450 million in funding since 2011 with investments from Lee Ka-shing’s Horizons Ventures and Google Ventures. — Reuters