The term “plant-based meat” became a buzz word in China with the entry of Beyond Meat and Impossible Foods to the market. Plant-based proteins are not a new thing in Asia, but with new technology behind the trend, China is taking a fresh interest in the food industry. Venture capital investors are also assessing potential in foodtech.
More than 80% of investment in the sector has been downstream from foodtech, such as e-commerce, delivery, and brands, said Dee Zheng, principal at Bits x Bites, during a discussion at TechNode’s Emerge 2020 conference. However, she said that the trend will shift upwards to upstream segments to secure the food itself.
E-commerce and food delivery addressed the problem of convenience, but doesn’t really change the food quality, Zheng said. Platforms have to go upstream to support farmland with technological improvements for environmental sustainability. Additionally, there will be a huge opportunity for alternative proteins because of Covid-19, which threatened the animal protein supply chain, according to Zheng.
A dynamic market
Rich cultures and vast territory has made China a country with diverse food choices. Therefore, the constant exchange of demographics has created a relatively dynamic market in China, said Samuel Li, manager of projects and operations at Analytical Flavor System. There have been some successful cases of a new food or flavor from overseas that were welcomed among the younger generation in China. However, whether all new foods and flavors brought to the Chinese market will be fully successful is debatable, Li said.
“We have been seeing a lot of products that are doing well in overseas markets, but they didn’t translate their success into the Chinese market. There is a gap of perception between the Chinese consumer and consumers from other markets. This gap of perception will eventually crystallize into a gap of preferences to what specific flavors or combinations of different flavors they will choose,” Li said during the discussion.
Plant-based protein maker Just Egg has conducted a lot of research and customized recipes to fit Chinese consumers’ eating habits, according to Gary Zhang, head of its regional marketing. Some 90% of shoppers who buy its products are flexitarians, who opt for plant-based products from time to time for sustainability and health reasons. He said the awareness of plant-based dining among the Chinese consumers is growing very quickly.
“We can see that more and more young groups and post-90s are embracing this kind of plant-based dining very actively,” he said.
Foodtech for the future
There’s a problem of waste in the food industry in terms of innovation, according to Zheng. Ninety percent of new products launched onto the market will not end up in the field. However, with the introduction of digitization and data generation, customers’ perception and preferences can be detected in advance.
“Traditionally, you announce a color or flavor of the year, but it’s more based on the market research on existing products,” Zheng said. “Now they can have the potential to do non-existing predictions based on very scattered information and try to have the conclusion, which is quite amazing.”
The technology in the food industry is evolving, according to Zhang, and the government should also catch up with the pace of the market in terms of drafting regulations related to emerging food products such as plant-based meat.
“I think this poses a very imminent and long-term challenge to the administrators,” he said. “Sometimes they even need to deregulate some things to remove the burden and let the industry move forward.”