24.5.30 Is alternative meat the recipe for a healthier planet?

[김상태]

My wife is the last person in the world who would consider me a foodie type of person. She is always puzzled at why, sometimes, I couldn't even tell the difference between beef and pork when shopping or eating. So a few years ago, when I told her that I found my calling in food, as an impact investor, she was shocked, and thought I had a midlife crisis.

나의 아내는 나를 식도락을 즐기는 타입의 사람이 아니라고 생각하는 사람이다.그녀는 가끔 쇼핑하거나 외식을 할때 내가 소고기와 돼지고기도 구분할줄 못하는데 대해서 의아해 한다. 그래서 몇년전에 내가 영향투자가로서 음식에 소명을 발견했다고 말했을때 아내는 충격을 받았었고 내가 중년의 위기를 맞았다고 생각했었다  

But the impact logic behind my midlife crisis, or midlife epiphany, is simple. Given its size and reach, there's no way the world can achieve its climate goals without engaging China in a significant way. This is why I've spent much of my career focused on supporting environmental entrepreneurs in China, mainly in the industrial space, things like energy or recycling. But I've always wondered about how to reach the vast number of Chinese consumers. I found my answer in alternative proteins, or what we prefer to call new proteins nowadays in China. New proteins can be plant-based, microbial, or cell-based alternatives to resource-intensive, environmentally challenging animal proteins.

그러나 나의 중년의 위기 또는 중년의 깨달음에 대한 영향논리는 간단하다. 중국의 크기와 영향력을 고려하면 중국이 중요한 방식으로 참여함이 없이는 세계가 기후목표를 달성할수 있는길은 없다.이것이 내가 경력의 대부분을 중국에서 주로 에너지와 재활용같은 산업분야에서 환경기업가들을 지원하는데 집중해온 이유이다.

Let's look at some numbers quickly. China consumes 26 percent of the world's meat and 45 percent of the world's seafood. It's also worth mentioning that China accounts for 43 percent of the world's pork consumption, in the meat category. This number is massive. But if you look per person, meat consumption in China is still low, about half, compared to the US. For milk, consumption per person is less than half, in comparison. And driven by rising incomes and demand, these figures can only go up.

Meantime, global investments in innovative foods, with new proteins as the majority, were over 10 billion dollars, from 2020 to 2022. But China had only 3.5 percent of the total, at 362 million dollars. I realized that investing in new proteins should be China's answer. Chinese consumers can be a part of the country's environmental solution, and by extension, part of the global solution to tackle climate change. Without a doubt, it is a huge business opportunity in the long run as well.

But how exactly do we get people in China to embrace new proteins, as has happened in other parts of the world? Growing up in China, I always see food as an integral part of my culture. On all occasions, big or small, there's some banquet. Like when babies are born, loved ones pass away, friends getting together to bid farewell to one another. And we always need the so-called hard dishes, ying cai, as a core part of these occasions, meaning dishes with abundance and varieties of meat.

Chinese people don't just enjoy eating. Eating defines who we are and where we stand in society. As the Chinese saying goes, wu rou bu huan, meaning that there's no pleasure in eating without meat. Meanwhile, China has a long history with plant-based foods, which sounds positive for new proteins, but is actually a challenge. Old-generation mock-meat products especially have had a negative perception with mainstream consumers. They are seen as cheap, distasteful, unhealthy alternatives, and more intended to serve religiously vegan or vegetarian consumers. Environmental and animal-welfare advocacy groups have shifted consumer mindsets in the West, and eating plant-based meat is considered morally positive.

중국사람들은 단지 먹는것을 즐기지는 않는다. 중국속담에 우 로우 부 후안( 無 肉 不 悅  )이라는 말이 있는데 고기가 없다면 즐거운이 없다는 뜻이다. 한편 중국은 식물성 음식을 기반으로 한 오랜 역사를 가지고 있는데 새로운 단백질에 대해 금정적으로 들리지만 실제로는 하나의 도전이다. 특히 오래된 세대의 모조-육류 제품은 주류 소비자들에게 부정적인 인식을 가지게 되었다. 이런 제품은 값싸고 맛없고 건강에 좋지않는 대용품이라고 보여지고 종교적 채식주의자들을 위한 식품이라는 인상이 강하다. 서양에서는 환경 및 동물복지 옹호단체들이 소비자들의 사고방식을 변화시켰고 식물성 고기를 먹는것은 도덕적이고 긍정적이라고 생각되었다.

But in China, mainstream consumers aren't easily swayed by the moral argument for now. Chinese consumers are also highly demanding regarding taste, price and convenience. China is incredibly diverse in terms of styles of cooking and food applications. Basically, each province or region has a style of cooking. There's Beijing cuisine, Shanghai cuisine, Hunan cuisine, Szechuan cuisine and Cantonese cuisine, to name a few. And unlike Chinese restaurants in the US, these regional cuisines are not just different in the name, they do taste different.

To be successful and to have an impact, entrepreneurs can't just come out with a product that swaps out neatly for meat product. Alternative products will need to be tasty, affordable and regionally appropriate. This calls for investments in innovation, research and development. Moreover, we need new distribution channels, beyond specialty stores and vegetarian restaurants, and they must be widespread, nationwide, especially in China, where online selling plays an increasingly dominant role. And with the young generation mainstream consumers, it certainly helps to engage high-end chefs to put new proteins on their menus. And these new products need personality: brands that seem hip and compelling to younger consumers. New proteins must also enter the consumer consciousness on a wholesale level, meaning the entire industry needs good marketing campaigns. Entrepreneurs need to support one another and all relevant stakeholders to gain momentum. All of this requires investment and patience, of course.

The good news is that we're starting to see some progress. For example, look at the alternative dairy company, Oatly. The Oatly Tea Master, an oat-based drink developed in China, replacing cow's milk for milk tea, was introduced to the Chinese market in March 2022. By the end of 2022, the product had entered over 50,000 tea stores around China, with 20 million units sold. Oatly's initial success in China has resulted from its localized product and marketing strategy, investment in local production and distribution-channel expansion in collaboration with local partners. Meanwhile, mainstream Chinese consumers have been drinking all flavors of plant-based milk because of the past lack of cow milk products. I believe plant-based drinks are low-hanging fruit for introducing new proteins and having impact in China more quickly and in a more capital-efficient way.

Dao Foods, the investment firm I cofounded, has invested in about 20 new protein companies in China and for China. Products from Starfield, Xing Qi Ling, such as their plant-based tuna, beef and chicken, are showing up at restaurant chains and store shelves across China. Its clients include Sam's Club, KFC, FamilyMart and China's equivalent of Starbucks, Luckin Coffee, to name a few. Plant Now!, Zhi Wu Jia Dao, a plant-based milk tea venture, has recently entered more than 500 local convenience stores in Qingdao, a new tier-one city on China's east coast, and is ready to enter another 1,000 stores in China's Anhui province with their coconut milk tea product. These young generation entrepreneurs are trying to develop products that appeal to mainstream consumers in every way. Equally important, they are helping overcome the negative perception of plant-based products with a new look and feel and working with the right distribution partners.

Aside from entrepreneurial efforts, the new protein sector in China is also gaining momentum on a few other fronts. Over the past few years, we've hosted eight boot camps across China, bringing together and inspiring hundreds of entrepreneurs who spend time learning from their peers and figuring out how to better their technology, improve marketing, expand distribution and raise more money. Chinese President Xi Jinping made some food-related remarks last year, encouraging the seeking of new proteins from plants and microbes. Local government is getting involved as well. One municipal government in China's Yangtze Delta region agreed to jointly develop a new protein entrepreneurship program with us, offering office space, potential funding and more.

I would love to see mainstream Chinese consumers massively adopt new proteins, making them a part of their daily diet. I don't expect consumers to give up on animal products entirely, but having more protein diversification and choices will allow them to weigh factors like the environment and climate impact, to make more balanced and informed food decisions.

나는 중국의 주류소비자들이 새로운 단백질을 대대적으로 채택하여 매일의 음식의 일부로 사용하는것을 보고싶다. 나는 소비자들이 동물성제품을 완전히 포기하리라고는 기대하지 않지만 단백질을 다양화하여 환경과 기후영향과같은 요소를 중요시하므로서 보다 균형잡히고 정보에 입각한 식품결정을 선택하게되도록  될것으로 본다  

Given China's rising demand for quality proteins and the climate ramifications, climate-friendly investors worldwide should be all over new proteins in China. But they are not. Many international investors continue to shy away from China. Maybe geopolitics is the problem. Perhaps they aren't sure if they will be able to get their money out of China if they need to. Or it could be the flawed assumption that China's problems are so unique that it requires solutions led by Chinese people alone. But whether you're an investor, and entrepreneur or a consumer, if you want to be a hero and game-changer in this space, show me the money!

Even if it's just one meal at a time, one product at a time or one investment at a time. China is indispensable in addressing global climate changes, and we should work collectively to make China part of the global solution.

한번에 한끼, 한번에 한제품 또는 한번에 한 투자만이라도 말이다

Let's all strive beyond, do the impossible, always look at the upside and keep exploring the way, AKA the "dao," to get there. For the one and only planet we share and call home, we must do it, we can do it, and we will.

Thanks, everybody.