Plant Based Meat in China: Local Brands Vying for a Share of this Fast Growing Market

Plant based meat has been a hot topic in China this past year. China consumes 28% of the world’s meat, more meat than any other country in the world, including half of all pork (though on a per capita basis the Chinese eat about half the meat that Americans do.) But as living standards rise, consumers are pursuing healthier lifestyles, with many cutting down on meat consumption. 

Based on Euromonitor’s statistics, China’s plant based meat market is expected to grow from around 10 billion USD in 2018 to 12 billion USD by 2023.

Because of this, both local and international brands are rushing to grab market share. In 2020 top international brands Beyond Meat and Impossible Foods entered the Chinese market. There are also many Chinese brands in the space including Zhiai Life (植爱生活), Starfield (星期零), Hey Meat, and Zhen Rou (珍肉), many of which are well-backed after several rounds of financing. 

Below we’ll look at some of the key challenges for this market and then use local brand Zhiai Life as a case study to show how brands are trying to overcome them. 

Challenges for Plant-Based Meat Market 

For brands who want to enter the potentially lucrative China market, they will face a few challenges: 

1. Even though China as a country consumes the most meat, as we mentioned above, per capita meat consumption is much lower than other countries. Grains are still the main food in Chinese traditional dietary structure. So many consumers may not think they are eating too much meat. 
2. Outside of practicing Buddhists, full-on vegetarianism and veganism aren’t really a mainstream thing in China, nor is making dietary choices for environmental reasons. Being flexitarian is much more common. It will be hard for brands to convince consumers that by having plant based meat, they are protecting the environment. People are more likely to have plant based meat for personal health reasons. 
3. High prices and taste issues may discourage consumers from trying out plant based meat. At the moment, the manufacturing scale of plant based meat is still small. Without massive production, the price will be slightly higher than real meat. And the taste is also a key area that brands need to work on. 

For example last year many large international fast food chains started adding plant based meat options into their menus. But while there was a lot of fanfare around the launches, not all consumers are into it. The other day I was having breakfast at McDonald‘s and I overheard a girl asking waiters if there were there any breakfast sandwiches with real meat and she didn’t want plant based meat in it. It is still a long way ahead for plant based meat brands to educate Chinese consumers.

The Potential of the Plant Based Meat Market

Despite all of this, the market is still expected to grow. Here’s why: 

1. Government Policy: China’s government was already aiming to cut the country’s meat consumption by 50% before the year 2030.
2. Food Safety and Health Concerns: Past issues with swine disease and bird flu have caused many consumers to be cautious about meat. The COVID-19 pandemic has also driven many affluent consumers to think more and invest more in their health.  
3. Plant Based Meat Not New: China already has a number of meat substitutes, like tofu. Tofu-based foods are already commonly seen at breakfasts, lunches and dinners in China. Apart from tofu-based products, Buddhist monks also have a long history of creating mock meats — made mostly from soybeans and wheat gluten — often look similar to meat but don’t taste the same. There are Buddhist-run restaurants in cities throughout China that only use these mock meats. 

Case Study: How is Local Brand Zhiai Trying to Make Headway in the Market

Zhiai Life is one of many local brands trying to gain market share. The parent company of Zhiai Life is PFI Foods. It used to be a B2B company, providing instant food for restaurants. In 2020, PFI entered the B2C space with the launch of Zhiai. 

Here’s what Zhiai has done to grow over the past year: 

Redefine Target Consumer

Unlike many other plant based meat brands in China, Zhiai is trying to reach a broader audience and doesn’t confine itself to health-focused consumers who go to the gym and are seeking to lose weight. It defines its customers as people who are enthusiastic and love exploring lives. They love experimenting new things and it has nothing to do with income, areas and age. 

Change The Brand Name 

To promote this message and the ongoing use of the product, Zhiai (植爱) changed its name to Zhiai Life (植爱生活). Zhiai Life wants to break the stereotype that it is a futuristic brand that people try once for the novel experience and then never use again. Instead, Zhiai wants to be part of their lifestyle, embedded into customers’ three meals every day. 

Using the DTC Model and Offline Activations

Parent company of Zhiai, PFI Foods used to be a B2B company. In fact, many plant based meat brands are B2B and they are relying on a third party to reach their customers. Well, Zhiai is not following this trend. It is taking a DTC approach. 

It held offline activities to talk to its customers directly. For example, it joined calorie challenges (植物肉千卡挑战活动) with many other food brands, it showed up at the Bund weekend market and the International Beer Festival held in Shanghai. Every month, it has nearly 1,000 tastings in many cities. The brand also collaborates with many popular western restaurants to reach new consumers. 

Leveraging Livestreaming 

As we all know, online traffic has become very intensive and the way how Zhiai Life promotes itself online is by working with KOLs and celebrities. In total, more than 5M people have watched Zhiai’s livestream with influencers.

Upgrade Supply Chain & Localize Flavors

As we mentioned before, it is very hard for plant based meat brands to improve their taste. It needs the brand to be fully engaged in monitoring every process. To achieve this, Zhiai created its own vertical supply chain, from raw materials to manufacturing.

Zhiai has R&D teams in San Francisco, Singapore and Anhui Province in China. Every team is assigned with different tasks. For example, the American team is in charge of improving taste and the Singapore team focuses on vegetable protein meat ingredients and Chinese team is responsible for localizing products by adding Chinese flavours or smell etc. 

As plant based meat is still very novel for the majority of Chinese consumers, Zhiai figures out a way to make its products become common. It is using frozen dumplings as its carrier to get its foot in the door for more consumers to try it. On Xiaohongshu, consumer feedback is quite positive and they are saying this can be had if you are in a rush and want to finish a meal quickly. They are also saying the taste is no different than real dumplings. 

Zhiai is also creating other “fast food” that can be heated in the microwave. Based on our past research on the growth of the meal replacement industry, I think this will become a popular choice among city workers as their speed of life is fast and this is something healthy and low calorie for them to try.

Read more: 植爱生活品牌升级，从日常生活场景切入，连接消费者｜BrandStar