Plant-based foods attract more gourmands

Rising awareness of health and wellness is behind the popularity of plant-based protein-rich foods among consumers－be they mock meats available at restaurant chains or dairy products offered at stores and cafes.

Experts explained that the increasing acceptance of plant-based foods reflects the diversified needs in today's consumer environment.

"With the economic development and expansion of the middle-income group, Chinese consumers are looking for more options to get protein. In addition, Chinese people are very open to trying out new things when it comes to food, especially those labeled novel, refreshing and delicious," said Jackson Chan, managing director of Cargill Protein China.

According to Cargill's definition, plant-based protein describes foods that contain vegetable protein and other ingredients to deliver a great taste that rivals animal protein counterparts.

China is a huge market for plant-based products, considering it has the largest population in the world, and enjoys great demand for animal and alternative proteins. As incomes continue to rise and consumption modes get upgraded, exploring new ways of procuring dietary protein will be further spurred on.

"There is the projection that global protein demand will increase by 70 percent over the next 30 years, which means we will need both animal proteins and alternative proteins to meet rising demand. This provides huge opportunities for companies like us that are trying to provide more protein options, and working hard to fill a global protein gap," Chan said.

Although the plant-based food market is an emerging category, there has been a long history of Chinese people trying to get protein from plants, such as having tofu and soy milk from soy beans. However, experts said bean products are a bit different from plant-based foods.

Traditional soy foods, such as bean curd rolls, can also be regarded as a kind of meat substitute. They are mainly soy-based or gluten-based. By contrast, plant-based meat can be created with more types of protein, which can offer diversified choices for taste, texture and nutrition requirements, said Pan Guangjun, business director of plant-based protein at ADM Human Nutrition in Asia-Pacific.

"Chinese consumers often easily confuse plant-based meats with traditional soy-based foods, so the market still requires further customer education to improve consumer perceptions," Pan said.

"Technically, plant-based proteins are made by restructuring the texturized proteins of soy, wheat or peas, and then adding other ingredients and additives, which is a more complicated compound, by contrast. The components are reorganized and can be mixed as new kinds of food," said Chan with Cargill.

According to Hong Xiaoqi, founder of Shanghai-based Hey Maet, compared with conventional bean products, plant-based meats can be created in accordance with various consumer demands, such as fitness, weight-loss objectives and others.

Euromonitor International said China's meat substitute market rose from $8.04 billion in 2015 to $10.81 billion in sales revenue in 2020, and it projected the scale to reach $14.15 billion in 2025.

Accounting for about half of the global market, the consumption in China, however, is mostly in the form of bean products. And also for this reason, the Chinese meat substitute market is forecast to grow at a slower pace in the coming five years vis-a-vis the global market, which is expected to expand from $20.74 billion in 2020 to $27.72 billion in 2025.

"The plant-based meat retail market in China is at an early stage, and most plant-based meats are cooked in Western cuisine and styles such as fast food including burgers, pasta and chicken nuggets," said Cao Wenli, research manager at Euromonitor International.

Currently, most of vegetarian demand is met by bean products, which means the traditional soy meat market is already well established.

Therefore, plant-based meat products can take advantage of consumers' familiarity with traditional soy-based meats, but they also need to help consumers distinguish between them in order to justify innovation and the premium image of plant-based meats, according to Gu Jing, category director of Mintel China.

Gu said Chinese consumers are keen on trying plant-based meat products of various types, especially middle and high HHI (high household income) consumers. Nearly 90 percent polled claim they are willing to try plant-based foods, and on average, consumers intend to try 4.2 types of foods using plant-based meat.

Like plant-based meats, demand for plant-based dairy products is equally impressive.

After an initial public offering on Nasdaq in which its market value reached some $13 billion, the world's largest oat milk producer Oatly vowed to further expand its retail channels in China, in addition to its products available at over 6,000 brick-and-mortar stores and 11,000 cafes across the country, according to a China Daily report on the plant-based dairy producer earlier this year.

Although there has been a long tradition of soy milk in China and other Asian countries, the very distinctive and strong flavor of soy milk leaves growth potential for plant-based dairy alternatives－including almond milk and oat milk－according to Dino Asvaintra, president of DSM Hydrocolloids.

In addition, the fact that a lot of Chinese and Asian people are lactose-intolerant means they might experience gastrointestinal problems after consuming traditional dairy products like milk or yogurt.

Mainly due to the negative retail impact from the pandemic, the plant-based beverage market experienced a significant drop in both value and volume sales in 2020, according to Yin Rujun, senior research analyst with Mintel China.

Market value saw a 12.1 percent drop and reached 54.6 billion yuan in 2020. Market volume also suffered an 11.8 percent decline to reach 3.52 billion liters.

"However, thanks to rising awareness of personal well-being among consumers, Mintel expects both numbers to bounce back to pre-COVID-19 levels from this year onward. Market value is expected to reach 77.5 billion yuan ($11.97 billion) in 2025, while volume is set to reach 4.74 billion liters in 2025," Yin said.

Plant-based proteins have emerged with a new concept focusing on vegetarian, health and environmental requirements. This means plant-based proteins are designed to provide more trusted, efficient choices of quality proteins that also celebrate taste and diversity, according to industry experts.

However, factors to contend are whether taste can win favor among consumers, and the cost of plant-based meats, which is more expensive than real meats. And the absence of national standards leading to the existence of lower-quality products in the market might hinder plant-based products, which are still at the very beginning of development.

"For the whole industry, the scale of the market and consumer acceptance will determine how far all companies can progress," said Chan with Cargill.

The taste of plant-based products and application scenarios should be the most important factors to feed the growing appetite for quality proteins, as consumers have higher requirements for taste and they want to try plant-based proteins in more situations, such as dumplings, hotpots and ready-to-eat foods. So we still need to continuously improve taste and expand applications, Chan said.

Economic factors must also be considered regarding the popularity of plant-based foods. At the moment, a plant-based burger alternative is still a bit more expensive than the real deal, according to Asvaintra.

"You're still going to really have to give people some good incentives as to why they would want to buy plant-based versus meat products."

Hong was optimistic that the economic problem can be solved with the development of the supply chain in China.

About 95 percent of the raw materials used for producing plant-based meat can be purchased in China. Once more production capacity is built in the nation, costs can be cut effectively, Hong said.

"One thing we are looking forward to is a national standard that addresses the specific requirements for plant-based foods. With that, industrial players can develop products in accordance with rules, and consumers' confusion on related products can be cleared up," Hong said.

Globally, 56 percent of flexitarian consumers are trying to consume more plant-based foods and beverages, pushing alternative proteins into an increasingly mainstream phenomenon. Demand for plant-based protein products is rapidly expanding beyond just burger analogues to new and novel products, including alternative seafoods like shellfish and shrimp, plant-based cheeses, ready-to-eat protein snacks and more, said Pan with ADM.