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China’s alternative protein gold rush (3/4) - Chinese consumers’ insights on plant-based meat

Is there a real market demand for alternative protein in China or just a flush in a pan? To understand the longterm development of alternative protein in China, we bring you the nuances from the demand perspective and the history of alternative protein in China.

· Food

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In the third part of our series on alternative protein in China, we are diving deeper into the demand side, and into the question of consumer adoption of plant-based meat products. We will first investigate the origins of animal and plant-based meat in China, and how the past may help us inform about future predictions. We will then derive insights from some of the recent key literature on the topic.

Source: The Economist, 1843 Magazine (2018)

A short history of animal meat and plant-based meat in China

 

Some scholars argue that plant-based meat in China dates back to the Song dynasty, with records of monks eating vegetarian meat as early as the 10th century. Others argue that plant-based foods arrived in China before Buddhism, and that mimicking meat is an art, which can be traced back as far as the Tang Dynasty (AD 618-907). Fuchsia Dunlop, one of the most prominent Chinese food critics, writes in the Economist’s 1843 that China is the birthplace of fake meat. “In the time of the Tang dynasty, an official hosted a banquet at which he served convincing replicas of pork and mutton dishes made from vegetables.” She goes on to argue: “Everyone in Shanghai eats vegetarian ‘roast duck’ or ‘goose’, which is made from layers of thin tofu skin, which are flavored and then deep fried so that it has a golden skin like the real dish.”

Up until the mid-20th century, animal meat was in fact rarely consumed. Consumption started to take off after the Great Famine (三年大饥荒, from 1958-1961), and accelerated significantly after Deng Xiaoping’s 1978 ‘Opening of China’ (改革开放).

As underlined by Sans & Combris (2015), GDP growth and meat consumption are indeed highly correlated:

For the past few years though, animal meat consumption has plateaued in China. As underlined by Dunlop, “after this period of indulging in rich food, China has reached a new level of culture and development. People want to eat healthier and prolong their lives, so vegetarian eating is becoming more popular.” It sounds like these shifts in consumer expectations will be favorable towards increasing consumption of plant-based meat.

Plant-based meat 2.0 in the literature

Dr. Annet Hoek argues that there are two requirements in order for plant-based meat to be widely recognized as a valid substitute for animal meat. The first is a product quality which is comparable to the product it is trying to replace. Investing into R&D generally solves for this. The second is a fit with customer needs. Understanding the consumer is especially vital in a market as large and diverse as China.

Christopher Bryant (2019) was one of the first scholars to author a detailed study of Chinese consumers about 2.0 plant-based foods. According to him, there are typically three key reasons why consumers eat plant-based meat: 1) personal health, 2) environmental protection or 3) animal welfare. His high-level results found that in China, the perceived healthiness of plant-based food is an increasingly strong driver.

Back in 2017, a study of 2,000 Chinese consumers by The New Zealand Institute for Plant & Food Research had found similar results. When asked about why they were reducing their meat intake, a majority of respondents cited “health benefits and managing personal weight” as the top reason, with environmental concerns a close second. On the topic of health, the report stresses that food safety is top-of-mind for the Chinese consumers, not least because of the many recent food scandals, often involving meat. Among them, the 2013 “Cat Meat” Huai'an City scandal, or the 2011 “Tainted Pork” scandal. This is why “credentials and assurances that signal authenticity and food safety are strong purchase motivators.” On the topic of environmental protection, the Institute argues that this is an increasingly important driver of consumption, with 42% of respondents saying that they were “looking to choose foods that are better for the environment.”

All of these findings were supported by the author’s own research, based on a survey of ~250 Chinese and French consumers. This research was born out of a major caveat in the literature, which is that plant-based meat is too often studied in a silo, whereas in order to derive more granular insights, it should rather be studied in light of general food consumption patterns as well as animal meat consumption patterns. In the survey, consumers first answered general questions related to their values (and specifically how much they care about personal health, environmental protection and animal welfare), and they then ranked the salience of key attributes (e.g. tastiness, healthiness, naturalness etc.) when they consume food in general, animal meat, and plant-based meat (if applicable). The results are deeply insightful, especially when contrasting the Chinese with the French consumers.

Disclaimer: the results discussed below stem from an exploratory analysis with a limited sample size. The observations may not be generalizable to the whole Chinese or French populations.

Contrasting behaviors in China and France

On values:

  • Chinese consumers care highly about all three key values (personal health, environmental protection and animal welfare) - but personal health is the most salient.
  • French consumers, in contrast, seem to care most about environmental protection, with personal health a close second.

On food in general:

  • Chinese consumers rank healthiness as the single most important attribute when purchasing / ordering food in general. Texture of a product was also very highly ranked, as was naturalness. Indeed, Chinese consumers hold a negative perception of genetically modified food, and genetic engineering more generally. As expressed by Professor Cong Cao of the University of Nottingham’s Ningbo campus: “even though you have so many years of testing, Chinese consumers still feel uncertain about whether it’s going to cause problems.”
  • French consumers rank tastiness as the single most important attribute. A good smell is also very important. Like the Chinese, they have a very low tolerance for GMOs. But as opposed to Chinese consumers, they do not consider the texture of food to be of primary importance.

On animal meat:

  • Chinese consumers rate animal meat quite positively overall. The data also shows a high correlation between plant-based meat scores and animal meat scores, such that Chinese consumers typically give them both, a high score, or a low score. This seems to suggest that Chinese consumers do not view meat and plant-based meat in opposition, and rather see them as complements in China.
  • French consumers rate animal meat less positively than in China. Interestingly, those consumers who rate animal meat highly will tend to rate plant-based meat poorly and conversely - i.e. there is a negative correlation between the two scores. It sounds as though most consumers either consume one or the other - they are not substitutes.

On plant-based meat:

  • In both China and France, a really encouraging insight is that there is a positive discrepancy between the perception of plant-based meat post-trial versus pre-trial. In other words, plant-based meat is better than anticipated by the consumers.
  • In terms of product design, strikingly, a large majority of Chinese consumers believe that plant-based meat should be as similar to animal meat as possible in terms of smell, shape, taste and texture. As for the French consumers, texture and taste seem to be the top two features where resemblance to meat is important, but only a minority view exact similarity of shape and smell as crucial.

The road ahead: implications for businesses

The great news is that Chinese consumers seem to react really positively to plant-based meat. For one, this is due to the fact that alternative proteins have been part of the Chinese culture and tradition for centuries. It is also due to the alignment of plant-based meat products with the increasing Chinese concern with healthiness in all its forms.

The comparison between China and France highlights the need for localization. If firms want to win large market shares in the 2.0 plant-based meat market in China, they should give customers what they are looking for. This means designing products with special attention given to healthiness and nutrition (e.g. decreasing saturated fat content or increasing omega fatty acids). As Chinese consumers typically like both animal meat and plant-based meat (i.e. they are not mutually exclusive), advertisements should underline the similarity to meat, and not overly criticize meat, as doing so means to risk alienating a portion of the consumers. Companies should underline personal health as a benefit of plant-based meat consumption, as this is the single most important value in China, but animal welfare and environmental protection can also be emphasized as consumers care about those too.

To conclude, our view is that the attitudes of Chinese consumers toward plant-based meat is a very positive signal for all companies looking to double down on the China market. While the market is promising, it is also increasingly competitive, and the winners will be the ones who manage to effectively design and market products that are the best match for the specific taste of Chinese consumers.

All opinions expressed in this essay represent my personal views only.

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