How the Growth of China’s Middle Class is Impacting Alternative Proteins

As of 2021, the average North American eats about 220 pounds of meat a year. In China, that figure is about 140 pounds per year. There’s a gap, but it’s nowhere near where it was 40 years ago when North Americans ate about the same amount as they do today while the average Chinese citizen was only eating around 30 pounds of meat a year.

Why is this happening? For one thing, it’s the rise of the middle class over the last few decades.

As incomes rise, people naturally want more protein in their diet, and with a population of 1.4 billion people, that type of growth can create massive changes in consumer demand. That’s why right now we’re seeing Chinese companies acquiring U.S.-based meat companies and importing more soybeans from the U.S., Europe and Brazil for animal feed. It’s a growing middle class, and it wants meat.

But that’s not all that’s driving this demand.

For one thing, animal protein has become a signal of wealth in China as the middle class continues to grow. If you host a wedding banquet or a fancy dinner for friends, the way you treat your guests is to have a lot of meat and seafood dishes on the table. Yes, things like tofu, soybeans, edible fungi and a variety of other plant-based proteins and plant nutrients have been part of the Chinese diet for centuries, but a richer, modern China wants meat and seafood.

China’s mock meats go way back to the Tang dynasty. These things have always been around, but they haven’t traditionally been replacements for meat, especially for the mass market. When plant-based meats entered the market in places like the United States or Europe there was no identification with an existing category of foods. There has never been a particularly strong vegetarian or flexitarian culture in the west like there is in China and elsewhere. There were few previous products to compare early plant-based meats to and even fewer preconceived notions about where they sit in relation to other foods.

Whereas in China, when you introduce a plant-based meat many people already make the connection: This is just what people eat for religious reasons. It’s a different mindset, a different set of experiences, and it calls for a different approach to the market.

Take my experience, for example. I grew up in Canada where over the last 40 years or so there have been a lot of advocacy organizations like PETA and Humane Society creating discussions around society’s treatment of animals. Novel alternative protein products that “taste like meat” are giving consumers a chance to skip the meat and live a more ethical, environmentally sustainable life. This is at least part of the “flexitarian consumer” story.

But in China, where there hasn't been that tradition of animal advocacy, you don't necessarily have those attitudes. You put an alternative protein product beside an animal protein product and you’ll often just get questions: Why would I want to eat fake meat? Why wouldn't I just eat animal protein??

It’s a very unique problem that is specific to China. How can we replace the meat products that Chinese consumers want without dictating any moral requirements or opinions on them? In the end, that would be counterproductive anyway. The solution, as we see it, can be found in innovation and probably only in innovation. We need game-changing, next-gen food entrepreneurs who deeply understand the unique attitudes and expectations of Chinese mainstream consumers, create great products and market those products in ways that are effective.

International alternative protein investors and companies should understand that the basic drivers of the Chinese market are quite different.?Sure, we believe that over time there will be a huge demand for alternative protein in China, but the pathway to success will likely look a lot different.