Will China buy America's fake meat?

Beyond's Impossible Burger in New York on Aug 30, 2019. Beyond Meat and Impossible Foods are eyeing the Chinese market. PHOTO: NYTIMES

HONG KONG (BLOOMBERG) - In the Wangjing neighbourhood of Beijing, ZeroGo is one of the city's few vegan restaurants. It offers pizza, protein bowls and Asian-fusion fare, and online reviews rave about the menu's creativity, which includes a vegan Big Mac, complete with vegan cheese and dairy-free special sauce. The "burger" is made from scratch, an original, pea-based recipe.

If the American fake-meat darlings Beyond Meat and Impossible Foods have their way, chef Raymond Xie will soon be able to use their meatier patties. The problem is, he doesn't want to. "I want to use real fruits and vegetables," he said. "Not products made with the intention of being a direct meat substitute."

Plenty of Chinese people share the scepticism about American-style, plant-based imitation meat, a fact Beyond Meat and Impossible are about to confront. Both are hungrily eyeing China, which accounts for 27 per cent of the world's meat consumption by volume. The recent outbreak of African Swine Fever has driven up the price of pork and primed consumers for alternatives, and if the American companies can win over even a small fraction of the country's 1.4 billion people, the opportunity is massive.

"We want to be as aggressive as we can," Beyond Meat chief executive officer Ethan Brown said in an interview with Bloomberg in October. The company, whose shares have tripled in value since a May IPO (initial public offering), wants to have production running there before the end of 2020. The response at SIAL, a major food industry trade show earlier this year, was encouraging, the company said.

Impossible Foods also recently made a splashy trade show debut in China. In November, the company brought almost 50,000 samples of its eponymous meatless beef to attendees at the China International Import Expo in Shanghai. Chief executive officer Pat Brown told Bloomberg that it already had a "very good" prototype of plant-based pork. China has "always been the most important country for our mission", he said.

But neither Beyond nor Impossible has shared a detailed game plan, and the obstacles are at least as significant as the opportunity. The Chinese already eat plenty of plant protein. Restaurants prominently feature tofu, seitan and "mock" meats, and local start-ups are offering more novel iterations. Plus, for newly middle-class Chinese consumers, meat is a status symbol. When consumers do choose to eat less meat, they, like chef Xie, are often looking for more natural products. And as with all other foods in China, there's always a question about safety.

Impossible will also need government approval for heme, its "magic ingredient" that's made from genetically modified yeast. When might that come? "We can't comment on behalf of the Chinese state," company spokesman Rachel Konrad told Bloomberg.

While Beyond has announced a partnership with Taiwanese online retailer momo.com Inc, its Asian expansion is still in early phases. The day after an earnings call in which Beyond's Mr Brown touted the company's presence in countries like Hong Kong, Thailand and Singapore, he told Bloomberg that Beyond is still "seeding the markets".

"There's not a lot of sophisticated work with the Asian palates and things like that," he said. "We gotta get better on that."

Like Beyond, Impossible frequently touts its presence in other Asian markets and says its "meat," while usually served as a patty in the US, nimbly features in dumplings or banh mi tacos. But while American restaurants haven't always been able to keep the meat-substitutes in stock, thanks to their skyrocketing demand, Asian consumers have been less excited. Several Hong Kong restaurants sold the Impossible burger for short promotions then decided not to make it permanent after lacklustre sales. One purveyor said the product had spoiled in the fridge.

"The market will determine whether the company is successful," Impossible told Bloomberg, "so we deeply respect the decisions of customers and consumers." It added that "internal customer sentiment in Asia remains high" with more than 500 restaurants serving its product internationally.

Animal-free foods have long been prominent in Chinese cuisine. "Mock meat" dates to the Chinese Buddhists of the Tang dynasty (618-907), and tofu is only slightly more recent. Today, vegetarian mock meats, called surou, are typically made of wheat gluten, beans and mushrooms, and they're not solely used on strictly vegetarian menus. Almost three out of four Chinese people said they'd be willing to swap meat for a plant-based substitute, according to one 2018 survey, more than any other country.

High quality and global reputation give Beyond and Impossible an advantage, said Graham Miao, general manager at GFIC, a Beijing-based nutrition consulting firm. But the marquee products are based on ground beef and variations, which aren't typical in Chinese cuisine. If the American companies don't "localise swiftly and effectively," Mr Miao said, they'll lose out to "ambitious Chinese companies focusing on Chinese-designed products of high quality".

Several Chinese companies are already starting to make headway with their own new meat alternatives. Zhenmeat, for example, used social media to launch vegan meat mooncakes just before the Mid-Autumn festival in September and quickly sold out. Hong Kong-based Green Monday has also unveiled Omnipork, an imitation pork product, made from mushroom, pea, soya and rice.

The last hurdle, in China and elsewhere: Price. Beyond Meat and Impossible still cost more than beef in the US, but the gap is closing. An Impossible Whopper at Burger King, for example, costs only US$1 more than a beef Whopper. "We're gonna price it as affordable as we possibly can," Impossible's Brown says, adding that the company expects to be able to compete on price when the firm is at "full scale" - whenever that day comes.

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