CHINESE PLANT-BASED MEAT MARKET
The ascent of plant-based meat alternatives has reshaped menus in restaurants and fast-food chains across the US, led by a parade of high-tech burgers, nuggets, and sausages that look (and sometimes taste) like the real thing. That’s all fine and good for American consumers who gravitate toward fried foods and processed meats. But what about the 1.3 billion people living in the world’s second-biggest economy?
Starbucks and KFC are testing China’s market preference for plant-based meat alternatives with new menu offerings.
Starbucks is partnering with the plant-based meat companies Beyond Meat and Omnipork to offer more vegetarian-friendly food options, such as lasagne imitating the taste and texture of beef. KFC, meanwhile, is also collaborating with the US agribusiness company Cargill to introduce a limited run of plant-based fried chicken in select locations in China.
The new products on offer by Starbucks and KFC represent the latest effort by both food and beverage companies and plant-based meat producers to test the Chinese market’s interest in new types of meat substitutes. The industry is still relatively young worldwide, and especially so in China.
UNDERSTANDING THE CHINESE PLANT-BASED MEAT MARKET CONSUMERS
MAIN BRANDS STRATEGIES TO SELL PLANT-BASED MEAT IN CHINA
The concept of artificial meat is not new, especially in China. In China, imitations of meat products have existed since the 6th century, when Chinese Buddhists created vegetarian versions of traditional dishes.
What makes the new generation of plant-based meat different from previous iterations is the use of technology to design flavors and textures that look so much like meat that it can be difficult to distinguish. Beyond Meat, one of the industry’s leading companies, uses pea protein as an engineering base, while Impossible Foods – another industry leader – uses a soybean base.
Some companies, such as JUST Meat, develop meat in animal cell cultures, although these are not the same as the meat of plant origin and have not yet been released for mass consumption.
Since the meat of vegetable origin so closely resembles real meat, producers hope not only to reach vegetarian and vegan consumers, but also meat-eaters. To do this, producers use ethical arguments that plant-based meat is healthier and better for the environment than real meat.
THE INCREASE OF PLANT-BASED MEAT CHINESE CONSUMERS
Chinese consumers are now more open to the idea of plant-based meat products, contributing to a healthy lifestyle.
Many Chinese consumers are actively seeking to reduce meat consumption. Chinese consumers are cutting back on meat consumption, opting instead for more vegetables, tofu, and vegan meat substitutes. China already has over 50 million vegetarians, who offer an immediate consumer base that doesn’t need to be convinced to experiment with meat alternatives.
According to research conducted in 2019, over 80 percent of consumers who had eaten plant-based meat within a six-month span were born after 1990.
The COVID-19 coronavirus epidemic has also highlighted some of the potential safety benefits of a pivot towards plant-based meat in China. Over 90 percent of the world’s meat comes from industrial farms, where animals are kept close to each other in potentially unsanitary conditions, which could favor epidemics.
While Chinese consumers have had little exposure to new plant-based meat products, there are signs that the market may be receptive.
US BRANDS VS CHINESE BRANDS – PLANT-BASED MEAT MARKET
China already accounts for 53% of the world meat substitute industry, compared to only 5.5% in the United States, although this segment is dominated by traditional meat substitutes.
Compared to North America, where companies like Beyond Meat and Impossible Foods have become market leaders, the Chinese market is more fractured. For example, Beyond Meat’s partnership with Starbucks is the company’s first foray into mainland China.
Domestic Chinese startups such as Zhenmeat and Starfield have emerged in recent years, offering similar plant-based meat substitute products, with the first products based on green beans and pea protein and the second based on bean protein. However, their food technology is still considered less advanced than their US competitors.
One area where local businesses can have an advantage, however, is to offer alternative meat products suitable for Chinese dishes and satisfy the local palate.
In addition to offering products such as hamburger patties and hot dogs, Chinese companies are developing plant-based alternatives for popular Chinese dishes, such as meatballs used in hotpots. Zhenmeat is also experimenting with 3D printed bones to mimic the experience of eating meat off the bone.
You can also read our Strategic Guide to Export Food Brands in China
MARKETING ENTRY STEPS FOR FOOD AND BEVERAGE BRANDS IN CHINA
Finding the right partner
For multinational food and beverage operators, finding the right local partner is essential. Different companies have different bases for their products and the right size can depend on the kitchen and other products offered by competing competitors.
This is particularly worrying for foreign companies offering localized Chinese menu options, as they may find a Chinese company more suited to their needs than a US company with superior technology. Food and beverage operators may have to sign exclusivity agreements with suppliers of meat of vegetable origin, making it more difficult to find a partner that meets all the operator’s needs.
Licensing and trademark concerns
Food and beverage operators need to negotiate licensing and trademark issues with their partners. Plant-based meat products are often listed on menus with the manufacturer’s brand, but the specific recipe can be developed by the food operator. Therefore, the two sides must agree on the quality and presentation of the product, as well as the rights on the recipe.
On the other side of the report, manufacturers also need to find food and drink operators who will showcase their products effectively, which is especially important for new entrants who wish to develop their brand reputation.
Food safety and quality standards
Due to a history of major food safety scandals, Chinese consumers are very demanding about food safety, especially new ones they may not be familiar with. Violations of food safety, both in the preparation of meals and in the production of the plant-based meat itself, can also definitively put an end to the chances of a brand being successful in China.
Securing regulatory approvals
Obtaining regulatory approvals for plant-based meat products can be challenging. China bans genetically modified ingredients for human consumption, which some vegetable-based meat producers rely on for their products.
Impossible Foods, for example, relies on a genetically modified protein to give its products a meat flavor and to imitate the juices present in real meat. Such a product would be challenged to obtain approval from the Chinese State Administration for Market Regulation (SAMR), the key body responsible for regulating food and beverage products.
MARKETING SOLUTIONS FOR FOOD AND BEVERAGE BRANDS IN CHINA
Companies that build a detailed digital marketing strategy and focus on the evolving trends and further address these trends and learn how consumption is driven by new shopping behaviors, preferences, and habits will be forerunners in a market worth trillions of dollars.
Marketing strategies are very important to achieve their goals and to be successful. When a brand wants to enter in the Chinese market, there are several steps to follow and GMA can help you through the best marketing strategies for your brand. Below you will find some important points for success :
MARKETING TO DISTRIBUTORS
China is a completely different market than anywhere else in the world. If foreign brands can’t find quality distributors, it becomes difficult to get a return on investment. Local Chinese distributors are very demanding in the Chinese market and also maintain a reputation so in the first place, getting noticed by them and being chosen by them is almost impossible if a brand has not already created awareness on Chinese digital platforms and portrays a good reputation.
CUSTOMER ENGAGEMENT THROUGH SOCIAL MEDIA
Chinese people like to photograph their meal, in China’s highly connected environment, customer engagement must be the top priority in the food sector. Chinese customers like online interactions and can be achieved with the help of interactive apps and games. Netizens seek personal experiences in an app, which could be encouraged through individual dialogue or contextual engagement.
Customers can engage in Chinese social media such as Wechat and Weibo, where Chinese consumers are very active and respond to every post is considered an obligation. Although managing social media engagement in China is not easy, a negative comment can flare up in a bad image, so companies need to develop new models and processes to effectively engage people in order to communicate brand identity and values together to keep customer preferences in mind.
You can also read our Strategic Guide to Export Food Brands in China.
BRANDING IS THE KEY IN CHINA
No matter how popular a brand is outside China, but to the Chinese audience only what is visible on the Chinese digital platform is known.
In China, consumers look for new and trustworthy Food and Beverages brands. Consumers must be told about the benefits of the product.
Numerous well-known brands want to convey friendly messages to attract Chinese consumers, but sometimes end up offending Chinese consumers because of a lack of knowledge of Chinese culture. Therefore, it is extremely important to understand the local culture in China and to lead the brand accordingly.
Products and services must be offered to meet Chinese consumer preferences. Chinese consumers rely heavily on social media to learn about new brands and products. Online forums where product reviews are shared also count a lot in building the brand.
Influencers are another effective way to sell products in 2020. Retailers are looking for influencers that are related to their brand values. Customers already trust the influencer and their recommendations. Chinese consumers use social media to see which product KOLs and celebrities are supporting, more than Western consumers. KOLs interact interactively with consumers, raise awareness and help build brands.
There are three main search engines in China. As Baidu is the largest and best known, it is used the most with 70% of the market share. To earn more traffic and earn, a brand can establish itself on Qihoo 360 and Sogou.
SEM is another good option for driving traffic to a website, although it requires a higher marketing budget.
E-COMMERCE PLATFORMS FOR FOOD AND BEVERAGE BRANDS IN CHINA
E-Commerce is more utilized in China than in other markets, this is mainly due to the nation’s strong digital infrastructure. Chinese consumers prefer to buy products online more for convenience than price. Chinese customers are extremely tech-savvy and use mobile technology to increase their functionality. Consumers in China appreciate new technologies and show the early adoption of new products.
Companies need to design their business functions with a full-channel vision to win the future Chinese shoppers who are becoming increasingly sophisticated and multichannel.
Alibaba has introduced a growing chain of cashless supermarkets. The chain store is called Hema and seeing the popularity among Chinese consumers Alibaba plans to double its locations in China to nearly 60 this year.
Shoppers use their phones to pay for food at Hema.
In addition to that, Hema has two other services: on-site chefs offer to cook shoppers’ groceries on-demand, and there is a courier service that can deliver online orders within 30 minutes. This is a new concept which gained instant popularity in China, it seems like Chinese consumers like some entertaining action.
Do you want to know more about How to enter in the Chinese plant-based meat market? Contact GMA a digital marketing agency, specialized in the Chinese digital market.
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