Earlier this fall we invested in HERO Protein, a Shanghai-based early-stage startup creating plant-based meat alternatives for the Chinese market. In this post we’ll talk briefly about why but the TL;DR: enormous impact upside, great market timing and well-positioned products and team.
It is no news that reducing meat consumption and replacing it with plant-based alternatives is one of the most effective ways that consumers can reduce their carbon footprint. According to Good Food Institute, eating a plant-based product like Impossible Burger instead of a beef burger reduces greenhouse gas emission with 89%, as well as reduces land use with 96% and water use with 87%.
China has the world’s highest total meat consumption, consuming about twice as much as the US, making our HERO Protein investment a no-brainer from an impact perspective. The Chinese meat consumption is largely driven by pork which is one of HERO Protein’s first products (plant-based pork that is); China has the 4th highest per capita consumption of pork, leading to half of the world’s pork being consumed there.
Whilst plant-based food is nothing new in the Chinese food tradition (for example, the legend says that tofu was first discovered by a Chinese cook about 2,000 years ago), we’re currently seeing a rapid market development with both international as well as local Chinese food brands, including HERO Protein, launching and pushing new plant-based alternatives. Impossible Foods Inc. is awaiting regulatory approval to enter China, and competitor Beyond Meat recently announced a partnership with Alibaba owned retail chain Freshippo as well as offers their products on chains such as Starbucks and KFC.
The shift towards plant-based alternatives in China is not only driven by health and environmental reasons, but has also accelerated in the light of the recent pandemic and animal-born diseases, especially the outbreak of African swine fever that has killed around 40% of China’s pigs and driven up the price of pork in the recent years.
The initial products by HERO Protein are formulated by an experienced team of experts with learnings from Beyond Meat, Impossible Foods and Gardein, and we believe that the combination of product development learnings from the rapid alternative protein scene in the US and a strong local Chinese presence and market knowledge makes them perfectly positioned to go after one of the world’s most interesting and disrupting alternative protein markets.