SPEAKER_00: TED Audio Collective.
I'm Elise Hu. It's TED Talks Daily. Each part of China offers such vast menus of creative, delicious cuisine that just thinking about it is making my stomach growl. But in our quest to tackle climate change, getting the Chinese market to switch to plant-based alternatives is vital.
In his 2023 talk from the TED Countdown Summit, impact investor Tao Zhang offers an on-the-ground look at getting mainstream Chinese consumers to switch to new proteins.
After the break.
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SPEAKER_01: My wife is the last person in the world who would consider me a foodie type of person.
She's always puzzled at why sometimes I couldn't even tell the difference between beef and pork when shopping or eating.
So a few years ago, when I told her that I found my calling in food as impact investor, she was shocked and thought I had a midlife crisis.
But the impact logic behind my midlife crisis or midlife epiphany is simple.
Given its size and reach, there's no way the world can achieve its climate goals without engaging China in a significant way.
This is why I've spent much my career focused on supporting environmental entrepreneurs in China, mainly in industrial space. Things like energy or recycling.
But I've always wondered about how to reach the vast number of Chinese consumers.
I found my answer in alternative proteins,
or what we prefer to call new proteins nowadays in China.
New proteins can be plant-based, microbial or cell-based alternatives to resource-intensive, environmentally challenging animal proteins.
China consumes 26 percent of the world's meat
and 45 percent of the world's seafood.
It's also worth mentioning that China accounts for 43 percent
of the world's pork consumption in the meat category.
This number is massive, but if you look per person,
meat consumption in China is still low, about half, compared to the US. For milk, consumption per person is less than half. In comparison, and driven by rising incomes and demand,
these figures can only go up. Meantime, global investment in innovative foods,
with new proteins as the majority, were over 10 billion dollars from 2020 to 2022. But China had only 3.5 percent of the total, at 362 million dollars.
I realized that investing in new proteins should be China's answer.
Chinese consumers can be a part of the country's environmental solution,
and by extension, part of the global solution to tackle climate change. Without a doubt, it is a huge business opportunity in the long run as well.
But how, exactly? How do we get people in China to embrace new proteins?
And how do we get them to embrace new proteins? As has happened in other parts of the world. Growing up in China, I always see food as an integral part of my culture.
On all occasions, big or small, there's some banquet. Like when babies are born, loved ones pass away,
friends get together, will bid farewell to one another. And we always need so-called hard dishes, yin cai, as a core part of these occasions. Meaning dishes with abundance and varieties of meat.
Chinese people don't just enjoy eating.
Eating defines who we are and where we stand in society. As the Chinese saying goes,
wú rǔ bú huán, meaning that there's no pleasure in eating without meat.
Meanwhile, China has a long history with plant-based foods,
which sounds positive for new proteins, but is actually a challenge.
Old-generation mock meat products especially have had an active perception
with mainstream consumers. They are seen as cheap, distasteful, unhealthy alternatives,
and are more intended to serve religiously vegan and vegetarian consumers. Environmental and animal welfare advocacy groups
have shifted consumer mindsets in the West, and eating plant-based meat is considered morally positive. But in China, mainstream consumers aren't easily swayed by the moral argument for now.
China's consumers are also highly demanding regarding taste, price and convenience.
China is incredibly diverse in terms of style of cooking and food applications.
Basically, each province or region has a style of cooking.
There's Beijing cuisine, Shanghai cuisine, Hunan cuisine,
Sichuan cuisine, and Chinese cuisine.
And unlike Chinese restaurants in the US, these regional cuisines are not just different in the name.
They do taste different. They do taste different. They do taste different. They do taste different. They do taste different.
To be successful and to have an impact, entrepreneurs can't just come up with a product that swaps out neatly for meat products. Alternative products will need to be tasted and be used to make a difference. Moreover, we need new distribution channels beyond specialty stores and vegetarian restaurants,
and they must be widespread nationwide, especially in China, where online selling plays an increasingly dominant role.
And with young generation mainstream consumers, we need to be able to make a difference. And with the younger generation, we need to be able to make a difference. And with the younger generation, we need to be able to make a difference.
And with young generation mainstream consumers,
it certainly helps engage high-end chefs to put new proteins on their menus.
And these new products need personality,
brands that seem hip and compelling to younger consumers.
New proteins must also enter the consumer consciousness on a wholesale level, meaning the entire industry needs good marketing campaigns.
Entrepreneurs need the support of one another and all relevant stakeholders to gain momentum.
All of this requires investment and patience, of course.
The good news is that we're starting to see some progress.
For example, look at an attorney diary company, Oli.
The Oli Tea Master, an oat-based drink developed in China, replacing cow's milk for milk tea,
was introduced to the Chinese market in March 2022.
By the end of 2022, the product had entered over 50,000 tea stores around China, with 20 million units sold.
Oli's initial success in China has resulted from its localized product and marketing strategy, investment in local production and distribution channel expansion in collaboration with local partners.
Meanwhile, mainstream Chinese consumers have been drinking all flavors of plant-based milk because of the past lack of cow milk products. I believe plant-based drinks are a low-hanging fruit for introducing new proteins and having an impact in China more quickly and in a more capital-efficient way.
Dow Foods, the investment firm I co-founded,
has invested in about 20 new protein companies in China and for China.
Products from Starfield, Xingqilin, such as their plant-based tuna, beef and chicken, are showing up on restaurant chains and store shops across China. Its clients include Sam's Club, KFC, Family Mart and China's equivalent, a Starbucks, Lacking Coffee, to name a few.
PlantNow, Zhu Jia Dao, a plant-based milk tea venture, has recently entered more than 500 local convenience stores in Qingdao, a new tier-one city on China's east coast, and is ready to enter another 1,000 stores in China's Anhui province.
With their coconut milk tea product.
This young generation of entrepreneurs are trying to develop products that appeal to mainstream consumers in every way.
Equally important, they're helping overcome the negative perception of plant-based products with a new-looking view and working with the right distribution partners.
Aside from entrepreneurial efforts, the new protein sector in China is also gaining momentum on a few other fronts.
Over the past few years, we've hosted eight boot camps across China, bringing together and inspiring hundreds of entrepreneurs who spend time learning from their peers and figuring out how to better their technology, improve marketing, expand distribution and raise more money.
Chinese President Xi Jinping made some food-related remarks last year, encouraging the seeking of new proteins from plants and microbes.
Local government is getting involved as well.
One municipal government in China's Yangtze Delta region agreed to jointly develop a new protein entrepreneurship program with us, offering office space, potential funding and more.
I would love to see mainstream Chinese consumers massively adopt new proteins, making them a part of their daily diet.
I don't expect consumers to give up on animal products entirely,
but having more protein diversification and choices will allow them to weigh factors like the environment and climate impact to make more balanced and informed food decisions.
Given China's rising demand for quality proteins and the climate ramifications,
climate-friendly investors worldwide should be all over new proteins in China,
but they are not.
Many international investors continue to shy away from China.
Maybe geopolitics is the problem. Perhaps they aren't sure if they'll be able to get their money out of China if they need to.
Or it could be the flawed assumption that China's problem is so unique that it requires solutions led by Chinese people alone.
But whether you're an investor, entrepreneur or consumer, if you want to be a hero and game changer in this space,
show me the money. LAUGHTER
Even if it's just one meal at a time, one product at a time, or one investment at a time.
China is indispensable in addressing global climate challenges, and we should work collectively to make China part of the global solution.
Let's all strive beyond. Do the impossible. Always look at the upside and keep exploring the way, aka the Dow, to get there. For the one and only planet we share and call home,
we must do it, we can do it, and we will.
Thanks, everybody. APPLAUSE
