Where's the beef? The shift to healthy food
If you’re a meat lover, 2021 might make you reconsider your diet. Meat substitutes made of plant protein are one of several important trends in the consumer market.
Established packaged-food and consumer-goods companies are jumping on the new wave of meatless choices.
Burger King’s plant-based Whopper went on sale last week in the cities of Shanghai, Beijing, Guangzhou and Hangzhou, using Unilever subsidiary Vegetarian Butcher’s plant protein.
Guo Haibin, research and development manager of Vegetarian Butcher in China, said Unilever is considering different product formats that include various ingredients and half-cooked meals to be offered through retail channels in the first half of next year.
Burger King is also studying the placement of plant-based proteins in other menu items, according to its China Chief Marketing Officer Nicklaus Tang.
“Plant-based protein is certainly a trend here to stay and the ingredients can go all the way to pork, chicken and egg and it’s also looking at other alternative options,” he added.
Green Monday, a platform aimed at shifting the public toward a sustainable lifestyle, also opened its first Chinese mainland store in Shanghai last week after having nine stores in Hong Kong.
The new retail and dining space at the Raffles City in Shanghai’s Changning District is selling dozens of plant-protein and packaged food as well as dairy products from brands such as BeyondMeat, Unlimeat JUST and Califia Farms.
Co-founder and Chief Executive David Yeung said the group is aiming for at least one physical store in major Chinese mainland cities.
This September, Green Monday raised US$70 million in a fundraising involving TPG Capital’s Rise Fund and Swire Pacific Ltd. The money raised is earmarked for geographical expansion and research into new product lines.
By mid-2021, Green Monday aims to supply plant-protein and packaged plant-based food in China, with local production facilities in Guangdong Province.
Yeung said it will expedite the introduction of local cuisines using protein products in meals such as dim sum, semi-cooked foods and other types of snacks.
Tmall Global, the import sector of Alibaba’s business-to-consumer site, said sales of plant-protein food and drink products have tripled in the past year.
The number of overseas brands of plant dairy products opening Tmall Global stores also tripled in the previous year.
Green Monday’s retail store Green Common, which opened its flagship store on Tmall Global in November 2019, reports average monthly sales growth of more than 200 percent in the past year.
Market research firm Euromonitor International estimates the market size of alternative protein will reach 85.9 billion yuan (US$12.6 billion) by 2023, rising from 74.8 billion yuan this year. That includes tofu products in general, as well as shelf stable, chilled or frozen substitute meats.
“A key weakness with substitute products is their high price,” the firm said in a research note. “That hinders their mainstream application and makes the sector more vulnerable to economic turbulence.”
According to a Mintel survey of 3,000 domestic consumers, 74 percent said they have heard about meat substitutes and are willing to try plant-based protein products.
Some 54 percent said they would consider lab-grown meat.
Health and fitness are expected to be major factors in consumer choices in the coming year.
Adidas Runners is one of many online workout platforms offered by sports companies for people who prefer home training to gym sweat. The platform also offers guidance on nutrition and healthy living.
More companies are using digital channels that offer not only delivery of merchandise but also health tips.
Fitness and training-related content videos are being uploaded on sites like Bilibili and even fashion platforms such as Xiaohongshu (Red).
Another trend expected to expand next year is in the tea and beverage-drink sector. Fruit- or cheese-flavored drinks using freshly brewed tea bases to replace packaged tea drinks or tea powders have drawn long lines of consumers.
Sometimes buyers have to wait more than six hours to pick up orders.
A CBN Data report suggests that the new lines of drinks now comprise nearly a quarter of China’s 442-billion-yuan, tea-beverage market.
“Cheese bubble tea and other innovative tea drinks are proving to be an emerging and vibrant business model,” said Deputy Director Wang Hongtao of the China Chain Store & Franchise Association. “They are an effective link between traditional tea drinking and younger consumers.”
It’s the first sector to show a strong business recovery from coronavirus lockdowns, he added.
One popular example is Nayuki’s Tea, a rising ready-to-make tea-beverage company.
Shenzhen-based Nayuki seeks to expand its market reach with larger stores that include space for coffee, bakeries and packaged desserts. Two flagship stores opened in November.
Over half of shoppers at Nayuki’s Tea are placing orders from online sites for delivery or in-store pickup.
Chief Technology Officer He Gang said the company is adding more digital features such as online orders in WeChat discussion groups, when coworkers and friends are meeting for afternoon drinks.
The company has also added potato chips, biscuits, teabags and sparkling drinks for sale at supermarkets and online stores.
Some teahouses are expanding new product lines in the battle for consumer spending.
“There’s been a pickup in the speed of launching new drink flavors in the past two years,” said Hosen Capital Founding Partner Zhang Tianli.
He cautioned, however, that teahouses seeking to move into packaged foods need to do a thorough evaluation of supply-chain capabilities.
Amid China’s rising dispensable income, what were formerly considered discretionary spending, such as afternoon tea drinks, is rapidly becoming daily necessities. That trend is expected to continue in the coming year.
Wang Gejun, an independent industry observer and specialist in fresh-food retailing, cautioned that it is crucial for emerging brands to leverage big digital platforms but not rely on them.
“It’s important to develop digital expertise and a customer service system,” he noted.
Meanwhile, in another consumer trend likely to proliferate in 2021, e-commerce giants are offering membership plans that push private labels, or products made by third-party manufacturers and marketed under retail brand names.
Kantar Worldpanel said sales of private-label products in China have surged 25 percent in the first three quarters of this year, an exponential increase amid overall flat consumer-product sales.
“An economic downturn is usually a good opportunity for retailers to woo shoppers with private labels at lower prices, and they are more likely to promote and showcase these offerings in physical stores,” said Kantar Worldpanel China General Manager Jason Yu.
Alibaba’s Freshippo unveiled a membership store, at an annual fee of 258 yuan, in September to attract shoppers with reasonable prices for higher-quality products.
Sam’s Club, the membership-only warehouse retail arm of Walmart, said it will enhance quality and upgrade product packaging for about 700 types of private-label products under the Member’s Mark brand.
Out of 4,000-plus items available to Sam’s Club shoppers in China, private-label products contribute to nearly a third of total sales.
Sam’s Club, Walmart and JD.com-backed Dada Group have set up dispatch centers to deliver selected daily groceries and fresh food ordered online. Average daily orders have surged about 10-fold for since its initial establishment three years ago and the services now cover 22 domestic cities.