The Role of Community in China’s Alternative Protein Future

At Dao Foods, we like to say that we connect, we mentor and we invest. What does that mean? The investment side is straightforward -- as an impact-oriented investment firm we invest in plant-based and alternative protein companies based in mainland China and those focused on the Chinese market.

But our mandate is broader than that.

We seek to support entrepreneurs that can play a role in activating the Chinese consumer, serving not only as their investor but also their cheerleader and their value-added partner. That’s where mentorship and the network effect come in. And that ecosystem is starting to develop with more and more entrepreneurs not only starting companies but coming together to form the early basis of a Chinese alternative protein industry.

What we're trying to do is provide resources and a community hub for them to connect and meet potential international partners to help them get started and scale their businesses. Because other parts of the world have been down this road before. These international entrepreneurs know which plant proteins and which technologies are best suited to the products these companies are creating, whether it's fermentation, cell cultured meat, etc. There are a lot of resources and knowledge out there that are available internationally, so our goal is to consolidate that information so that our entrepreneurs can get a good start and build businesses that can support growing consumer desire to go more plant-based.

Case in point: The Dao Foods incubator.

Yes. we’re supporting early-stage entrepreneurs with startup capital and mentorship, but what we’re really doing is building a community where we can bring in a lot of other resources and mentors that we know through our networks both in the United States and Europe as well as within China. We essentially join each startup’s team for six months to help them get to the next level where they can raise more capital and introduce even more products to consumers. The end goal is to support the development of interesting products, whether that’s plant-based meat, plant-based seafood, cell-based products, fermentation derived proteins and more. These are all components of the ecosystem that needs to be built within the Chinese market.

Over the next three years we hope to support over 30 companies and create an army of alternative protein entrepreneurs who are testing many different approaches to the Chinese market with different products, different marketing approaches and different ways to engage consumers. We want to collectively learn how the Chinese consumer, particularly young millennial consumers, responds to the idea of alternative protein and how overall dietary patterns in China are evolving.

Because health matters to everyone, no matter where they live.

It’s not unique to China or Europe or anywhere else. Clearly consumers are seeking healthier products for themselves and their families. The difference is we have this notion of the flexitarian consumer in the United States and Europe, along with several decades of groups like PETA and the Humane Society promoting the message that the way we treat animals matters and that there is a better way forward.

In China it has been the opposite. Rather than this advocacy around potentially eating less animal protein, the message in China for the last few decades has been around increasing animal protein. Traditionally the belief has been that animal protein is the best, most nutritious source of protein and as China’s economic prospects have grown so too have demands from its people to eat more protein. It just makes sense.

So, now when you put an alternative protein product in front of that kind of consumer they're not thinking about why they should consider trying this alternative product. They're thinking, why would I? I already have access to what I need and what in animal protein.

That’s why we believe that the health implications around all of this is actually a stronger portion of the decision matrix for why someone would choose alternative protein among Chinese consumers than those in the rest of the world. It’s up to entrepreneurs to do this research and learn more about buyers and tastes in China in order to lift all boats. Then they can create the products that people want to buy and position them in ways that actually get attention.