‘Very different markets’: China’s immense protein needs continue to propel plant-based dairy demand – experts

04-Jun-2024 - Last updated on 04-Jun-2024 at 01:19 GMT

China’s large population and enormous protein requirements has given the local plant-based dairy sector room to continue to grow. ©Getty Images

Related tags China plant-based

China’s large population and enormous protein requirements has given the local plant-based dairy sector room to continue to grow in a ‘very different’ way from plant-based meat, according to local industry leader Yeyo.

Just like the rest of the Asia Pacific region, the plant-based meat market in China has been seeing a downturn due to various reasons from pricing to consumer demand, but this has not been the case when it comes to plant-based dairy.

“Plant-based dairy and plant-based meats are two very different markets, especially here in China [where meat consumption] has a strong cultural context,” coconut yoghurt pioneering brand Yeyo Co-Founder and CEO Christiana Zhu told FoodNavigator-Asia.

“We have seen plant-based meat here hit a down trend, and in China this can also be linked to factors such as the market still dealing with COVID-19 hangover and having opened up the market later, but for plant-based dairy, we are still seeing growth as the peak has not been hit here.

“One of the biggest players in China, which is Oatly with its oat milk products, also expressed being less than happy with its growth in the past year as it was not at the rate that they had hoped for – but even so, they still demonstrated growth and confidence that this is continuing.

“So we can see that even with China’s recovery being somewhat delayed by the economic factors, plant-based dairy is still holding its own and progressing, so when things are more stable and overall economic growth returns, it is highly likely to continue being in a good if not better place.”

She stressed that plant-based meat currently needs better marketing and positioning to return to growth – a revamp of sorts to stabilise the industry’s development instead of the previous ‘launch frenzy’.

“When the plant-based meat trend hit, there was a rush by companies everywhere globally to put out new products and boost their position in the market – but this is not a suitable one long-term,” she said.

“What it needs now is a repositioning to get back on track, and in China in particular, industry will need even more patience in terms of things like acceptance and regulatory positioning and so on as this sort of progress tends to move more conservatively here.”

Population protein drive

Zhu also highlighted that China’s huge protein requirements will remain a strong factor driving the plant-based dairy sector, especially with dairy in general having achieved a strong positioning in the country as an important protein source, a position that was cemented via government and industry efforts.

“We all know that in China food security is the absolute number one priority, with New Protein (alternative protein) to play an important role as mentioned by President Xi in the latest national five-year plan,” she said.

“The protein needs are only going to keep growing and getting higher, so production will just need to be more efficient simply due to the size of the country’s population.

“So even though we know factors such as sustainability from an animal ethics or deforestation point-of-view are not as big a driver in this market compared to the west, there is a strong carbon neutrality focus here, which further drives the opportunities for New Protein.”