Why China’s consumers found the hype around plant-based meat hard to swallow

From scmp.com

By Luna Sunin Beijing

The closure of Beyond Meat’s China business, despite heavy financing and marketing, underscores challenges that scuppered many vegan meat firms 

Only a few years ago, the notion that Beyond Meat – the former poster child of the plant-based meat industry – would shut down its operations in China seemed unthinkable. At the height of the brand’s popularity, its label could be found adorning heavily promoted products at restaurants and grocery stores across major cities.

Many observers speculated that the alternative meat company and others like it had found the next great success story in the country’s rapidly evolving consumer market.

But barely three years after launching its direct-to-consumer channels in 2022, Beyond Meat announced in February that it would suspend its China business. Its online stores were closed last month, and it has laid off most of its employees and halted production at its factory in Jiaxing, Zhejiang province, according to media reports.

The American company, which received backing from Microsoft co-founder Bill Gates and a host of celebrity investors in its early years, entered China to great fanfare in 2020, sealing partnerships with Starbucks, KFC, Pizza Hut and retailers such as Sam’s Club and Costco.

Its plant-based meat – made from ingredients like soy, peas or wheat and mimicking the taste, texture and appearance of animal flesh – was, for a time, ubiquitous. But the craze ultimately proved to be short-lived.

Gu Shuyu, from the Tractus Asia management consultancy, said China’s vegan meat bust was ultimately not an issue of price, taste or technology; the product, he contended, never had a real, sustainable use case.

Many Chinese plant-based meat brands and products that were buoyed by early hype have faltered, including Hey Maet, a start-up based in Shanghai that shut down in 2023.

Along the way, plant-based meat offerings from major food companies have quietly vanished from store shelves.

"Concerns over nutrition and food safety ... make it difficult for plant-based products to sustain repeat purchases" - Zhu Danpeng, Guangdong Food Safety Promotion Association

“Chinese consumers do not feel meat needs to be replaced,” Gu said. “As a result, plant-based meat does not solve scarcity, safety or ethical concerns; instead, it functions more like a ‘curiosity product’ – high willingness to try, but extremely low repurchase.

“More critically, it struggles to fit into Chinese cooking culture: it performs poorly in stir-frying, braising, stewing and other everyday techniques. This keeps it detached from home kitchens and daily meals, limiting its usage to gyms, cafes, convenience stores and other highly functional niches.”

Scores of plant-based meat start-ups emerged in China between 2019 and 2020 as traditional food firms began rolling out vegan products. Capital poured into the sector.

Several rounds of funding saw emerging brands such as PaoDing ZaoRou and GuRou secure tens of millions of yuan, with another brand, Starfield, attracting over 100 million yuan (US$14.1 million).

But consumers were less enthusiastic. Beyond Meat’s products were more expensive than those of domestic plant-based meat brands, and in some cases cost more than fresh beef. Meanwhile, many diners complained that plant-based meat fell short of traditional fare in terms of texture.

The result was a wave of disappointing launches and a lack of repeat business.

Several brands rushed to market before their formulations were fully mature, burning cash on marketing instead of building the technology needed to win local palates, said food industry analyst Zhu Danpeng, vice-president of the Guangdong Food Safety Promotion Association.

“Concerns over nutrition and food safety, combined with a texture that still falls short of real meat, make it difficult for plant-based products to sustain repeat purchases,” Zhu said.

Beyond Meat has struggled for years, with its global revenues falling from US$419 million in 2022 to US$326 million in 2024 – and cumulative losses reaching US$864 million.

In the first three quarters of this year, revenue fell nearly 15 per cent year on year to US$214 million, while net losses widened by 68 per cent year on year to US$193 million.

Its share price, which peaked at more than US$239 in July 2019, was just US$1.29 on Tuesday.

Analysts said a mismatch between American and Chinese consumer motivations further complicated the market. While American buyers tended to emphasise sustainability, animal welfare or personal health, Chinese consumers cared most about taste and culinary compatibility.

But some observers cautioned against reading the collapse of Beyond Meat as the death of the entire product category in China, saying that standard-setting, consumer education and more research and development could eventually reshape the sector’s trajectory.

“The companies with a real future will be those that not only solve taste, cost and cooking compatibility, but also create clear use cases, drive repeat purchases and build strong brand equity – all through localised innovation,” Gu said.

She added that success in China’s plant-based meat market would require products adapted to local cooking styles and eating habits, naming their use in stir-frying, hotpot and dumpling fillings as examples.

https://www.scmp.com/economy/china-economy/article/3335365/why-chinas-consumers-found-hype-around-plant-based-meat-hard-swallow