Huiyi Lin is the founder and Chief Insights Officer of Asymmetrics Research in Beijing. She has 15 years of experience in market research and previously led global research groups, Kynetec and Grail Insights, in market research in the consumer products, healthcare, technology, agriculture, and animal health industries. Separately, Lin’s art forms part of the permanent collections of the Museum of Contemporary Photography in Chicago and the China Central Academy of Fine Arts Museum in Beijing and has been featured in exhibitions in Thailand, Singapore, China, Myanmar, France, and the United States. Originally from Singapore, she earned her Bachelor of Science in Economics from the National University of Singapore and her MBA from Tsinghua University and MIT. Lin is also a mentor for Young China Watchers in Beijing.
The following interview focuses on Lin’s research with Asymmetrics Research on the alternative protein (meat and dairy substitutes) market in China. It has been edited for length and clarity.
Young China Watchers (YCW): I want to start off by asking you about Asymmetrics Research’s newest report, “China Alternative Protein Products Market Landscape.” What led you to conduct research on alternative protein, and what is important to know about the state of alternative protein in China?
Huiyi Lin (HL): When we started Asymmetrics, one of the key focuses was on the food industry. I see the food industry as being very important to ensuring stability, given that China’s government policy is very focused on food security and food safety in the form of agricultural policy and consumer-related segments. These have been fundamentals in the government outlook for some time, but sustainability as it’s related to environment and carbon reduction goals has also come up as a core issue. These have also been emphasized in the whole government outlook for the country’s development going forward.
Alternative protein is an emerging innovative segment globally. The new trend probably came in from the U.S. and European markets, but China itself has had more than 1,000 years of history of eating alternative protein in the form of vegetarian food through soya-based and wheat gluten products which have been consumed by Chinese in traditional cuisine. It is part of the culture and is seen as a normal part of life here. What is different about what we’re seeing in the new 2.0 generation of proteins, whether in meat or milk categories, is that they use different base ingredients and enhance the flavor, texture and use as analogues to current meat and dairy alternatives. In some cases, [the companies] have come up with a new purpose and new way of using the products altogether and may not necessarily be replacing meat or dairy. This comes up with very exciting opportunities when looking at how agriculture will be made more sustainable.
YCW: How do you think plant-based meat, lab-grown meat, and other sources of alternative protein fit into the broader issues of food security, food safety, and sustainable food systems?
HL: These are all options for the Chinese consumer base and policymakers. [Policymakers and consumers] won’t rely on any one source to provide daily consumption. As a practical means, there is a need to diversify sources. At the same time, the agricultural sector is also going through a lot of changes because the way that it’s structured has [in the past] been more fragmented with a lot of smallholder farms. These are being phased out as the farmers grow older. For them to tend to one to two mou (0.165 to 0.33 acres) of land is very labor intensive. You don’t get the economics of scale and level of productivity, and the quality of produce is widely varied. So one shift is into larger scale farming, where quality can be controlled, sourcing is more stabilized and productivity increases. Then you are able to have a secure food bowl for the 1.4 billion people living in China.
Because of the pandemic, people also want to be more health conscious and have better immunity systems. Additionally, the Chinese diet has traditionally encompassed a variety of foods and tends to be more holistic through the incorporation of different nutrients.
YCW: With regards to plant-based meat, in July, the National Development and Reform Commission announced that it would encourage foreign investment in the plant-based meat industry. How do you expect this change could affect new market entrants and the industry overall?
HL: China has actually been building encouragement for foreign investment for a couple of years already. That’s why a player like Beyond is building its factory now and other players are coming in with product expertise, R&D, product development, and manufacturing capabilities.
In this industry, we are looking at bringing in new technologies to improve the taste, texture, etc. It is not enough to reintroduce the forms of products that have been produced overseas, such as those in the United States. Introducing a burger patty into China is not going to expand the market to its full potential because the product is not localized enough.
“It is not enough to reintroduce the forms of products that have been produced overseas, such as those in the United States.”
Regarding innovation in this industry, it will be a combination of bringing in good technology and being able to build a protein base formulation and introducing a lot of localization. This will occur first from the product form, such as in a more pre-prepared meal, as a dumpling for example. Innovation will be needed at the end-product stage but also within the technology itself. In this case, encouraging investment brings in good technology which improves the capability of the local industry. In the long-run, we will see better products based on more advanced technology in localized product capabilities.
YCW: Looking at lab-grown (cultured) meat, in 2017, China made a $300 million investment in Israeli cultured meat companies, and high-level Chinese officials have reportedly discussed the need for a national strategy related to cultured meat. How do you think countries like Israel and Singapore (being the first country to approve the sale of lab-grown meat) have influenced China’s motivations toward the adoption of cultured meat?
HL: The development of cultured meat in Israel and Singapore has increased alternative protein options in China. Food security is very much based on being able to diversify your food sources and being able to satisfy consumer needs for different types of food depending on their nutrient requirements and income status and so on. For cultured meat, there are different factors for why it makes sense for this to develop. With regards to China, it’s a balance of being at the forefront of technology and knowing how it works versus introducing it to your population where it comes up against other fronts such as consumption behavior or mindset issues. It drives up against very strong-held perceptions of where meat and protein should come from, and so the societal change should happen with a certain sensitivity of how to handle it and how to push it if it is the right thing to be done.
For China’s government policy, it’s always a balance of where the national interest should be, where the industry interests are, and who the industry stakeholders are that need to be involved in pushing for innovative changes in the industry. From the consumer side, it is a matter of population acceptance and how you change the narrative of where consumers go. I think there is a delicate balance, and [the industry] needs new technologies to prove itself before it will be accepted. For China, investment overseas is one thing, but being embraced by the local population is going to take time.
YCW: Your report mentioned several challenges to alternative protein companies, including brand familiarity, product access, price, taste, texture, and messaging. Beyond these challenges, what would you say are the most important considerations for start-ups or established protein companies looking to enter the Chinese alternative protein market?
HL: I think behind all of this is understanding the Chinese consumer. Understanding the Chinese consumer means we need to understand differences between consumer segments. China is a very big market. When we do market research, we are able to understand the different parts of the market, their behaviors and purchase processes, the triggers and occasions which make them try out something new, the factors that they are looking for when they evaluate their experiences, and future occasions for repurchase.
Different consumer segments will be looking for different things. For example, millennials may be more adventurous compared to families. They are going to purchase and be influenced through different channels. There may also be different motivations for eating something at breakfast and dinner time because the occasions differ. For market research, we try to pull things together for a more holistic understanding to target consumers in a strategic way.
“Different consumer segments will be looking for different things. For example, millennials may be more adventurous compared to families.”
YCW: You noted in your report that there is a high level of awareness of alternative protein among consumers. Do you expect that in the coming years, plant-based meat, cultured meat, or other types of alternative protein will become more widely available outside of China’s major cities? How do you predict that product offerings could change or expand?
HL: A clarification: traditional vegetarian products are available nationwide. They are cheap, nutritious, and very much a part of the traditional diet all across China. Then there are the 2.0 generation products, which have a better flavor, taste, and are more analogous to meat and dairy and have more exciting flavors and forms. For these products, I would say that awareness is pretty wide among urban consumers, especially in Tier 1 and Tier 2 cities. In Tier 3 cities, a larger part may have heard of some things but may not have had the occasion or channel to purchase such products. A lot of the actual consumption is still in the Tier 1 cities and a few Tier 2 cities.
I think meat alternative product availability will increase in the Tier 1 cities and Tier 2 cities. There is still more opportunity to develop in the urban setting, such as with distribution channels, price points, and the whole experience and performance of the product being delivered at the point of consumption. If we are able to expand the channels of distribution into B-to-B through restaurant services to be more accessible and introduced to consumers through the food service channels, plus being able to purchase it where you commonly buy food products, then it will expand outreach.
Secondly, right now a lot of the products are at a high premium because they are being produced at small scale. If we increase the volume, we will be able to bring down the price hopefully and the technology will become more mature. Then, at the back of consumers’ minds, they will compare the new 2.0 generation products, traditional vegetarian products, and meat or dairy products. Third, it will be important to improve the whole experience so that it becomes tasty and nutritious as a food in itself, whether or not it replaces meat or vegetarian food. It must be attractive and appealing and good for consumers, then it brings in value and has the health benefit that it promises to have for that category. With these, meat or dairy alternatives could expand beyond the current consumption level. We see the influx of new brands and products coming into the market, trying to push into these areas, and this will definitely help the growth.
-Interview by Madison Plaster