Market & Trends

Chinese Alt Protein Sector Could See “Pivotal Chapter” in 2024

This article was compiled with insights from Rouyu Wu, Director of Innovation and Investment at Dao Foods.

2024 looks set to be a pivotal year for the Chinese alt protein sector, with companies facing a combination of challenges and opportunities. Here, we take a look at some of the most significant trends predicted for the months ahead.

Regulatory approval

There are indications that China’s National Health Commission may be speeding up its regulatory approval process; last year, it accepted applications for 22 novel food ingredients and issued solicitation drafts for 17 new ingredients. Two of the submitted applications were accepted the same year, suggesting an accelerated review speed.

Approved ingredients included nutmeg protein, yeast protein, and fermentation-derived Human Milk Oligosaccharides (HMOs) for use in infant formulas. This is encouraging for the alt protein sector; however, proteins made from fermented King Oyster mycelium and Fusarium venicelis (a fungus similar to that used by Quorn) were rejected.

the Chinese startup will launch the 70/30 Mycelium Research Lab, located within a renowned biotech startup incubator,
© 70/30 Food Tech

No cultivated meat company has yet applied for regulatory approval in China, but the National Health Commission has reportedly carried out research and preparation work regarding the safety of cultivated meat. This seems to indicate that the government is at least considering approving cultivated products.

Functional foods

Functional foods are trending in China, with sales continuing to rise. Research from the China Nutrition and Health Food Blue Book indicates that the country’s nutritional and health food industry reached 588.5 billion yuan ($82.63 billion) in 2022, and is expected to surpass 800 billion yuan by 2027.

Alternative proteins and plant-based ingredients are increasingly associated with health, and could be used in functional drinks, snacks, and ready meals. Furthermore, alternative protein producers could consider adding functional ingredients to their products to differentiate themselves from other brands.

peanut-based pulled chicken
Peanut-based pulled chicken. Image courtesy of Haofood

Clean labels

Recent studies indicate that processed foods are not always less healthy than unprocessed ones — for example, plant-based meat alternatives may be lower in saturated fat and cholesterol than conventional meat. However, many consumers — in China and worldwide — still have a preference for ingredient labels that are short and easy to understand. Consequently, many alt protein companies are working to address this by launching clean-label products with no additives.

Consolidation

2023 saw numerous political and economic challenges, including high interest rates and decreased investor confidence. This has affected many industries, including alternative proteins. Some early-stage Chinese companies in the sector have been unable to overcome these difficulties, while a number of established international brands have temporarily pulled out of China or delayed their plans to expand into the country.

In the coming year, Chinese alternative protein companies may need to cut costs, improve efficiency, and possibly seek government grants or subsidies. More consolidation is likely to occur in the meantime, with only the companies that truly meet consumer demand expected to survive.

© Beyond Meat

However, there are some positive signs internationally, such as the huge $58 million Series B funding round recently closed by Germany’s Infinite Roots. This apparent resurgence in investor interest in the plant-based market may ultimately benefit Chinese companies.

Government policies

China’s 14th Five-Year Plan for Bioeconomy Development emphasizes biotech-driven food technology as a future priority, and the country is expected to play a key role in the alternative protein industry — both domestically and on a global scale. It is hoped that the Chinese government will soon issue policies that support the industry, following in the footsteps of European countries such as Denmark and the UK.

“As we usher in the auspicious Year of the Dragon, 2024 is shaping up to be a pivotal chapter for the alternative protein industry, filled with determination for repositioning, innovation, and commercialization,” said Rouyu Wu. “Amidst China’s ongoing macroeconomic challenges, the nation’s alternative protein sector demonstrates a nuanced interplay of positive and negative trends.”

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