Nestlé to Open $100 Billion Plant-Based Plant in China, a Sign of the Times
Nestlé, the Swiss-based multinational food and drink giant, just announced plans to build a plant-based food plant in China, as demand for meat alternatives grows. Sales of plant-based meat in China increased from $7.2 billion in 2014 to $9.7 billion in 2018, according to Euromonitor International. Now Nestlé will spend $100 million to build its first plant there, just 72 miles from Beijing.
While the US, UK and Canada have been hotspots for vegan eating and burgeoning plant-based startups, China is one of the markets with the biggest consumer potential. The country is the most populous in the world, home to nearly 1.4 billion people, with research showing that the Chinese food market is rapidly evolving as consumers seek more healthful and meatless options.
The vegan food market was expected to rise in China over 17% from 2015 to 2020. One catalyst that might be helping fuel the market now is the current pandemic and science revealing that the coronavirus emerged from a live animal market (“wet market”) in Wuhan, China. The continued emergence of zoonotic diseases—several of which have originated from China—are causing people to rethink what they eat.
The latest news about Nestlé's investment validates a burgeoning plant-based food market in China that is shifting toward plant-based choices in the wake of the COVID-19 pandemic.
“In recent years, the food sector has undergone a quiet revolution as people are choosing more and more healthy, nutritious, and environmentally friendly foods,” Nestlé said in a press release announcing the new China-based facility. The factory is set to open in China’s Tianjin Economic-Technological Development Area (TEDA).
This is not Nestlé’s first foray into the plant-food space. In 2017 they acquired Sweet Earth, the then 350-person company based in California. Nowadays, Sweet Earth is the home of Nestlé's Plant-Based Protein Center of Excellence, and its anchor into alternative meats. Since, they have launched the Awesome Burger and a number of other products to rival alt-meat leaders like Impossible Foods and Beyond Meat.
Nestlé is not the only conglomerate making big bets on the plant-based food space. North American agriculture giant Cargill has plans to launch a line of plant-based products in China in June. This is on the heels of trialing its vegan chicken nuggets at various KFC’s in the region.
Another powerhouse to recognize the growing demand in China is Starbucks, the world’s largest coffee chain. They announced last month a partnership with plant-based industry captains including Beyond Meat, Omnipork and Oatly to bring a plant-based menu called GOOD GOOD to China. (Starbuck is also testing a Beyond Meat breakfast sandwich in Canada that will hopefully make its way to the US soon.)
There are dedicated plant-based food startups expanding from their US roots and entering China. Alpha Foods, a maker of frozen packaged goods like plant-based burritos and nuggets picked up distribution in Hong Kong last year. Their strategy seems to be working; shortly after their entrance in the China market they landed a $28 million investment round. In early 2019, JUST was the first US-based food tech startup to enter the China market. The popular JUST Egg product is available online and in retail stores across the country.
As Nestlé continues its expansion, now with eyes locked on the plant-based consumer segment in China, it may need to revisit its other practices. Vegans and plant-based eaters with a watchful eye on corporate malfeasance might choose not to support Nestlé’s products—even though now some are plant-based—since it has some questionable ethical issues and practices. Still, a massive conglomerate dedicating an entire production facility to plant-based food in China is good news and a step in the right direction.