Chinese food-tech startups, including Nanjing-based Zhouzi Weilai and Beijing-based CellX, have successively announced new fundraising with the intention to speed up development and production, as the race to move meat alternatives from labs to plates is heating up.
Founded in 2019, Zhouzi Weilai, which means “Zhouzi Future” in Mandarin, raised RMB 20 million (USD 3.1 million) from MatrixPartners China. The startup is led by Professor Zhou Guanghong, who currently works at the College of Food Science and Technology of the Nanjing Agricultural University. It claims to be the first Chinese cell-based meat manufacturer. CellX, a company newly established in November, also secured an undisclosed amount of capital from its seed round.
Different from plant-based meat, which is made of plant-based ingredients that mimic the taste of meat—by firms like Impossible Foods, Beyond Meat, as well as China’s Zhenmeat, and Starfield—cell-based meat is produced by cultivating animal cells. Notable foreign companies in this niche include Memphis Meat, Meatable, Higher Steaks, and Mosa Meat. In January, Memphis Meat raised USD 161 million in financing from investors, including SoftBank Group, Norwest, and Singapore investment firm Temasek.
“The commercialization of plant-based meat is ahead of cell-cultured meat,” said Hu Liangyu, an analyst at ChemLinked, a Chinese FMCG market intelligence platform. “At present, there are already many western and Chinese plant-based products that landed here in China. But cultured meat is not available in the short term due to laws and regulations, technology hurdles, and high-cost,” Hu told KrASIA.
The production of cultured meat consists of two stages: cell cultivation and tissue engineering. The key technologies to achieve this include cell proliferation and differentiation, 3D scaffolding, and bioreactors. Currently, cultured meat can not be produced on a large scale.
In November, Singapore became the first country to approve the sale of cell-based meat. San Francisco-based chicken substitute manufacturer Eat Just will start to distribute cultured chicken in the city-state at the beginning of January.
“Whether from the consumer’s perspective or the degree of technological development, the domestic artificial meat market is still in a preliminary stage,” Hu said. “First, technically speaking, the simulation technology for producing ‘whole meat’ has not yet reached the level of large-scale industrialization, while for the technically mature minced meat products, due to the relatively low technical threshold, there are many producers out there, but the quality of the products is also uneven,” she explained.
Although China has a long tradition of eating ‘vegetarian’ food, such as vegetarian chicken, she believes that it is unlikely that consumers will replace real meat with plant-based meat in their daily lives in a short period of time. “Plant-based meat is only a novelty product that people buy as a trend, but it has not yet become a daily necessity,” said Hu.
Raising awareness among investors
Plant-based meat products are growing in popularity and alternative products have made it to the Burger King and Starbucks’ menus, thanks to an increasingly higher awareness of healthy diets. Food brands are now creating a buzz by releasing alternative meat products, raising the attractiveness of the sector for investors.
Per stats from research firm MarketsandMarkets, the plant-based meat products market is estimated to be valued at USD 4.3 billion in 2020. It is projected to reach USD 8.3 billion by 2025, recording a compound annual growth rate (CAGR) of 14% in terms of value, as vegan and flexitarian populations grow across the world. China’s “free from meat” industry will be worth USD 11.9 billion by 2023, research firm Euromonitor predicts.
“Artificial meat on the people’s plates may only be a matter of time,” Hu said. “It is possible that after ten years, artificial meat products will be popular, and the price is cheaper than traditional meat products. By then, real meat might be scarce instead.”