“How many people are vegetarian here?”
The question, posed on Friday at a panel on the topic of sustainability at Fortune’s Global Tech Forum in Guangzhou, elicited a single raised hand in the crowded room. Ripples of sheepish laughter followed from the meat-eating majority of the audience.
The moment illustrated the challenge facing entrepreneurs trying to market plant-based meat alternatives to the Chinese market.
China consumes more meat than any other single country. It accounts for a quarter of global meat consumption and half of all global pork consumption, an ominous stat as African swine fever ravages the country’s pork production capabilities.
Now, as the environmental costs of meat-eating have revealed themselves and plant-based alternatives like Impossible Foods and Beyond Meat are gaining mainstream popularity, some entrepreneurs are looking to convince China’s consumers to make the switch from animal to plant.
“China already has a long history of plant-based food,” says impact investor and entrepreneur Tao Zhang, pointing to the imitation meats—made from tofu, soybeans, or mushrooms—that have long existed in Buddhist vegetarian communities in China.
Tao founded Dao Ventures, a consortium of investing entities that fund environmentally-focused small and medium enterprises in China.
He also founded Dao Foods International, a maker of plant-based meat products, in hopes of reducing the environmental burden of China’s livestock industry by attracting meat eaters with high-quality, tasty products.
Before launching Dao Foods, Tao says he conducted a year’s worth of feasibility studies to learn how to approach the market.
The challenge, Tao says, is how to “mainstream” such products and sell them to meat-eaters. “The right pathway, as far as we can tell, is to nurture and identify the right entrepreneurs to do that,” Tao says, noting that the plant-based mock meat industry is still a nascent sector in China, and such entrepreneurs are “few and far between.”
For impact investors looking for new projects to fund in China, being innovative or environmentally-conscious isn’t enough—the product must be able to succeed.
“The question always surrounding green investment is can you make something sustainable, not only environmentally, but also commercially?” says Bai Bo, vice chairman fo the board and CEO of the U.S.-China Green Fund, an impact investment firm.
The U.S.-China Green Fund has invested over $500 million dollars in the last three years, mostly in China. “We’re looking for game-changing companies.” Bai says.
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