Beyond Meat CEO Promises Fast Chinese Expansion, but Is It Realistic?
One of the company’s big advantages in the U.S. doesn’t matter much in China.
Rhian Hunt, The Motley Fool
Mar 19, 2020
With fear of the coronavirus heating up demand for plant-based meats in China, Beyond Meat (NASDAQ:BYND) is among the U.S.-based companies looking to seize profits with both hands from this massive market. CEO Ethan Brown describes this as a "time of hyper-growth" for his enterprise, and he plans for aggressive expansion in Asia this year, including launching Beyond Meat's first production plant in China. However, the company faces stiff competition from other major food corporations who also want a slice of the meat-free pie.
Is there a market for plant-based meat in China?
Chinese consumers are among the world's foremost meat-eaters in the early 21st century, devouring 140 pounds of meat per capita in 2018. While per capita consumption is lower than the United States, the size of the country's population boosts the total to the point where Chinese citizens consume twice as much meat as Americans overall, or 28% of the world's yearly meat consumption.
The vast majority of it was pork until the recent advent of "pig Ebola" prompted the Chinese to cull approximately 50% of their herd, or 25% of all domestic pigs on Earth. Chinese consumers clearly enjoy eating meat, raising the question of plant-based meat's viability in the market.
In fact, the prospects for meat substitutes appears fairly sunny in China. Long before the arrival of novel coronavirus COVID-19, the Chinese meat substitute market was nearly 50% larger than the American market, reaching $910 million in 2018 compared to the United States' $684 million in the same year. China's plant-based meat sales grew 14.2% in 2018, following similar low double-digit growth in the prior three years, according to The Good Food Institute.
The African Swine Fever Virus (ASFV) drove China's pork prices 70% higher in 2019, making plant-based pork or chicken potentially more affordable than actual meat. On top of that, coronavirus is also cutting into China's meat supply in multiple ways.
China's government officially banned selling wild animal meat in late February, affecting up to 20,000 farms. Fears of catching COVID-19 from any kind of meat, including domestic staples like pork and chicken, alongside more exotic fare, could also make the Chinese more willing to try pea protein or soy protein-based imitation meat.
Beyond Meat's plan ...
The Chinese market is not quite "hyper" ...