By inking a deal to sell its plant-based egg patty in over 500 locations of China’s most popular quick-service restaurant, Eat Just, a San Francisco-based vegan food startup, signaled to all US restaurants that plant-based and healthy food options are a must-have for future restaurants.
While the immediate impact of the deal is distant, US restaurants stand to gain from the company’s expanded production and distribution. Utilizing economies of scale in this light is what allowed other plant-based behemoths to drop their prices during the COVID-19 pandemic to help local restaurants capitalize on the growing trend.
Eat Just said in a statement that the “addition of a plant-based egg at one of China’s most popular restaurants signals growing consumer excitement and business momentum for delicious, healthier and more sustainable foods.”
“We’ve witnessed the excitement consumers in China have for JUST Egg, all driven by a generational move to healthier, more sustainable foods. We’re grateful to partner with Dicos on this global plant-based protein milestone,” Eat Just co-founder and CEO Josh Tetrick said in a statement.
A Traditional Trend
Plant-based diets have a long history in China. Ancient teachings of Buddhist and Taoist monks require their followers to respect the life of rooted plants and vegetables and avoid foods like eggs and onions. Meanwhile, China’s government told its citizens to cut back on meat consumption in 2016, with the goal of cutting the nation’s consumption in half by 2030.
In modern times, the COVID-19 pandemic has accelerated demand for vegetarian, vegan, and plant-based options from restaurants all around the world. A report by TechCrunch found China’s modern middle-class urban dwellers “have also been embracing fake meat products as they respond to climate change.”
Against this backdrop, analysts often look to China as a gauge of market-ready products because the Chinese plant-based market is highly competitive. Qishan Foods is nearing its 30th year in operation while Hong Kong’s OmniPork and Alpha Foods serve customers across the border. A new startup, Zhenmeat, is developing a plant-based product that offers “authentic Chinese flavors: like deep-fried mock pork tenderloin.
Beyond Meat entered China’s market in April after supplying Starbucks’ plant-based menu. It debuted in over 200 stores in China’s largest cities. Within weeks, the company was also supplying local Taco Bell, KFC, and Pizza Hut outlets.
In 2018, Euromonitor found China’s “free from meat” market to be worth approximately $10 billion with a growth trajectory touching $12 billion by 2023.
For comparison, the US plant-based market hit $5 billion in sales in 2019, according to The Plant Based Food Association and The Good Food Institute (GFI).
Overall, global forecasts anticipate the plant-based market to reach $72 billion by 2027, with growth driven primarily by increasing sales across Europe and Asia.
Production + Distribution = Savings
A week after announcing its entry into the Chinese market, Eat Just named Singapore its production and distribution hub for plant-based eggs and cultured meats. This agreement affords the company a centralized location to make and distribute its products.
For businesses in the US, the increased production and distribution of Eat Just products could equal big savings from suppliers. Other plant-based companies have used similar economies of scale to great success.
Impossible Foods cut its prices twice since the pandemic began by focusing efforts on standardizing production and setting self-reported production records. Initial cuts totaled 15% for distributors and local businesses with “double-digit international price cuts” coming later in the year, the company said in a statement.
Meanwhile, demand for plant-based food continues to climb in the US. Globe Market Insights predicts the US plant-based food industry will grow to $14.15 billion by 2026, driven primarily by the rising adoption of veganism and health concerns.
Globe’s survey revealed customers want a more realistic plant-based meat product. The survey identified soy-crumble ground beef as the product experiencing the most growth over the next five years.
Eat Just says that it is focused on creating a more realistic chicken bearing the same muscle structure as a live animal within the next three years. Afterward, the company plans to culture the bones, wings, and cartilage of animal meat, too.
According to GFI, plant-based foods are a key driver of growth at grocery retailers nationwide, outpacing overall food growth by more than five times. As of March 2020, the total biennial growth was 29%, which has showed no signs of slowing since the pandemic began.
Restaurants of all shapes and sizes are embracing the trend as well. Gregorys Coffee in New York City recently added JUST Egg to its signature breakfast burrito with plans of expanding to other products at a later date. Dominos recently rolled out a vegan chicken pizza that’s available as a medium-thin crust.
Learning how to introduce plant-based items to your business could be the difference between staying open and shutting for good. To get your customers interested, try offering a plant-based option as a special. Or, ask a group of loyal customers to sample a plant-based dish. Be sure to post about any menu changes on your social media pages to alert your customers of new offerings.