How Chinese consumers are feeling about plant-based foods in 2024, and what we can learn from it

In 2022 it seemed like the stars had aligned for plant-based proteins to take over China. Younger Chinese consumers were increasingly talking about sustainability and animal welfare, Covid had made almost anything perceived as healthy outpace wider categories, and funding was sloshing around China in the consumer space seeing investments in alternative protein companies grow 533% in 2022 from a year earlier.

On top of that the Chinese market didn’t appear to need much education into the benefits of plant-based protein. Chinese have been enjoying it for years, such as soy bean-derived tofu and soy milk which is believed to have originated during the Han Dynasty around two thousand years earlier. Veganism also has deep roots in Chinese philosophy and religion including Taoism, Buddhism and Confucianism.

Impossible Foods was showing off soy-based dumplings at CIIE, and Starbucks and most other fast food chains were launching Beyond Meat and similar offerings. It seemed like plant-based products were going to take over China and the rest of the world.

And then they didn’t.

Whereas it’s much harder to find a plant-based burger or meat skewer now than the halcyon days leading up to 2022, plant-based dairy products have fared better.

The category has benefitted largely from a broad acceptance of plant-based drinks. The demand for low-calorie, low-fat, high-fibre, lactose intolerance-friendly and zero-cholesterol products have brought more widespread appeal than meat alternatives. Chinese consumers have also traditionally been skeptical of GMO in their food and GMO-providers like Impossible Foods were always fighting against entrenched consumer values in addition to the regulators. Plant-based drinks have far fewer hurdles to appear ‘natural’ to consumers.

The rise of plant-based drinks has also been heavily influenced by social media trends, with the coconut milk category exploding after one brand launched some risqué content, and further after Luckin Coffee launched a Coconut Latté product which led to many brands attempting to copy or come up with their own combinations.

Despite the hype, over the past two years plant-based dairy sales have dropped 9.6% on Alibaba platforms – falling over three times faster than the overall dairy category based on data from our Dairy Tracker. Plant-based beverages accounted for just 3.9% of the total dairy category in Q1 this year. The shift to social commerce and return of bricks & mortar has impacted sales on traditional ecommerce platforms, but the overall trajectory means that dairy farmers should still be able to feed their families for the foreseeable future.

Of the plant-based protein beverages, coconut, oat and soy milk are the largest categories by revenue, yet oat milk, alongside walnut and almond milks, commands the highest premium - close to ¥70 ($9.70) average unit price per sale. Coconut milk accounts for the largest number of units by far, but the average sales price is just ¥38 ($5.27), 58% of the price of oat milk.

Much like oat and coconut milk got their big breaks by tapping into the progressive and open-minded consumers through China’s café and coffee culture, rice milk now looks to be following a similar path. Although still small-fry versus coconut, oat, soy, almond and walnut by revenue, rice milk looks to be the next big plant-based dairy alternative. The familiarity and versatility of rice, combined with big health claims has seen a myriad of rice milk infused products released. Subsequently, our Tracker data has seen 33% growth in rice milk over the past two years, versus drops across the bigger varieties.

There are some interesting lessons from the plant-based dairy category for all dairy brands, and other categories. We have captured many in our latest Plant-Based Dairy China Market report. You can get it here.

Overall, the plant-based protein categories provide some insights into how sustainability and health shapes decision making. When they were new, novel and trendy, plant-based beverages were flying off the shelves and screens. But now the buzz has faded, it appears that the environmental and wellbeing features don’t pack enough pulling power versus the taste and/or wholefoods nature of traditional dairy products for many consumers.

It also serves as a good reminder for more idealistic Western brands that even though sustainable features are increasingly attractive to consumers, they must be underpinned by core claims such as those relating to safety or function. As an example - in one recent China Skinny consumer study for an F&B product, endorsement from a local regulatory body grew purchase intent more than an ‘organic’ designation. Contact China Skinny to discuss how you can ensure that you are focusing on the right things for Chinese consumers.