Nick Cooney, Founder, Managing Partner at Lever VC
Consciousness for the environment and food safety is rising rapidly worldwide but is nowhere near as dramatically as in the Asia-Pacific region. According to insight from EY, consumer demands in Asia are changing, with health and sustainability being two of five dominant behavioral shifts reported in 2022.
The sector that finds itself at the intersection of this shift in behavior is the food and beverage space. As many consumers in Asia turn into COVID-19 anxiety “long haulers”, the health, safety, and sustainability of their food remain at the forefront. One panacea to the concerns of Asian consumers is becoming increasingly familiar in the region thanks to an increasing number of startups— plant-based alternative proteins.
Why alternative protein?
The benefits of alternative proteins for people, animals, and the planet are indisputable. On average, plant-based meat and dairy products have 100 percent less cholesterol, 38 percent less fat, and 68 percent less saturated fat than conventional meat and dairy products, according to research by the Good Food Institute. Data from the UN suggests that for every kilogram of animal protein replaced with plant-based protein, 100kg CO2eq of greenhouse gas emissions is prevented, 400m² of land is preserved, and over 55,000 litres of water is conserved. Alternative proteins also spare farm animals from serious suffering on intensive industrial farms.
Traditional meat substitutes like tofu, tempeh, seitan, and ‘mock meats’ made of vegetables, beans, nuts, and mushrooms are deeply ingrained in the region’s culinary landscape
Investment banks, including UBS and others, project that Asia will see exceptional growth in alternative protein consumption over the coming years for two key reasons— demographic tailwinds and historical familiarity with alternative protein products. Traditional meat substitutes like tofu, tempeh, seitan, and ‘mock meats’ made of vegetables, beans, nuts, and mushrooms are deeply ingrained in the region’s culinary landscape. The taste and texture of alternative protein and its ingredients have long been welcome on the plates of Asian consumers.
In addition, the millennials and Gen-Z’s of Asia – whom McKinsey finds will make up 50 percent of the Asian population are providing a tailwind for the uptake of alternative proteins by 2025. They are early adopters who are more health and environmentally conscious, better educated and connected to global trends, and more willing to spend money on food.
The value of alternative proteins has spurred the interest of governments across Asia, too. The Chinese government is providing grant funding to support the sector, Singapore became the first country in the world to approve cell-cultivated meat and has provided significant investment and financial incentives to start-ups, and South Korea has included advancing the alternative protein sector as part of its national plan.
This upswell of interest across the board has created a favorable environment for alternative protein entrepreneurs and start-ups in Asia to thrive. Investors in the region and around the world are taking note of the potential for the category in Asia, and as a result, support—both financial and operational‚ is flowing into the market.
While North American companies once monopolized global investment into the sector, last year, over $300 million was invested in alternative protein companies in the APAC region—nearly double the amount invested in 2020.
Investors like Lever Foundation Growth Fund, Good Start-up, BRINC, Better Bite Ventures, Big Idea Ventures, and others are fuelling the growth of the alternative protein sector in Asia, backing and supporting promising entrepreneurs and making it easier than ever for Asian start-ups to capitalize on the opportunity.
With food security topping the list of priorities in countries like Singapore and Malaysia, research by DuPont Nutrition & Biosciences suggests that demand for plant-based protein will surge by 200% in Thailand, and PwC reported that 40% of Indonesians are likely to go vegan or vegetarian – Southeast Asia is especially rife with opportunity.
Indonesian native, Astrid Prajogo, is a talented entrepreneur who found her place in the industry upon learning about Lever’s work promoting entrepreneurship in the alternative protein sector. She worked with the team to formulate a product, raise funds from other investors, build a team, and develop a supply chain. Prajogo says Lever’s support goes beyond simply investing; she credits Lever as the ‘shadow’ founding member of her new plant-based meat company–Haofood–in Shanghai.
MAD Foods is a Lever-backed company that is Singapore’s first alternative dairy food tech start-up. Launched just three years ago, MAD Foods’ cold brew plant-based coffee has built a global waiting list of stores across the Asia-Pacific region.
Driven by an understanding of her fellow Singaporeans, co-founder Angelique Teo says that MAD is making beverages that consumers not only want but need. She believes that MAD products help people consume coffee conveniently, healthily, and sustainably.
In Malaysia, Lever is supporting Nanka – local talent making the most of local produce. Kickstarted by a husband-and-wife duo, Nanka is set to make waves in Malaysia with the clever use of jackfruit; a high protein, the native ingredient that grows in abundance all year round.
The meatless Kingdom is the first Indonesian company in Lever’s portfolio with a key take on alternative protein in the region – localized alternative meat. They focus on developing products like rendang, gepuk, and dendeng to cater to the Indonesian market.
“It was an incredible experience what we went through with Lever during the investment process,” says Meatless Kingdom founder Widyau Putra. “The most important thing, it was not just about investment, but we also learned a lot about the alternative protein space and connected to Lever’s network.”
While the Asian market is still nascent, there’s no better time than now for entrepreneurs to take full advantage of the abundant resources available and the opportunity to shape the future of food.
