Dao Foods: 2024 Year in Review

According to the traditional Chinese calendar, the year 2024 marked the beginning of a dynamic 20-year cycle—Period 9 (九紫离火运) —a phase characterized by rapid transformation and evolving possibilities. As the second year of this new era, 2025—the Year of the Snake—plays a pivotal role in bridging the past and the future, where the challenges of yesterday intersect with the opportunities of tomorrow.

Much like a snake shedding its skin, this year presents a strategic reset—an opportunity for businesses to discard outdated models, adapt to shifting market dynamics, and position themselves for sustainable growth.

Before reviewing Dao Foods’ work in 2024, it may be helpful to understand the recent protein landscape in China. According to the latest data from the United Nations Food and Agriculture Organization (FAO), China overtook the US in 2021 in per capita protein consumption, reaching a daily supply of 124.61 grams (4.39oz) of protein per capita. In the same year, Americans consumed 124.33 grams (4.38oz) while Japan's daily protein supply per capita was 91.99 grams (3.24oz).

However, while a large portion of protein consumption in the United States is from animal products, the majority of China’s current protein consumption is from vegetable sources, which is aligned with what Dao Foods has always been sharing with international stakeholders, i.e. China has a long history with plant-based food of all sorts. That said, the dietary patterns of China continue to change (as shown by the charts from 1996 and 2021 below), with rapidly increasing animal protein consumption, especially in the seafood and poultry categories. These two factors, historical legacy and current trajectory, certainly make what needs to be done and can realistically be done in China more nuanced, compared with the US and Western European markets.

With this protein consumption context as the backdrop, we consider the culinary trajectory of China and what levers can be pulled in order to create a more sustainable food future without dependence on further scale up of industrial animal agriculture. We continue to believe that new and alternative proteins can have an impact on this trajectory, but the types of products and positioning will likely be quite different than in the West. Instead of direct “Center of Plate” alternatives to meat and dairy that are popular abroad, Chinese entrepreneurs are introducing novel products such as flour infused with protein rich mycelium , such that protein, nutrients, taste and function are directly embedded into popular products like traditional buns and dumplings. As stated earlier, throughout history and even currently, the majority of protein consumed in China is from vegetable sources, so our hope is that entrepreneurs can create new ingredients and products that lean into that culinary history.

Dao Foods’ portfolio company, Zhong Gu Mycelium, offers protein-rich mycelium-infused flour.

There is no denying that the investment climate globally and in China has been difficult in 2024. Chinese startups have raised just US $26 billion in 2024, according to data provided to Axios by PitchBook. That's more than an 82% decline from the 2021 peak, and less than 50% of any year over the past decade. Venture capital investment in Chinese startups has significantly declined, as first detailed by the Financial Times, including both foreign investment from the U.S. and other western countries and RMB-denominated domestic funds. The overall decline in venture capital investments partly reflects the slowdown in the Chinese economy, which has been buffeted by the protracted Covid-19 lockdowns, the bursting of its property bubble and the stagnation of its equity markets. As bilateral tensions have risen, US-based investors have also largely pulled out. That said, in December, two Chinese authorities released measures aiming to guide central enterprises to utilize VC funds as a market-oriented tool, in a bid to create an industrial investment and financing system that meets the requirements of innovation and development and will expand the opening-up of VC investment by revising regulations and boosting accessibility for foreign investors.

Despite the challenges, resilient entrepreneurs are creative at finding ways to grow. For example, several companies in the Dao Foods portfolio have leveraged non-dilutive funding sources from local governments with economic development agendas to support promising companies.

Blue Canopy is a technology-driven venture that assists food companies and restaurants in creating tasty and nutritious alternative protein products by providing fermentation-based alternative protein ingredients. The company recently received a grant from the Gong Shu District in Hangzhou, the capital city of Zhejiang Province. This funding was prompted by matching investments from Dao Foods and Better Bites VC in a follow-on round, meeting the local government's key precondition to release the first of three batches of government funding.

Shanghai Protain focuses on upcycling soybean pulp (Okara) by-products into sustainable food and alternative protein ingredients. The company secured a grant from Jiaxing to establish a lab and team at the Yangtze Delta Region Institute of Tsinghua University, with whom Dao Foods has signed a strategic collaboration agreement for New Proteins.

At the end of the day, products need to excite and appeal to consumers. Here are a just a few short examples of the creativity that constantly impresses us.

Dao Foods’ portfolio company, Starfield, introduces its new crispy snacks.

Starfield Food Science and Technology - In 2024, Starfield launched a series of innovative new plant based products that don’t aim at directly replacing animal products, but rather increase the desire for traditional plant protein sources. These include Seaweed Tofu Snacks at Sam’s Club, and a series of six crispy snacks including Pea Crisps and Beetroot Crisps.

Zhong Gu Mycelium - our newest portfolio company with manufacturing facility in Inner Mongolia uses solid state fermentation to produce mycelium for a variety of food applications. They’ve recently released their own product which is infusing flour with mycelium, thus increasing the protein and nutritional value of flour for use in dumpling and buns.

Zero Limit - starting in Guangdong province, Zero Limit is now shipping plant-based bakery products all over China. This video shows the creativity and product development of their innovative vegan range of breads and cakes. Their revenue has increased 43% year on year and are seeking investment to triple sales in the next 2 years.

There are many more examples of exciting innovations from Dao Foods portfolio companies as well as others which we cover throughout the year in our newsletter and on our LinkedIn page.

To be successful in achieving our mission, we need to create a healthy entrepreneurial ecosystem surrounding these new protein entrepreneurs. As such, Dao Foods has continued to be active in 2024 with numerous ecosystem building events and activities across different regions of China, with the goal of engaging and catalyzing new stakeholders and introducing the opportunity of new proteins and sustainable foods.

Since its debut in Shanghai in 2019, Dao Foods’ flagship program, China Next-Gen Good Food Bootcamp, has provided a vital and unique platform for individuals and organizations within the alternative protein industry to establish connections and collaborate, thereby nurturing a dynamic and sustainable industry ecosystem.

In 2024, we elevated our efforts with the introduction of the China Multi-Region Alternative Proteins Initiative, extending our reach to stakeholders in regions/city clusters outside tier-one cities like Beijing and Shanghai. In 2024, Dao Foods held three Bootcamps, visiting two new cities—Zhengzhou in Henan Province and Jiaxing in Zhejiang Province — and making a second trip back to Shenzhen.

Zhengzhou, Henan

Dao Foods held the ninth China Next-Gen Good Food Bootcamp in Zhengzhou, capital city of Henan, in 2024. Tao Zhang, co-founder of Dao Foods, commented, “We chose Zhengzhou, Henan, for its rich agricultural production, which can support the launch of alternative protein products. Going forward, we aim to collaborate with food industry leaders in Henan to explore innovative applications for alternative proteins.”

As the third most populous province (over 104 million) in China and the second largest in livestock production, Henan plays a crucial role in the nation’s food industry. Dao Foods invited speakers from Henan Agricultural University, Muyuan Group (one of China’s largest pig farming enterprises), Joyvio (a leading agricultural company in China), and Huirong Fund (owned by the Henan government). Together, they shared recent research and investment insights on alternative proteins.

Shenzhen

In September 2024, we returned to Shenzhen for our 10th Bootcamp, focusing on synthetic biology and its potential to transform the food industry. Shenzhen’s reputation as a hub for technological innovation provided the perfect setting to explore how biomanufacturing and synthetic biology could drive the future of food. Partnering with the Synthetic Biology Network and the Guangdong Biotechnology Industrialization Promotion Council, we facilitated discussions on how synthetic biology can drive industry-wide change.

Jiaxing, Zhejiang

The 11th China Next-Gen Good Food Bootcamp marked our first-ever event in Jiaxing, Zhejiang. Jiaxing, strategically positioned along the historic Grand Canal, lies between Hangzhou and Shanghai and serves as a key hub within the Yangtze River Delta city cluster. This event included the signing of a strategic collaboration agreement with the Yangtze Delta Region Institute of Tsinghua University, focused on fostering alternative protein entrepreneurship. The Institute was initiated by Chinese President Xi Jinping when he was Party Secretary of Zhejiang Province.

Key participants included representatives from the National Center for Food Safety Risk Assessment, OATLY, Unilever, and other industry leaders. Discussions ranged from safety assessments and regulatory approval for alternative proteins to advancements in microalgae-based seafood alternatives.

Singapore

Dao Foods’ breakout session: Engaging the Untapped Potential of China’s Alternative Protein Sector and Entrepreneurship.

Dao Foods also brought its impact to the Asia-Pacific Agri-Food Innovation Summit in Singapore. Our breakout session, “Engaging the Untapped Potential of China’s Alternative Protein Sector and Entrepreneurship,” emphasized the tremendous opportunities within China’s alternative protein market, driven by strategic cross-border investments and innovation. Speakers from Enterprise Singapore, Proterra Investment Partners Asia, and Unovis Asset Management shared insights on how international investors and innovative companies with a long-term vision can benefit commercially from China’s growing market potential. Looking ahead, Dao Foods plans to deepen its collaborations in Singapore in 2025, with the objective of bringing in international technology and products that could contribute to the development of China’s alternative proteins sector.

Aside from the events mentioned above, Dao Foods actively organized and/or participated in over ten major industry events across China and the globe in 2024. From delivering keynote speeches to hosting high-profile forums, Dao Foods showcased its leadership at premier food conferences such as Hi & Fi China and FBIC, as well as global platforms like Accelerate 2050 in New York City, Food4Future in Spain, and HiConf in Seoul.

Building on this momentum, Dao Foods remains committed to fostering the alternative protein ecosystem. In 2025, we plan to explore new cities across China through collaboration with local governments and will revisit and follow up with cities where past events have received exceptional feedback to keep the momentum going. In addition, we believe that there is an extremely large untapped potential in cross border opportunities where International companies can leverage the vast manufacturing capabilities in China as well as the growing market.

As businesses navigate the complexities of 2025, Chinese culture offers a fitting metaphor for the year ahead. The Yin Wood of the Yi Si year embodies a softer, more adaptable force—one that flourishes through resilience and careful cultivation. Much like a young seedling pushing through tough soil, success in the coming year will demand patience, strategic fine-tuning, and a focus on sustainable growth.

With a clear focus on fostering innovation and collaboration, Dao Foods is committed to relentlessly driving the growth of a sustainable alternative protein ecosystem in China and beyond—paving the way for long-term impact and transformative change.

Happy Spring Festival! Wishing you a prosperous Year of the Snake.