• Dao Foods

How Dao Foods Chooses the Companies it Works With

Updated: Nov 7, 2021


Dao Foods Entrepreneurs at Shenzhen Bootcamp 2020

The Chinese government has made no secret of its ambition to achieve protein self-sufficiency by 2050, from a food security perspective if nothing else. With a population of 1.4 billion people, China’s leaders have taken concrete steps in recent years to keep the population fed.


Part of this was on display last year when the country launched its Clean Plate campaign to discourage food waste, a problem that President Xi Jinping called "shocking and distressing." After all, it’s a sign of good hospitality in China to overorder food for your guests. But among other things, that practice can dent the country’s overall food security if left unchecked.


But that’s only one front in this fight. Plant-based and alternative proteins are another.


Once the government recognizes the positive impact that alternative proteins can bring to the environment and society, the sector is likely to get policy support in the future. Our goals are simply too aligned to overlook.


But it’s not only the government that we need to work with. The long-term success of alternative protein in China hinges on raising consumer awareness and acceptance, and that process won’t happen overnight. Mainstream consumer knowledge and adoption of new protein products are far from there yet, and there are no shortcuts. Only the right products from the right entrepreneurs can help win over consumers in China and that takes time.


It’s a marathon, not a sprint, and that fact has informed our investment thesis since the very beginning.


Our first cohort of companies was focused on plant-based protein companies, but the more recent second cohort is more diversified, including B2B companies encompassing fermentation and cell-based technologies, and other types of alternative protein startups. Still, we have a preference for certain types of companies while picking startups for each cohort, depending on how the alternative protein space is evolving. All the selected startups must place their priority on products and must also have robust technological capabilities or the strong will to develop such capabilities. Even while targeting business clients, they still need to assist their customers to create products desired by consumers, especially at the nascent stage of the sector.


After all, this market is all about the consumer and our founders need to understand that.


Take Cultured Decadence, for example. Our first cross-border startup, the company is working on cell-based lobster, making it a good fit for Asian markets at large where seafood is more popular. Lobster is already a high-end item, making the cell-based version more easily acceptable to consumers. What’s more, Cultured Decadence plans on collaborating with Chinese researchers and academic institutions for R&D and other operations, which will positively influence the China market. This kind of technology-based business model can serve as a strong example for other Chinese alternative protein entrepreneurs.


Our other Cohort Two companies include ShiShen Food Technology, which is tapping into the traditional Chinese medicine appeal of plant-based foods to Chinese mainstream consumers; Shanghai Protein, which upcycles byproducts from food processing into alternative protein products; Geb Impact Technology, creating alternative protein from fermented microalgae; and Blue Canopy, whose products are based on mycelium fermentation.


All different and unique in their approach to this market, but all with strong product offerings and the technologies to back them up.


That’s important because, in our view, disruptive products and technologies will be key to reaching the tipping point of mass adoption of alternative protein. It’s happened before. Think about the success of Apple’s iPhone. It was a disruptive invention from the outset, not an imitation of even the best phones available back then. That’s what we’re looking to support in alternative protein.