Talking Alternative Protein with Green Queen: A Chinese Perspective
Chris Kerr is the founder and chief investment officer of Unovis Asset Management, the shareholder and co-founding institution of Dao Foods. We share similar investment ideas and views on developing the new protein industry, even though they are focused on different geographies.
This recent Green Queen interview with Chris summarizes Unovis's investment philosophy and perspective in the alternative protein sector. Dao Foods believes that most of the views expressed by Chris in the interview apply to the China market as well.
We strongly suggest that readers pay particular attention to the following points referred to in the interview as they are very much relevant to the China market from an investment perspective.
In the food industry, the taste is king. Dao Foods believes that this is especially the case for Chinese mainstream consumers.
The food industry has low barriers to entry, so it needs persistent long-distance runners. Dao Foods always believes that developing the alternative protein sector is a long game in China.
In the long run, a company's valuation does not equal the company's value. As an impact investor, Dao Foods has sought impact from product sales and consumer buy-in rather than storytelling via slideware.
Investors in the alternative protein industry need not fear missing out (FOMO). There are many opportunities in this future-oriented market with huge potential, and investors do not need to be involved in every transaction to prove its success.
We love seeing the companies we invest in collaborating with one another. As the number of Dao Foods portfolio companies is expanding, we have been encouraging our portfolio companies to work with each other as feasible and collaborate with us to help build out a well-functioning eco-system for the whole sector.
In the alternative protein space, women are an essential driver for consumers to try new things—whether it is purchasing power, willingness to try something new or focus on health and well-being. More than half of Dao Foods entrepreneurs are women.
The future of plant-based seafood products is long but bright, and it is necessary to identify and choose the breakthrough product. High-end lobster meat would be a good breakthrough product for China and the rest of Asia, which explains why Dao Foods has invested in Cultured Decadence (cell-based lobster) and Lohas Foods (plant- and fermentation-based lobster meat).
Cell-based is the ultimate future of alternative proteins. Avoid short-term behavior and over-hype. Breakthroughs in engineering and manufacturing are far more critical than breakthroughs in science. The same is applicable in the China market, if not more so, especially given the complex regulatory and policy hurdles as Dao Foods foresees on the way. We expect, hope for, and try to engage entrepreneurs with a solid state-backed science background to join the game.
The media should reflect the industry situation as accurately as possible and should not overhype the development of this sector for click-through rate. Dao Foods has proactively worked with various Chinese media organizations to promote this sector rationally and healthily.