Eat Just bags $25M, gets Alibaba’s help to sell alternative protein in China
China is a notoriously difficult market for international startups to crack, but one company seems to have found the recipe for wooing the country’s picky consumers. Three years after Eat Just launched in China, the San Francisco-based company is ready to put more alternative protein products on Chinese people’s plates. Formerly Hampton Creek, Eat Just […]
China is a notoriously difficult market for international startups to crack, but one company seems to have found the recipe for wooing the country’s picky consumers. Three years after Eat Just launched in China, the San Francisco-based company is ready to put more alternative protein products on Chinese people’s plates.
Formerly Hampton Creek, Eat Just has secured $25 million and a strategic partnership from C2 Capital Partners, a private equity firm with Alibaba as its anchor investor. The tie-up with C2, according to Eat Just’s co-founder and CEO Josh Tetrick, will help the firm’s go-to-market strategies, sales, branding, consumer insights, hiring, and regulatory approach in China.
Specifically, the Californian company will benefit from Alibaba’s reservoir of consumer insight and its experience in building a team in China from the ground up, Tetrick told TechCrunch.
Eat Just has been around since 2011 and raised over $400 million from investors including Khosla Ventures and Hong Kong tycoon Li Ka-shing’s Horizon Ventures. After establishing a foothold for its plant-based eggs in the U.S. market, Eat Just ventured into China, the world’s biggest meat consumer.
“We will never be able to accomplish the goal of changing the world without China,” said Tetrick.
Getting the regulatory greenlight is key for any company entering a new market. Eat Just’s signature mung bean-based eggs are already available through Alibaba’s e-commerce platform. And it’s poised to file with Chinese regulators for its cultivated meat, which is made from real animal cells grown in a lab, “sometime this year,” according to the CEO.
The timing is ripe. China has set food security as a critical priority for its agricultural production. In its five-year economic plan for 2021-2025, the government encourages R&D on “cell-cultivated meat, synthesized egg cream, recombinant proteins” and other food production technologies.
Eat Just obtained permission to sell lab-grown meat in Singapore in late 2020 and the result there has been “wonderful” so far, said the founder.
China is a harder market to conquer. So far, Eat Just’s customers are mostly young, well-educated Chinese from affluent cities like Shanghai. They are harsh on taste and flavor — in a good way, which pushes the company to keep innovating, Tetrick said.
“It is widely accepted that the alternative protein sector can play an important role in achieving China’s goal of carbon peaking and neutralization,” said Steve Lin, C2’s managing partner. “These ESG [environmental, social, and governance] benefits resonate strongly with young Chinese consumers who are interested in trying innovative food with a good nutrition profile and align with their values.”
“As the plant-based market is still in an early stage of development, local and foreign companies are focused on consumer education and building awareness to scale the market opportunity,” he added.
China remains a minor contributor to Eat Just’s income, making up just 5% of its global sales. The American company is also confronting a raft of local alternative protein makers that have cropped up in China over the past few years. But Tetrick believes the firm’s real competitor is conventional eggs and meat, which are still cheaper than Eat Just’s products by a large margin.
“If we can’t make it cheaper, we are not going to win,” he said. To that end, the company would need to set up local production to reduce logistics costs, which account for a big chunk of its operational costs.
Localizing manufacturing in China is something in the cards for Eat Just. Other international players have chosen the same path — both oat milk maker Oatly and plant-based meat company Beyond have been running their own production plants in China.