Nestlé plans $100M plant-based manufacturing facility in China

27 May 2020

Swiss food giant Nestlé recently announced that it will invest 100 million Swiss francs ($103 million USD) to open a plant-based food manufacturing facility in the Tianjin Economic-Technological Development Area (TEDA), which is 72 miles outside of Beijing. The company said that the facility will also include significant capacity for the expansion of its Purina pet food line.

Plant-based protein is not just a phenomenon in the Europe and North America. According to data from Euromonitor International, the market for plant-based meat alternatives in China grew from $7.2 billion in 2014 to $9.7 billion in 2018 and is predicted to reach $11.9 billion in sales by 2023. “In recent years, the food sector has undergone a quiet revolution as people are choosing more and more healthy, nutritious, and environmentally friendly foods,” Nestlé said in a statement.

Nestlé plans $100M plant-based manufacturing facility in China
Image Courtesy of Nestlé

The Chinese food market is evolving rapidly. A 2018 outbreak of African swine flu reduced the country's domestic pig stock by 20%, according to Nikkei Asian Review. This steep drop coupled with the supply chain disruption caused by coronavirus is contributing to this growing interest in meat alternatives.

With compounding reasons continuing to drive the rising interest in meatless meat, Nestlé is not the first multinational conglomerate to capitalize on this growing trend. Cargill partnered with Yum China – the parent company of KFC – to test the reception of meat-free chicken nuggets in Chinese KFC locations. Following this trial, the agricultural giant said it plans to launch a line of plant-based products in China this June.

Yet other global giants are stepping into the plant-based meat realm. Starbucks is collaborating with Beyond Meat to introduce a plant-based menu to its locations in China. Beyond Meat's rival, Impossible Foods, also entered the market last November when it debuted at an event in Shanghai.

Even Chinese companies are beginning to invest in the space. The Alibaba group teamed up with OmniPork – an alternative pork product from Hong Kong-based Green Monday – and Yum China to sell pork-alternative products at Taco Bells in the country.

Already there is stiff competition in the Chinese market, so it is critical that Nestlé accelerates its entrance into the market in order to earn a slice of the pie. Nestlé, which has 31 other production facilities in the country, will begin pumping out meat substitutes by the end of the year.