The business is an international partnership between Dao Ventures, Moonspire Social Ventures and New Crop Capital (NCC).
Dao Foods was founded by Tao Zhang of Dao Ventures, a Sino-US consortium of impact companies, and Albert Tseng of Canada-based consulting firm Moonspire Social Ventures.
Moonspire Social Ventures will supply business development support and capital in collaboration with NCC.
NCC is a private venture capital fund which has invested in clean and plant-based replacements for animal products, including the Bill Gates-backed Beyond Meat and Cargill-backed Memphis Meats.
The trio hope they can tempt consumers away from traditional livestock produce.
“With rapid rising incomes and increasing meat consumption in China, our aim is to introduce alternative products into the China market to reduce the consumer demand for animal products from the traditional livestock industry, which has had growing negative environmental, food safety and health impact,” said Albert Tseng, co-founder of Dao Foods and managing director of Moonspire Social Ventures.
The coalition was brought together by, and will continue to be assisted by, the Good Food Institute (GFI) – a US-based non-profit team of scientists, entrepreneurs and lawyers who focus on using food technology to transform systems away from factory-farmed animals and products.
“The goal is to increase the quantity and quality of plant-based meat, dairy, and eggs conveniently available to Chinese consumers,” added Emily Byrd, senior communications specialist at GFI.
The impact partnership
Canadian-based Dao Ventures says it has so far supported more than 1,000 Chinese and international SMEs and has made and facilitated over US$200m in impact investments. NCC has made investments in 16 companies in the alternative protein market worldwide.
The three founding parties plan to leverage their connections in North America and China, and Dao Ventures’ local Chinese infrastructure, in order to deliver alternative meat or protein products to the Chinese market.
China’s growing affluence has had a direct correlation to its rapidly rising meat consumption. China alone consumes more than one-quarter of the world’s meat. The country also produces and consumes half of the world’s pork.
Heavy demand means the country imports huge volumes of meat products.
By mid-2016, China’s National Health and Family Planning Council updated the country’s dietary guidelines and urged its population to cut its meat and egg consumption by nearly half, by 2030.
The average Chinese citizen consumes about 254g of meat and 142g of dairy and eggs per day. The health agency advised citizens to reduce consumption of fatty meat and eggs to just 200g per day.
Dao Foods will soon establish a China office to help expand its initiatives.
“While we may determine that Dao Foods should become a food company itself, we are not limited to a product-development model,” said Byrd.
“Dao Foods is structured such that it can be used to facilitate the distribution of pre-existing products into the Chinese market and provide capital and strategic assistance for mission-aligned start-ups launching in this market."
Support for alternative protein
Plant-based and clean meat alternatives not only help meet the demand for protein, they also aid in significantly reducing carbon emissions and ensuring food-related health and safety.
“It’s impossible to accurately postulate the potential resource-savings Dao Foods will enable, but the potential is as large as the resource use of the entire animal products industry,” said Byrd.
Plant-based and clean meat companies have drawn investments from multi-national firms in recent months.
Recently, Tyson Foods invested in plant protein company Beyond Meat as well as Memphis Meats, which produces beef, chicken and duck directly from animal cells without breeding, raising or slaughtering animals. Both are NCC portfolio companies.
Memphis Meats’ clean meat also has attracted investments from DFJ, Cargill, Gates and Virgin-founder Richard Branson.
We recently reported on New Zealand-based meat substitute producer Sunfed Meats being in the midst of a series A capital raise to increase production for global expansion. It has consistently sold out its Chicken Free Chicken product.
And in an exclusive interview with FoodNavigator-Asia, JUST (formerly Hampton Creek) revealed it will open its first manufacturing site in Asia this year. The vegan food firm also recently launched Just Scrambled — egg-free scrambled eggs.
According to Byrd, the Chinese government is currently “not explicitly supporting Dao Foods”.
She said the government recently launched a US$300m trade agreement between China and Israel, designed to cut emissions and, with the concentration of clean meat start-ups in Israel, many assume this trade deal could lead to the support of clean meat R&D in China.