Vegans and vegetarians rejoiced throughout the 2010s as food scientists got better and better at engineering plant and fungi-based proteins to mimic the texture, taste, and look of meat. Tests showed that even some meat enthusiasts couldn’t tell the difference. By the end of the decade, “fake meat” was booming. Burger King added it to the menu. Investment in the sector topped out at $5.6 billion in 2021.
Those heady days are now over — at least in the U.S. Secretary of Health and Human Services Robert F. Kennedy, Jr. champions a “carnivore diet,” price-conscious Americans are prioritizing affordable calories, and many consumers insist the real thing still simply tastes better. Investment in alternative proteins has fallen each year since 2021, with the industry raising a comparably meager $881 million in 2025.
In China, however, the industry is just starting to pick up steam. Early-stage startups have been popping up ever since the country’s Ministry of Agriculture and Rural Affairs included “future foods” such as lab-grown meat and plant-based eggs in its 2021 – 2025 five-year plan, indicating that these modern proteins will play a role in helping to secure the country’s domestic food supply chain.
“26% of the world’s meat is consumed by China, and about 50% of the world’s seafood,” Albert Tseng, co-founder of the venture firm Dao Foods, which backs Chinese companies developing climate-friendly proteins, told me. And yet the average Chinese consumer still only eats about half as much meat as the typical American, meaning that as the country gets richer, those numbers are only poised to grow. “The history of the world is essentially that as incomes rise, demand for protein also rises,” Tseng said.
But letting the protein patterns of the past dictate the future will have serious implications for the climate. Livestock production accounts for roughly 14% to 18% of global greenhouse gas emissions from things like methane releases and land-use changes. Yet it can seem unthinkable for many consumers to cut back on the foods they love, which is why some of the alternate protein sector’s most well-known companies are aiming to replicate the taste, look, and feel of meat.
That strategy isn’t going to fly in China though, Tseng told me. His goal is to slowly woo Chinese consumers away from meat and dairy with alluring plant-based, fungi-based, and lab-grown alternatives — ideally without customers even realizing what’s happening. For example, one of Dao’s portfolio companies, ZhongGu Mycelium, embeds the “superfood” mycelium — the root-like structure of fungi — into flour, boosting the protein-content and nutritional value of everyday products like dumplings and buns.
“We’re trying to actually crowd out demand for other proteins by infusing staple foods with the superfood ingredients that are more familiar, but also satiate people and provide the nutrition they need,” Tseng explained.
Tseng, a Canadian of Chinese descent, founded Dao Foods in 2018, with the idea that a regionally focused platform would allow him and his portfolio companies to develop deeper insights into the Chinese consumer. One lesson so far: In China, highlighting the health benefits and novelty of new proteins in their own right tends to resonate more than replicating the experience of eating meat or dairy. Dao Foods’ portfolio companies are making everything from coconut milk tea to rice proteins and plant-based hot pot broth — products designed to fit seamlessly into the country’s existing culinary culture without necessarily taking the place of meat.
“Direct replacement is probably not a sound commercial pathway,” Tseng said. Designer proteins command a higher price and are thus largely enjoyed by people explicitly trying to reduce their meat intake, whether for climate, health, or animal welfare reasons. But that conscious consumer segment concerned about the environment or animal rights is essentially nonexistent in China, Tseng told me. Rather, meat is viewed as a sign of status for the country’s growing upper and middle classes.
That cultural mismatch may be part of the reason Beyond Meat floundered when it entered China amidst the COVID lockdowns of 2020, a year after going public with a nearly $4 billion valuation. It finally exited the market early last year, and today its market capitalization is less than $400 million — a roughly 90% decline. Impossible Foods has long planned to launch in China too — the founder told Bloomberg in 2019 that it was “the most important country for our mission” — but that has yet to happen. Impossible CEO Peter McGuinness said last summer that the company was still years away from profitability.
China definitely hasn’t given up on the sector yet — it’s barely even gotten started. The country is now in the process of finalizing its five-year plan for 2026 – 2030, and “future foods” are expected to remain a part of the roadmap. Tseng noted that local mayors who implement the national government’s dictates are already competing to attract alternative protein companies to their regions, betting they’ll become drivers of regional GDP just as solar panel and electric vehicle manufacturers have been. “We’ve moved two or three companies now from one region of China to another because they’ve been interested in developing an area of expertise in sustainable food or future foods,” he told me.
So far, these regional enticements have largely come in the form of non-cash incentives. For example, ZhongGu Mycelium, is moving from Mongolia to the Western China municipality of Chengdu, where it will establish a new mycelium research and development facility and production hub. The move was a no-brainer given that “they were being offered a new factory space predominantly rent free for the first three years,” Tseng told me. Not only that, but the local government is “connecting them with the local business environment and food companies in that area. They’re providing some tax incentives, and they’re providing connections to the local university for research support.”
The U.S. can’t offer this level of state support even in the best of times. And with the current meat-loving administration in office, the likelihood of the alternative proteins market receiving any degree of federal backing is essentially nil. We simply aren’t hearing much these days from some names that were making waves just five years ago.
“A lot of these companies were ahead of consumer demand,” Kim Odhner, the co-founder of the sustainable food venture firm Unovis Asset Management, told me. When he started Unovis in 2018, companies such as Impossible Foods and Beyond Meat — an early Unovis investment — were gaining serious momentum. The firm has thus far weathered the downturn with its broad portfolio of meat and dairy alternatives — which includes an investment in Dao Foods, where it serves as a founding partner and shareholder. But as Odhner told me, “One of the most important lessons is that the whole build it and they will come mentality is very dangerous.” Many of the sector’s anticipated customers — in the U.S. and Europe at least — have yet to show up.
As Odhner prepares to raise a third fund with Unovis, he’s focusing on supporting growth-stage startups with proven technologies and minimal regulatory risk. That mainly includes businesses producing protein-rich ingredients for established food companies to incorporate into their existing product lines. It would be “very difficult,” he told me, for Unovis to raise money for an early-stage alternative protein fund today.
Like Tseng, Odhner thinks the best approach for the industry is to make inroads at the margins. “I don’t see any time in the near future — even in the distant future — where we’re going to be replacing center-of-the-plate steak with a cultivated meat equivalent,” Odhner told me.
Either way, Tseng and Odhner agree that there’s still real potential — and real money — in the sector. In China at least, Tseng thinks alternative proteins could follow in the footsteps of other clean energy industries such as solar panel and EVs that have taken root in the country despite many of their breakthrough innovations originating elsewhere. Drawing a parallel to the rise of Chinese EVs, he said that while outsiders perceived the industry as taking off overnight, its growth was actually a decades-long journey marked by plenty of missteps.
“But then at some point, it hit a tipping point,” Tseng told me. “And then the Chinese government signaled, investors poured in and supported these companies, and then you get BYD.”
