China Food

Looking for the next explosive from the Chinese dietary structure

“  
what shall we eat in the future
 ”

Text: Cai Yufei, Li Li, Dong Lebin, Liu Yanlin   

Source: Fengrui capital (ID: freesvc)

 
When it comes to eating and drinking in the future, there are already a lot of discussions about sugar substitutes and artificial meat. The new consumption and entrepreneurship around eating and drinking is also lively enough. We hope to focus on the essential and long-term topic of dietary structure to see what China’s current dietary structure looks like? How should we eat in the future? What should we do to adjust our current dietary structure? Dietary structure What are the entrepreneurial and investment opportunities behind the structural adjustment?
 
In the process of exploring this topic, we looked at the changes of American dietary structure, and then found some interesting phenomena. We also realized that in the general direction from full to good and healthy, even the same technology will bring different application results in China and the United States due to different population structure, social culture and infrastructure.
 
When it comes to the application of science and technology, we always need to think about how to solve the problem of product industrialization and cost performance.
 
Before entering the text, share a few points:
 
  • There are at least three factors that promote the upgrading of dietary structure: urbanization or consumption upgrading change the population distribution and population status at the bottom, resulting in the increase of consumption demand on the demand side; Technological development promotes the improvement of product richness and quality on the supply side; Industrialization, scale and intensification have driven the progress of infrastructure, and the connection between supply side and demand side can reduce costs and increase efficiency. At present, China is just at the intersection of these three changes.
  • The change of China’s dietary structure in the future is not the energy structure, but the dietary structure, that is, from “eating well” to “eating healthy”.
  • To find a suitable alternative or transition scheme, we can refer to foreign experience in the process of technology R & D and implementation, but we must also consider China’s specific national conditions, including eating habits, industrial structure, production capacity status, technology development, promotion cost, supporting infrastructure and other comprehensive factors.
  • In areas where bottlenecks or contradictions are more obvious in the upgrading of dietary structure, the development of alternative technologies may receive greater support from policies and industries.
  • Synthetic biology may be the key to the solution of nutrient deficiency in China in the future.
  • The long-term contradiction between milk supply and demand and many insurmountable bottlenecks determine that compared with other countries, China has much greater power to promote the synthetic biology or protein engineering of milk and milk protein. “Artificial milk” technology is expected to have a great impact on the supply side pattern of China’s dairy products in the future. It is a possible way to solve the problems of low quality and insufficient supply of domestic dairy products.
 
I hope it can bring you a different perspective. You are also welcome to leave a message at the end of the article to share your views on the development trend of food consumption in the future.
Constant energy structure, changing dietary structure
Food is the most basic of the three necessities (food, clothing and housing).
 
According to the data from the National Bureau of statistics, in 2020, under the background that the total retail sales of social consumer goods decreased by 3.9% year-on-year, the social retail sales of food increased by 9.9% year-on-year. Food consumption plays an important role in commodity consumption.
 
With the rapid growth of domestic food consumption scale, food consumption demand is developing in the direction of health, safety, high quality, personalization and diversification. Promote a new round of optimization and upgrading of dietary structure, including at least three factors: urbanization or consumption upgrading have changed the population distribution and population status at the bottom, resulting in the increase of consumption demand on the demand side; Technological development promotes the improvement of product richness and quality on the supply side; Industrialization, scale and intensification have driven the progress of infrastructure, and the connection between supply side and demand side can reduce costs and increase efficiency. At present, China is just at the intersection of these three changes.
 
To grasp the future trends of the food consumption industry, we must first answer a question – is the energy structure or dietary structure changing in the upgrading of China’s dietary structure?
 
You can refer to the situation in the United States.
 
In the book “the rise and fall of American growth”, by observing the records of American food consumption from the 19th century to the 20th century, the author Robert Gordon came to an amazing conclusion: the calories in food consumption have hardly changed in the past 200 years, and the per capita daily calorie intake has even decreased since 2000.
 
Although the calorie intake is relatively stable, the dietary structure has actually changed greatly. For example, the most common breakfast for American families in 1870 was pork flour porridge. By the 1920s, the common breakfast had become cereal packaged foods such as corn flakes and citrus juice.
With a relatively stable calorie intake, people eat more: the proportion of meat and grain decreases and is replaced by fruits, dairy products, eggs and other processed foods.
 
The same is true in China. After satiety is not a problem, the high probability of China’s food consumption upgrading in the future will also be reflected in the optimization of dietary structure.
Current dietary structure in China
“Eat well” is no longer a problem?
 
Over the past decades, the dietary quality of Chinese residents has improved steadily, which is mainly reflected in the gradual decrease of carbohydrate energy supply ratio and the increase of protein and fat energy supply ratio.
 
Specifically, since 1982, the food and potato intake of Chinese residents has continued to decrease, from 509.7 g / day in 1982 to 337.3 g / day in 2012; Potato decreased from 179.9 g / day in 1982 to 35.8 g / day in 2012. Meanwhile, the intake of meat, eggs and milk continued to rise.
So, “eat well” is no longer a problem.
 
Eat well, but not healthy enough
 
Although people eat better, there is still a gap from the internationally recognized healthy dietary structure.
 
The global disease burden study shows that unreasonable diet is the most important factor in the occurrence and death of diseases in China. In 2017, 3.1 million deaths in China could be attributed to unreasonable diet. In the past few decades, although some dietary factors are improving, the dietary quality of most people is still not ideal.
 
Globally, the widely respected healthy dietary structure belongs to the “Mediterranean diet pyramid”. The “Mediterranean diet pyramid” was jointly proposed by oldways, the school of public health of Harvard University and the World Health Organization in 1993. It mainly refers to the diet patterns of Greece and southern Italy in the 1960s. This diet is thought to reduce the risk of heart disease, depression and dementia.
 
Specifically, the Mediterranean diet has the following characteristics:
  • Eat whole grains, fruits, vegetables, olive oil and nuts every day
  • Eat fish and seafood at least twice a week
  • Eat dairy products, eggs, poultry and meat in moderation
  • Eat less red meat and sweets
  • Drink water often and drink (wine) in moderation
  • Cooking method: mainly slow cooking at low temperature
  • Daily life style: dining with family and friends, lunch break and regular exercise
 
If we take the “Mediterranean diet pyramid” as the benchmark, we can clearly see the problems existing in China’s dietary structure:
  • More red meat and more processed meat products (such as ham, bacon, sausage, canned meat, etc.)
  • Multi sweet drinks, high trans fatty acids
  • Less whole grains, less fruits, less nuts, less vegetables, less fiber
  • Less polyunsaturated fatty acids, less beans, less calcium and less milk
 
The scientific research report on dietary guidelines for Chinese residents (2021) organized and prepared by the Chinese Nutrition Society points out that residents have insufficient intake of whole grains, dark vegetables, fruits, milk, fish, shrimp and beans.
 
Dietary factors are closely related to the immune level and the risk of chronic diseases. There are abundant venture capital opportunities behind how to provide better dietary solutions for citizens.
 
Venture capital opportunities brought by dietary improvement demand
How to judge whether it is an opportunity or a trap?
 
We hope to find the technical driving force and technical path to promote the new round of dietary structure upgrading, but before specific implementation, we need to find out which factors and variables affect the development opportunities and development direction of technology in the future.
 
The study of the rise and fall of American growth shows that the change of dietary structure is never a simple thing. Behind the transformation from “full” to “good” is the upgrading of supply and demand in the context of infrastructure upgrading in the United States. With the increase of family budget, people gradually began to increase the diversity of monotonous diet, resulting in the demand for consumption upgrading. At the same time, on the supply side, the popularization of food canning and other technologies makes large-scale industrial production possible. In terms of infrastructure connecting the two ends of supply and demand, the development of refrigeration technology, the popularization of railway transportation and more chain department stores have made the two ends of supply and demand more effectively connected.
 
The adjustment direction of dietary structure is not only related to the demand for upgrading residents’ dietary consumption, but also subject to the level of technological development, which is reflected in the supply side and the infrastructure connecting the supply and demand sides.
 
Taking these comprehensive factors and variables into account can help us judge:
 
  • To promote the upgrading of dietary structure, taking into account China’s existing resource allocation and industry status, which can achieve self-sufficiency through structural adjustment?
  • In the long run, if the problem cannot be solved through simple structural adjustment, what alternative technologies can break the bottleneck and open new ideas? Which technologies are likely to change first? Some technologies have received good market feedback abroad. Does that mean they are also suitable for China? If appropriate, will there be different applications from foreign countries in the specific technology implementation?
 
To find a suitable alternative or transition scheme, we can refer to foreign experience in the process of technology R & D and implementation, but we must also consider China’s specific national conditions, including eating habits, industrial structure, production capacity status, technology development, promotion cost, supporting infrastructure and other comprehensive factors.
 
In addition, the more obvious the bottleneck or contradiction in the upgrading of dietary structure, the greater the policy and industrial support for the development of alternative technologies.
 
What is particularly interesting is that the consumption topic of how to change the diet structure has become a scientific and technological topic in our exploration process, and even an application topic of synthetic biology to some extent. For example, synthetic biology may solve the problems of dietary supplements and artificial milk in China.
In the direction of synthetic biology, we have invested in the enterprise Blue Crystal microorganism for molecular and material innovation based on synthetic biology technology. The innovative products developed by Lanjing include the only plastic on the market that can degrade in the natural environment (including seawater), industrial marijuana ingredients used to fight anxiety and analgesia, anti alcohol drugs that can help solve the genetic defects of alcohol metabolism in East Asians, and so on. We are optimistic about synthetic biology and other interdisciplinary projects driven by computing and data science. Welcome to talk to us.
Scientific and technological direction of promoting the improvement of dietary structure
 
Next, we will discuss the possible technical solutions one by one according to the four problems existing in our current dietary structure.
1、 Through synthetic biology, solve the problem of excessive intake of saturated fatty acids and insufficient intake of unsaturated fatty acids
 
  • Existing problems
 
Red meat, including pork, is the most common meat on the Chinese table. As the world’s largest producer and consumer of pork, China produced 54.04 million tons of pork in 2018, accounting for 47.8% of the global total output, and consumed 55.398 million tons, accounting for 49.3% of the global total consumption  。
 
Compared with red meat (pork, beef, mutton), white meat (poultry, aquatic seafood, including chicken, duck, fish, etc.) is a protein source with excellent germplasm and sufficient quantity, and the content of unsaturated fatty acids is higher. However, for a long time, China has been in a state of extremely unbalanced meat consumption structure.
There are many reasons behind it. In addition to history and eating habits, pigs also have higher production rate and shorter sales cycle than other livestock and poultry. Over the past forty years, a major problem with the pork production and consumption structure is that most people have protein intake from red meat and high saturated fatty acids, incidence rate of obesity and cardiovascular diseases is increasing year by year.
 
  • Current solutions
 
To solve the problems of excessive intake of saturated fatty acids and insufficient intake of unsaturated fatty acids, we can start from two aspects:
 
  • Higher quality protein sources: including white meat, fish, Greek yogurt, beans and peas, poultry, fat free cheese, white tofu, low-fat beef, low-fat milk, frozen shrimp and egg white
  • Supplement unsaturated fatty acids: Omega-9 mainly comes from olive oil and camellia oil; Omega-3 mainly comes from oil, flaxseed oil, perilla oil, hemp oil, etc. of deep-sea fish
 
The current solution is to increase the intake of these foods and take supplements. However, from the perspective of the market, this “straight-line path” is not the only solution, or perhaps the optimal solution.
 
  • Restrictions on raw materials
 
To obtain higher quality sources of protein and fatty acids, deep-sea fish is the best choice. However, due to the special living environment of deep-sea fish, only a few countries with excellent deep-sea fishing grounds have the conditions for large-scale fishing. At the same time, deep-sea fish can not improve production capacity through artificial breeding intervention.
 
Compared with other countries, China has higher difficulty and cost in obtaining deep-sea fish resources. At present, the price of deep-sea fish per kilogram is more than six times that of beef per kilogram. For most families, deep-sea fish are valuable ingredients. In the future, with the upgrading of health awareness, people’s demand for deep-sea fish will further increase, and the contradiction between supply and demand caused by limited production may lead to further price increase.
 
Crayfish is a scheme between red meat and deep-sea fish, which belongs to the upgrading of meat consumption from red meat to white meat. In this field, Fengrui has invested in the food brand xinliangji. Xinliangji was founded in 2016, focusing on crayfish in its early years and cutting into the field of aquatic products and prefabricated dishes.
 
  • Omega-3 in vegetable oil is difficult to absorb
 
Compared with the limited production of deep-sea fish, oil crops seem to have a huge capacity improvement space. But this is not the case. Increasing the intake of specific vegetable oils also does not solve the fundamental problem. Because omega-3 in vegetable oil is α- Linolenic acid (ALA) can be converted into EPA and DHA by human body, but the conversion rate of this process is low, which is difficult to meet human needs.
 
  • Process and price of supplements
 
Since it is difficult to obtain sufficient unsaturated fatty acids through direct consumption of seafood such as fish, dietary supplements are often regarded as another possible solution.
 
However, the problem is that the fish oil sold on the market is still extracted from the viscera of deep-sea fish, and the raw material is still restricted by the output and price of deep-sea fish. In addition, because omega-3 is easy to oxidize and not resistant to high temperature, manufacturing enterprises mostly use molecular distillation for processing. To ensure the quality of fish oil, the production and storage need to maintain a specific temperature, so the equipment is expensive and the energy consumption is higher, which leads to the high processing cost and product price.
 
  • Future alternatives
 
Obtaining omega-3 by culturing fish liver stem cells or algae is conducive to getting rid of the production restriction of deep-sea fish, realizing large-scale and stable supply, and reducing cost and increasing efficiency in the production of unsaturated fatty acid supplements. However, the challenge lies in the cost control of culture medium and how to extract omega-3 from fish liver and algae cells more efficiently.
 
In addition, synthetic biology technology can also help solve the problem of excessive intake of saturated fatty acids. When people try to reduce red meat intake, how to find alternative foods with both nutritional value and taste becomes the key. Plant meat processed from bean protein needs complex seasoning to cover up the taste of bean and simulate the taste of animal meat. Through the method of synthetic biology, DNA modification can be carried out on high-quality protein sources such as nutritional yeast to meet different tastes and preferences of consumers.
 
2、 Through artificial milk, solve the low quality and insufficient supply of domestic dairy products
 
  • Existing problems
 
Milk, known as white blood, contains all the nutrients needed for human growth, development and metabolism.
 
With the continuous improvement of income level, China’s per capita milk consumption continues to grow. According to wind financial database, China’s per capita milk consumption in 2019 was about 32.66 kg, about 30% of the world’s per capita milk consumption. Even compared with Japan, which has similar eating habits, China’s milk consumption is less than half that of Japan.
 
It is generally believed that the high price of dairy products is an important reason to suppress demand.
 
The research of Guolian securities shows that among the major countries in the world, the price of raw milk in China is second only to Japan. In 2018, the price of raw milk in China was 3.46 yuan / kg, 32% higher than 2.36 yuan / kg in the United States in the same period. If the income gap is taken into account, the relative price of raw milk in China is higher.
 
What causes the high price of raw milk?
 
Look at the supply first. According to the data of the National Bureau of statistics, China’s milk production has not increased significantly in the past decade. After the Ministry of agriculture and rural areas issued 18 measures to revitalize the dairy industry in 2018, the milk output has increased in recent years, and the raw milk output has increased from 31.59 million tons in 2014 to 34 million tons in 2020.
 
Milk production mainly depends on the number of dairy cows and per unit yield of dairy cows. The insufficient number of dairy cows is one of the important reasons why milk production can not go up. According to the report of the U.S. Department of agriculture, the number of dairy cows in China decreased from 8.4 million in 2015 to 6.15 million in 2020.
 
The main factors for the decline of the number of dairy cows include feed price, pasture resources and the degree of large-scale breeding.
 
Feed cost is the main cost of raw milk production, which has a great impact on the benefits of dairy farming. Cow breeding feed includes roughage, concentrate, and supplementary feed. Among them, concentrate plays an important role in improving the unit yield of dairy cows. Concentrate mainly includes corn and soybean meal, and its price fluctuation is mainly affected by the change of supply and demand relationship and weather natural disasters.
 
Alfalfa is the main forage. Alfalfa has a great impact on the improvement of raw milk quality, especially the high-quality alfalfa is heavily dependent on imports. According to the statistics of China Customs, from January to April 2020, China imported 372000 tons of alfalfa, the total import amount was about 135 million US dollars, and the average CIF price was 364 US dollars / ton, an increase of 10.83% year-on-year.
 
  • Current solutions
 
According to the customs data and the report of China first finance and economics, in 2020, China’s cumulative total grain imports exceeded 140 million tons, of which nearly 80% of the imports of agricultural products are used or used to produce feed raw materials, and the demand for corn and soybean is the largest. It has become an inevitable trend to research and develop new feed alternatives to alleviate the cost pressure.
 
In terms of policy, in September 2020, the general office of the State Council issued the opinions on promoting the high-quality development of animal husbandry, proposing to promote the reduction and substitution of corn and soybean meal.
 
However, the promotion of alternatives faces practical problems, mainly reflected in market recognition. The research on feed substitution technology requires a professional experimental team due to the high access threshold. Immature technology may lead to the lengthening of feeding cycle and the fluctuation of product quality.
 
In addition to feed substitution, the self-sufficiency rate of core sources of dairy cows in China is low, and the degree of external dependence is still high. Domestic dairy breeding bulls mainly come from live introduction and imported embryos, and high-quality frozen semen is also mainly imported. Professor Zhang Shengli and Professor Sun Dongxiao of China Agricultural University put forward the development of independent cultivation of core provenances and rapid propagation technology of improved dairy varieties, which is an important direction to reduce the production cost of domestic breeding enterprises and rapidly improve the milk yield.
 
  • Future alternatives: synthetic biology driven artificial milk
 
The long-term contradiction between milk supply and demand and many insurmountable bottlenecks determine that compared with other countries, China has much greater power to promote the synthetic biology or protein engineering of milk and milk protein. “Artificial milk” has become a promising research direction.
 
It can even be said that China’s milk is not self-sufficient at present, and our milk protein intake is further increasing. This is evidenced by the sharp rise in the sales of high-end yogurt, low-temperature white milk, milk tea, latte, cheese and other products that improve the intake of milk protein, as well as the extraordinarily hot vegetable milk represented by coconut milk and oat milk.
 
“Artificial milk” is to use various chemical and biological methods to mix in the laboratory to develop milk with the same taste as ordinary milk but higher protein content and nutrients.
 
The advantage of artificial milk is that the production process is green and pollution-free, and the nutrients are the same. After mass production, it can meet the large demand for high-quality dairy products in China. Lactose free dairy products can be made directly.
 
The representative case explored in this field is perfect day, an American start-up company. Perfect day does not need to raise cattle to produce “milk”, but is produced through experiments. Using the principle of synthetic biology, perfect day embeds milk making DNA into flora, and then uses fermentation technology to produce casein, whey, sugar and other elements, which can be used to make ice cream, butter, cheese and other foods.
 
Without relying on animals, perfect day avoids common supply problems and claims to be able to increase and reduce production according to demand. Compared with traditional animal husbandry, artificial milk reduces 91% of land demand, 84% of greenhouse gas emissions (methane in steak is a greenhouse gas) and 65% less energy (feed for cattle) because it does not need to raise cattle.
 
Perfect day launched artificial milk ice cream in 2019. Its taste and texture are no different from milk ice cream. A single box (1 pint) costs $20 and is sold out within 24 hours after listing. Perfect day announced in November 2018 that it decided to shift from the to C model facing consumers to the B2B model, and plans to cooperate with more food companies to rapidly promote production.
 
The latest round of round C financing of perfect day took place in July 2020. So far, it has received a total investment of US $300 million from Temasek, Canadian pension fund and horizons ventures founded by Li Ka Shing. It is one of the most funded dairy substitute companies today.
 
However, problems also exist. Artificial milk is still in the early stage of development. In addition to meeting certain standards in taste, nutrition and hygiene, it also depends on people’s acceptance and cost control. However, once it has made great progress, it will have a revolutionary impact on the supply side pattern of China’s dairy products in the future.
 
3、 Solve the problem of insufficient and monotonous intake of fruits and vegetables through plant biochemical extract supplements or dried fruits and vegetables
 
  • Existing problems
 
Compared with the Mediterranean diet, the national intake of fruits and vegetables is too small and the types are monotonous. According to the data of the scientific research report on dietary guidelines for Chinese residents (2021), light colored vegetables are the main vegetables in the diet of Chinese residents, and dark vegetables account for 30% of the total, which does not reach the recommended level of more than 50%; The per capita fruit intake is still low, and the urban population with high per capita intake is only 55.7g/day.
 
The reason for the low intake and monotonous variety of fruits and vegetables is that fruits and vegetables have requirements for climate, water and soil conditions, and different regions are suitable for planting different fruits and vegetables. The long-distance transportation of fruits and vegetables requires very high requirements for the cold chain.
 
  • Future alternatives
 
Phytobiotic supplements: different kinds of fruits and vegetables contain different nutrients and have different functions, such as anti-oxidation, anti-cancer, cholesterol reduction, etc. If the household consumption of fruits and vegetables is relatively single, phytobiotic supplements can be used to fill the lack of nutrients in the future. Similar to vitamin supplements, targeted supplements can be made according to specific dietary conditions. But the problem with supplements is how to make it acceptable to the public. It will not be a sustainable solution if it cannot be brought to the market in a form acceptable to the public on a daily basis.
 
Dry shrinkage of fruits and vegetables: that is, the nutritional activity of fruits and vegetables can be preserved through new food processing methods, which is convenient for long-distance transportation and can also improve the taste. For example, freeze-dried fruit is to freeze the water in the fruit in advance by using the vacuum freeze-drying method of the freeze dryer, and then sublimate the frozen water in the fruit in a vacuum environment, so as to obtain the freeze-dried fruit and retain its original nutrition.
 
4、 Nut based food to solve the problem of insufficient nut intake
 
  • Existing problems
 
The general lack of nut intake in China has become a major inducement for Chinese people’s sub-health.
 
According to the dietary guidelines for Chinese residents 2016, soybean and nuts should be consumed 25-35 grams per day every week, including about 10 grams of nuts per day. However, the research shows that the average intake of adult residents in China is only 7 g / day, and mainly seeds and nuts such as melon seeds and peanuts, while the consumption of tree nuts such as walnuts and almonds is low.
 
To increase the intake of nuts, in addition to solving the price problem caused by low domestic production and large dependence on imports, we also need to overcome taste and eating obstacles. From the perspective of traditional taste preference, Chinese people are more used to eating melon seeds and peanuts, which belong to the varieties with light nut taste. In terms of eating, because many kinds of nuts are chewy, it will be more difficult for the elderly and children to eat them.
 
  • Future alternatives
 
We can consider developing new food processing technologies to make nut food more acceptable to the public. The main vegetable protein drink “six walnuts” is one of the typical representatives. We believe that there will be more “six walnuts” nut based products in the future. They solve the problem of nutrients and have a taste and taste that users can accept or even like.
 
Recently, the popular plant-based yogurt on the market also belongs to this idea. For example, the Badan wood-based plant yogurt launched by the food brand “jooma Meiren” is fermented with Badan wood nuts, which retains the natural nutrients of Badan wood. The innovative fermentation process also makes the nutrients easier to digest and absorb.
Original title: Fengrui report 25: looking at food investment from China’s dietary structure
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