How a Chinese plant-based protein start-up is going back to basics and educating consumers “one stomach at a time”.
Franklin Yao (43) was sitting in New York, in July 2019, biting into an Impossible Burger, which got him thinking that “someone is going to do this for China with pork instead of beef– for Chinese food – and that person might as well be me.” Less than a year later, in April 2020, I was sitting across from him in Shanghai to find out how he turned that inspiration into reality. Franklin founded Z-Rou Meat 株肉, a plant-based protein brand that is proudly made in China, less than a year ago with the launch of its first products: minced and ground ‘pork.’
Franklin describes himself as “overseas Chinese” and is the embodiment of everything that entails. He was born in Toronto, to Chinese parents, and has lived half his life so far in North America and the other in China. His Chinese heritage is a source of pride and “part of this ethos.” This deeply rooted connection to China was an important factor in the creation of Z-Rou’s ground ‘pork’ product. Franklin set out to create a plant-based protein product that was not only better for the environment but was also suitable for cooking traditional Chinese dishes. Happy memories play across his face as Franklin recounts the experience of tasting traditional Chinese food in his youth.
“There is so much sense memory of dishes that can be created out of this [product]. I am not serving some kind of future food. I am allowing you to eat things like my mother’s [recipes]. You just replace the ground pork with Z-Rou to get the same dish, and the same sense of nostalgia.” – Franklin Yao
Franklin sees the plant-based food market as an opportunity for Chinese brands to make their mark and produce products that are globally recognised. He said “a consumer protein that is more efficient, safe, healthy and humane is a new category, a new way of thinking of food. So this is an opportunity for Chinese brands to emerge.” In what Franklin referred to as the previous “40-year cycle”, the traditional view was that profit maximisation and sustainable business practices are mutually exclusive. That thinking is shifting and Franklin believes that “business and good are now fundamentally intertwined” making it increasingly difficult to “build businesses that are just based on profit-seeking.” With a company like Z-Rou, Franklin and his partners are trying to “arbitrage good.”
“We are trying to build a company with a DNA that is trying to do more good right from the very beginning and that will attract customers that want to be part of this ethos or community of what we are trying to do.”
Taking the “proudly Chinese” label seriously, the ingredients in Z-Rou’s products are sourced from across China: soy protein from Northeast China, coconut oil is from Hainan, konjac is from Hubei and shitake mushrooms from Fujian. The choice of konjac increases the nutritional benefits of Z-Rou. This starchy tuber is a superfood with an edible corm that is a rich source of fiber. When comparing Z-Rou to pork, Franklin points out, “real pork doesn’t have fiber. The fiber in konjac allows us to make a product that has 62% fewer calories than actual ground pork.” The reason for making a pork substitute is due to the widespread use of pork in Chinese cuisine.
“I can’t beat pork in terms of what pork is, but I can beat it if you look at a balanced scorecard. You won’t get the exact same oiliness or fattiness, and although we’ll get better at it, I don’t think that is the goal. We have to balance the product based on nutritional content and how it is created.”
Critics take issue with plant-based proteins for being processed. Franklin counters this with a powerful perspective saying, “there is nothing natural about the way that pigs are raised as you are literally processing a living being.” In comparison “we take protein out of the soybean and just essentially mix it with other ingredients in a way to allow it to function” as a ground or minced pork substitute.
Animal proteins are linked to an increased risk of cancerous cells and other health issues. Plant-based proteins offer a healthier alternative, which is simultaneously better for the environment and more humane. We often consume food without thinking of its origins or benefits but Franklin thinks that “food tastes much more delicious in context.” When you know that what you are eating is healthier, more sustainable, and humane, then it is more enjoyable. However, he cautions against over telling the story. Ultimately, the food still has to be presented well and taste good. He believes that “We really have to start with the food. Then the education and the context and all these things build up, rather than the reverse.”
Franklin’s relationship with food can be accredited to his practice of Buddhism. He started with meditation, which he humorously describes as a “gateway drug” to Buddhism. His immersion in Buddhism taught him mindfulness. He now applies mindfulness to what he eats and channelled it into the creation of Z-Rou products. Franklin admits, “I was willfully ignorant around issues with meat. It is only through meditation and Buddhism, talking to Buddhists and learning from them that I started to understand some of these issues.”
Throughout the interview, it is clear that Franklin practices mindfulness, his responses were measured and thoughtful without having an air of being rehearsed. Franklin believes that “most of the time we are mindlessly eating” and that “we need to become better educated and mindful about some of these decisions” we make about what we eat. And this is what Z-Rou is trying to do with plant-based meat. The company also has a digital magazine called Own What You Eat that addresses the complexities behind our consumption.
Franklin points to the “correlation between education and eating meat.” He says that the more you know the less you eat.” Z-Rou’s target market is people “that are curious, that are already demanding this product, that tend to be affluent, and tend to be better educated.” Z- Rou does not aim to kick-down doors and convert people to veganism overnight, but to find accessible markets and educate customers that already like the product.
Meat consumption is often seen as a sign of affluence in China, which is often imputed as the reason why vegetarianism and veganism won’t flourish there. That doesn’t deter Franklin, who believes that the high levels of meat consumption in China are part of a 40- year cycle. What goes up must come down: “You think meat can be dramatically reduced, well it dramatically increased.” Franklin commented.
As a way to introduce the Z-Rou Meat product into the market, the company has partnered with a number of well-known and highly regarded restaurants in Shanghai restaurants. Franklin explained that they wanted to “introduce it in the right context.” He emphasised the relationships between Z-Rou and the restaurants are intended as a sustainable long- term relationship, where the Z-Rou product finds a permanent place on the menus.
Currently, the majority of the Z-Rou partner restaurants serve Western cuisine and Franklin recognises that they “need to do more” to get the product into local restaurants because “it is a Chinese product.” But he emphasised that they don’t want to do too much too quickly in accordance with their one stomach at a time philosophy: “One stomach at a time, one kitchen at a time, one restaurant chain at a time.”
While Franklin has global aspirations for the company, he is very adamant that he doesn’t want to spread Z-Rou Meat too thin and is focused on developing the brand in China first. Franklin describes the company’s identity as “a small, high-quality purveyor of this category. We have a very specific product; we are artisan in some ways. We are small and local. And we just go from there.”
So what sets Z-Rou Meat apart from the other players in the domestic and global plant- based meat industry? As a plant-based ground pork product, it lends itself to culinary creativity. In contrast, the pre-made patties and meatballs that other plant-based protein companies produce can be limiting and “disempowering for the chefs who can only heat it and add sauce.” While Franklin’s background is not in the food and beverage industry, it is evident from the way he talks about our relationship with food and the importance of taste and context of food how much he cares.
The second thing that sets them apart is their “one stomach at a time strategy”. They are not trying to convert everyone, but rather target a very specific audience. Companies such as Beyond Meat, who has recently signed a co-operation agreement with Starbucks in China, have the resources to educate, convert, and target Generation-Z en masse. While Z-Rou does ultimately want to influence Generation Z it is not their first step. “Part of the reason we are called it Z-Rou is because there is a Generation-Z component to it, ultimately we want to change their eating behaviour, I just don’t think that that generation is the first generation we should be targeting because you have to kick-down that door. The more people that we serve in those other groups, Z-Gen people surround them, and they influence Z-Gen people, and some of them are Z-gen people. That is the way we are going to get to that generation,” Franklin explained.
In the current climate, one cannot avoid discussing the impact of the COVID-19 and the resulting lock-down in China. Many companies were forced to go into hibernation during this time, but Z-Rou responded to the situation by building relationships and networks. Z-Rou also moved up business-to-consumer marketing by launching the Home Chef Challenge in Shanghai. Potential customers that signed up received complimentary packs of Z-Rou ground and minced products. By sharing photos of their Z-Rou home creations, participants were eligible for multiple prizes. The initial goal was to sign up 150
participants, but the final count was eight times that. Next up, the Home Chef Challenge will move on to Wuhan and Beijing.
When asked what the impact of COVID-19 on the plant-based protein industry has been, Franklin was reluctant to make any conclusive remarks but said that anecdotally speaking, people have reached out and said, “okay now I see what you are trying to do”. He was surprised that even people that he believed to be furthest away from Z-Rou’s target market have said “hey, you are on to something here”’ “.
The plant-based protein industry is predicted to grow 14% CAGR over the next 5 years and Franklin believes that “that 14% is going to be filled by the new players, like us.” While he expressed admiration for certain companies that have grown extremely fast, he is implementing a more step-by-step growth strategy for Z-Rou as he believes that “sometimes when you are executing very fast you don’t think about what you are executing”.
Franklin made the differentiation between fast food versus slow food and said, “The consumers that understand our product are more likely to be slow food eaters rather than fast food eaters, that is maybe the fundamental difference.” Z-Rou focuses on the taste, creativity, and presentation of the food in addition to the context of where it comes from. When asked if this approach will be successful, Franklin replied, “Fundamentally, I still think that what is real is what goes into your stomach. And if this doesn’t work then I was wrong about food.”