Bridging Cultural Gaps: Expanding Veganism into New Markets

Last year, I traveled to Seattle a lot for work and couldn’t help but notice all of the “clean eating” and vegan options in this city. When you arrive at SeaTac airport, there’s a restaurant called Floret that makes a delicious vegan coconut cake and Vitamin C kombucha. And in Capitol Hill and Ballard, Frankie & Jo’s serves some of the best ice cream I’ve had and it’s all plant-based. Who would’ve thought? Full disclosure though, I am not vegan by any means, but am fascinated by how accessible and creative vegan meals have become.

Even in countries like China, veganism has been on the rise. According to Euromonitor, China was projected to be the fastest-growing market for vegan products between 2015 and 2020, with a growth rate of 17.2%1. This statistic is surprising because having grown up with home-cooked Chinese food, I’m accustomed to seeing meat on the dinner table. Even if a dish (like this popular eggplant dish) is primarily veggies, it’s often accompanied with minced meat.

Chinese Eggplants with Minced Pork by Elaine from the China Sichuan Food blog

A lot of this has to do with the culture of meat in China. Until the late 1980s, the government tackled food shortages by issuing rations and meat was a rare luxury. Now, with China being a global economic power, meat has become a sign of prosperity. The average Chinese consumer’s access to meat has improved significantly, resulting in China now representing ~28% of the world’s meat consumption2.

So yes, I’m curious about whether the vegan movement has truly taken hold in China. If so, how? And how can entrepreneurs who are passionate about plant-based foods capitalize on this?

KNOW YOUR CUSTOMER:

Only ~4% of the Chinese population (50 million people) are vegetarian, but the average Chinese consumer is becoming more health-conscious and receptive to plant-based diets3. This, along with concerns for the environment and animal welfare (primarily spurred by younger generations), have led to a greater momentum for China’s vegan movement.

  • A 2018 survey by the New Zealand Institute of Plant and Food Research indicated that 38% of respondents in China’s Tier 1 cities said they’d switch to meat substitutes that are “low in fat”, “additive-free”, and “high in protein”4
  • In addition, the main reasons for reducing meat consumption were perceived health benefits (64%) and managing personal weight (57%)3
  • 73% have also indicated they’d pay extra for food that is deemed healthier5

KNOW THE MARKET & COMPETITION:

Restaurant owners are also adjusting menus to reflect the meat-free trend. Happy Cow (an online service that lists sources of vegan, vegetarian and healthy food) shows 1,328 restaurants in China that are either completely vegan, completely vegetarian, or serve vegan/vegetarian options. While most of these are in the more populated Tier 1 cities, such as Shanghai (126) and Beijing (99), a handful of other cities (Guangzhou, Shenzhen, and Hangzhou) are catching up on the trend. The food served at these restaurants suit the Western palette, but the combination of flavors are still local and authentic – scallion pancakes, tofu-based soups, bokchoy and bean curd-based dumplings, mushroom wontons, vegetarian hotpot with greens and mock meat, and dishes made with pumpkin, eggplant, green beans? Yum!

KNOW YOUR BRAND AND HOW TO POSITION IT:

Messaging and the food itself, especially what’s in it and how you tailor it to meet “local” expectations, matters!

  • Acknowledge regional differences. Consumers in Tier 1 cities have not only higher disposable income, but they’re also quick to adopt healthy lifestyles and foreign brands. That being said, Tier 2 cities, such as Hangzhou (home to Alibaba) and Tianjin (major port city not too far from Beijing), are not as saturated and could also be good places for your next vegan venture.
  • Use e-commerce platforms and partnerships to generate brand awareness. Chinese consumers are avid users of social media platforms (i.e., WeChat, Weibo and QQ) and engaging with them on these channels can boost your brand.
  • Consider partnerships with established chains to solidify your footprint. As a first step, Beyond Meat struck a partnership with Starbucks, which has more than 4,300 stores across China6.
  • Adapt and localize your menu. Catering to customers in new markets is important and there are ways to do it while staying true to your values and branding. For instance, instead of burgers, Zhenmeat (a plant-based meat startup based in Beijing) makes local dishes, such as dumplings, meatball, and crayfish7,8. They also understand that many Chinese consumers prefer to eat meat off the bone and have even started using 3-D printers that create protein alternatives containing bones and other structural elements9. Now that’s taking cultural understanding to another level!

Sources: [1] Daxue Consulting, [2] World Economic Forum, [3] China Briefing, [4] Plant and Food, [5] China Briefing, [6] CNet, [7] East West Bank, [8] CNBC, [9] New York Times

Food as Medicine?

Food as Medicine?

I have family members with very different opinions on nutrition. Some of them have incorporated superfoods, such as kale and acai, into their diet and follow a strict regimen. And there are others who refuse to “follow a diet” because: (1) it requires them to give up some of their favorite foods and (2) they don’t always believe in the outcome. As such, I believe it’s important to take a data-driven approach towards healthy eating. People should not only know why certain foods are good for them, but this information should also be customized and actionable, based on each person’s microbiome, health and preferred eating habits. Hopefully, by providing a solution that is backed by science and tracks progress among users, people will come to embrace this idea of food as medicine.

The Problem & Market Opportunity:

About half of the U.S. adult population —117 million people—have chronic health conditions, such as diabetes, autoimmune disorders and various types of heart diseases 1. According to the Archives of Internal Medicine, 40-80% of these conditions can be traced back to our microbiome and are preventable by maintaining a healthy diet and lifestyle 2­. Microbiomes are a “community of bacteria” that live inside our bodies and are unique to each individual. They’re heavily shaped by the foods we eat and play an important role in keeping us healthy by absorbing nutrients, regulating our immune system and maintaining stable hormone levels. As such, we want a diverse gut flora and in the event that we lack certain microbes, we want personalized diets that give us a balanced composition. Unfortunately, many of us are not equipped with the knowledge of what our body needs and even when we do, we have trouble maintaining that sustenance for the following reasons:

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The Little Big Idea:

Yes, the meal subscription market is extremely saturated. But the problem outlined above is the reason why I believe there’s room for one more meal service that curates recipes based on people’s biomarkers, food preferences and health goals. By understanding each individual’s metabolism, genetics and even how one responds to carbs and protein, meal services like Habit are taking a science-based approach to optimizing nutrition 3, 4. However, a common criticism of these services (and food subscriptions in general) are their lack of flexibility. Imagine telling your family that you would’ve loved to join for Thai food, but instead, have to eat a pre-cooked meal from your fridge. As such, the ideal meal subscription – if it doesn’t become a logistical nightmare first – makes it easy for users to eat healthy regardless of setting. It does this by giving users the choice of: a) making meals thru personalized recipes, b) heating up pre-cooked meals and/or c) receiving menu recommendations at local restaurants.

How Does It Work:

  1. Users fill out their profile and receive a genetic testing kit with instructions for collecting biological samples (e.g. saliva and stool).
  2. Samples are sent back to a lab and tested for genetic variants and biomarkers.
  3. The composition and diversity of users’ gut microbiomes are profiled and an algorithm will predict what foods are good for each user.
  4. Users receive a personalized report with tailored recommendations (e.g. ideal meals for breakfast, lunch, dinner) and information on how their bodies respond to food.
  5. Users mark off their calendars to customize their weekly mix of meal options (e.g. at-home cooking, ready-to-eat meal kits and/or restaurant items).
  6. Users receive ongoing tips and track progress through recommended metrics.

Are there similar ideas out there for you to check out?

  • DayTwo provides personalized dietary plans that allows you “to live healthier and maintain normal blood sugar levels”.
  • Vitagene provides tailored diet, exercises and supplements based on your genetic testing results

As always, I’d love to hear what my readers think! Do any of you currently use tools/services to help you eat healthy? If so, what do you like or dislike about them?

Sources: 1 Dietary Guidelines for Americans (2015-2020), 2 Fight Chronic Disease, 3 Habit (How It Works), 4 Habit (Our Science)

Wine or wine not? Knowing how restaurants price their wine may impact your decision.

Wine or wine not? Knowing how restaurants price their wine may impact your decision.

I love wine, but I’m no sommelier. When a friend and I ordered a bottle of prosecco at a “happy hour” rate of $30 (normally $40), I thought we were getting pretty good value. It didn’t occur to me until I took a sip and thought, “well, this doesn’t taste very good”, that perhaps we were better off ordering cocktails by the glass for $8-12 instead. A quick search of the prosecco brand, Primaterra, on the Internet showed me that the entire bottle retailed for $10. Given that the wholesale price is even lower, that’s more than a 200% markup! I was shocked and ever since, I’ve wondered how do restaurants price their wines? And does it make sense to order wine at restaurants? If so, when?

According to an article by Gretchen Roberts, “The Lowdown on Restaurant Markups” from the Wine Enthusiast, “industry-wide markups average two and a half to three times wholesale cost” 1. While the article is a little dated (2010), it’s similar/consistent with a more recent article from Crain’s in 2015, which reports markups of up to 300% per glass (4 times the wholesale price) 2. Why is this the case? Here’s how restaurants would justify their pricing strategies:

  • Value-add to the drinking experience. Restaurants spend time selecting wines that pair well with menu items and can provide that knowledge when you ask for recommendations 3.
  • It’s market-driven. People who order wine often feel strongly about it and if they’re willing to pay the premium, why not?
  • Taxes. Each state collects excise taxes on wine that is consumed, varying by alcohol content and ranging from $0.20 (California & Texas) to $2.50 (Alaska) per gallon 4, 5.
  • Costs. The need to cover stemware, wages, rent, inventory, may warrant restaurants to charge a markup on wine 6. One-off restaurants (unlike chain restaurants) do not benefit from volume discounts and therefore, may need to mark up wine prices more to cover costs. And it just so happens that wine is one of those few menu items for which there is a market even if you charge a premium.

That being said, I’m not convinced by the reasons above because there’s no indication that restaurants will be worse off by reducing prices and in doing so, make up for the difference by encouraging more people to consume wine.

So should you order wine or not? It depends. Most restaurants are not BYOB (bring your own beverage), so if it’s a romantic dinner or if you’re catching up with friends after a long day at work, it might make sense to pay a premium for wine to savor the moment. If you do decide to wine (and dine), here are some quick guidelines for you:

  • Markups are higher on the cheapest wines than on the more expensive ones, so you’ll get more bang for your buck by ordering a few levels above 1, 4.
  • Don’t order wine by the glass, especially if you have enough people to share a bottle 7.
  • It’s OK to try lesser-known brands. Restaurants are more likely to place a full markup on popular brands they know they’ll sell 1, 4. According to Juliet Chung from the WSJ, “wines from regions like Argentina and Spain are likely to be marked up less than ones from Napa or Bordeaux” 7.
  • Use an app like CellarTracker, to help you find good-value wines.
  • If you’re in New York, I’ve compiled a short list of wine markups for restaurants and wine bars that were voted to be the best in 2018 by The Infatuation and Eater NY. I was initially trying to gain insights on whether restaurants and wine bars price their wines very differently, but it seems like the markups are all over the place! These numbers are markups on average retail prices I found on sites like Wine-Searcher and Vivino for wine of the same type/vintage and from the same winery. I only took a sample of each restaurant’s wine list, so that’s where the accuracy may be off. Overall, it looks like the markups at wine bars and high-end restaurants, such as Momofuku and Balthazar, are lower than the rest, but their price points are also higher ($36-$100+). Whereas places like “Her Name is Han” had a really high 290% markup on their wines, but they were priced all at $37/bottle and retailed for only $5-14.
Name Neighborhood Type Yelp Rating Average Markup Over Retail
Vanguard Wine Bar* Upper West Side Wine Bar 4 125%
Momofuku Ssam Bar East Village Restaurant, American (New) 4 144%
Jadis Lower East Side Wine Bar 4 145%
Amelie Greenwich Village Wine Bar & Restaurant, French/Belgian 4.5 153%
Terroir Tribeca Tribeca Wine Bar 4 163%
Balthazar SoHo Restaurant, French 4 164%
Le Cou Cou SoHo Restaurant, French 4 205%
Gottino Enoteca Salumeria West Village Wine Bar, Italian 4 214%
Aldea Flatiron Restaurant, Portuguese 4 251%
Her Name Is Han Midtown East Restaurant, Korean 4 290%
Victor’s Café* Midtown West Restaurant, Cuban 4 341%

* For restaurants/wine bars that only offered pricing by the glass, I made the assumption that had they offered bottle pricing, it would be 3.7 times the amount charged by glass.

Lastly, don’t forget that “price” is only one factor to consider in your selection of wine! I’m always drinking $10 wines from Trader Joe’s, many of which I’d prefer over the really expensive ones anyway. So don’t forget to keep that in mind too!

Sources:

1 https://www.winemag.com/2010/05/07/the-lowdown-on-restaurant-markups/

2 http://www.chicagobusiness.com/article/20150319/BLOGS09/150319719/why-your-glass-of-wine-costs-so-much-or-does-it

3 http://www.newsweek.com/2014/07/11/why-wine-can-cost-four-times-much-restaurants-257169.html

4 https://www.reluctantgourmet.com/restaurant-w-wine-markups/

5 https://www.statista.com/statistics/324624/us-wine-excise-tax-rates-by-state/

6 http://www.businessinsider.com/how-wine-markups-work-2017-3

7 https://www.wsj.com/articles/SB121875695594642607