Sustainable businesses can be financially rewarding. Look no further than the American plant-based meat brand Beyond Meat, whose shares on Nasdaq have risen sixfold since going public last May. One of its investors and distributors, Green Monday Group from Hong Kong, has also attracted investor interest, raising $70 million from a group of investors including TPG’s Rise Fund, Swire Pacific and the popular Taiwanese singer Wang Leehom. Personalities such as James Cameron, Mary McCartney and Susan Rockefeller are also some of its longer-term backers.
Starting out as an advocacy platform in 2012, Green Monday has expanded into a multi-pronged plant-based food enterprise. A member of Fortune’s 2020 “Change the World” list, it operates OmniFoods, a food tech company that produces alternative protein products, as well as Green Common, a plant-based food retailer, distributor and restaurant chain.
Here CEO David Yeung talks about how mainland China is going to be a central part of its expansion plans.
What prompted you to start Green Monday?
When we started eight years ago, the awareness of the correlation between sustainability and food was virtually non-existent. People did not realise that our choice of food has such a huge impact on the environment, including carbon emissions, water scarcity, land use, biodiversity and all that.
But 2006 was a momentous year. The United Nations published a very elaborate report that explained the many negative impacts coming out of the meat industry. The carbon footprint from the livestock industry, for instance, is larger than all the transportation sector combined. The same year also saw Al Gore releasing his documentary An Inconvenient Truth. As a vegetarian at that time (I’ve been one for 20 years) I thought that this was information that people needed to know. This is about the collective survival of humanity and the planet. And we being in Asia, such awareness was so far behind. That was the reason why I started Green Monday.
What is Green Monday’s business model?
Green Monday is a unique organisation. We’re not one-dimensional. We’re not just in advocacy. We’re not just a product company. We’re not just a shop or a restaurant. We’re actually all of the above, and more.
My idea is to first create the movement and the awareness. The movement is Green Monday, which advocates that everyone can and should choose more plant-based food one day a week, and use that as an opportunity to help the planet. On the other hand we also need to provide solutions because you can’t just tell people to not eat this or not eat that. You’ve got to give them alternatives. I don’t think tofu and salad alone can take us too far, unfortunately.
You’ve got an impressive roster of investors. Can you give us some colour on your latest fundraising?
First of all, we’re very honoured and very humbled to have such an impressive group of investors joining us and supporting us.
Now, of course, this year is the Covid year, so things took longer than expected. But in the end it turned out to be better from our standpoint because people became much more aware that we have a food system crisis and a global environmental crisis.
I am super proud that Green Monday has become a TPG Rise portfolio company. Its founding board members are among the most impressive group of people in the world. You’re looking at Pierre Omidyar, Jeff Skoll, Richard Branson, Bono, Reid Hoffman and Paul Polman – people who use their entrepreneurial energy to address a lot of global issues. They are not just successful business people; they are also very successful in terms of saving the world in a positive way.
I have been following the Rise fund since it was founded in 2016. At the time I thought that if we could be a Rise portfolio company there would be so much that we could learn and there would be so much synergy.
Of course the other story is Wang Leehom – almost everyone who speaks Chinese knows who he is. Wang has been mostly plant-based in his diet since the end of last year. He has very explicitly shared on social media that he’s committed to a plant-based diet and I met him earlier this year when visiting Taiwan. He told me he was very impressed with what we’re doing and he wanted to contribute. By that, he doesn’t just mean showing up at an event or taking a photo. He said he wants to be engaged in a long-term relationship and role. That’s also something that we’re extremely humbled by. His influence can go a long way.
What about Swire Pacific?
Swire is of course a mega conglomerate. They’re in Hong Kong, China and the UK. Sustainability is something that is very deeply ingrained in their corporate philosophy. There’s so much synergy that we can create with them. Number one at the moment is inflight meals and food in airport lounges. Under normal circumstances, there would be tens of millions of people flying Cathay Pacific and Hong Kong Express every year. The exposure that these airlines can bring to global consumers could be extremely impactful.
The other way to collaborate is, of course, through their shopping malls, particularly those in China. We aim to create major flagship stores or hubs at Swire properties. They also run hotels and restaurants, and have exposure to a number of different industries. They can champion plant-based diets internally and externally. So really, it’s a very diverse, very broad partnership. But aviation – when flights resume – is going to be quite a big piece of it.
How are you going to deploy the new funds?
The area that we will be dedicating a lot of resources to is production. We need to set up a facility in China in Guangdong and we will boost our existing production facility in Thailand. We’ll boost our research and development and we will expand the footprint of our flagship, showcase stores Green Common.
We see Green Common as a very important part of the puzzle in providing a showcase experience for people to dine in and to shop for products for home-cooking as well. Of course, we will also need to expand the team in order to grow in multiple countries and markets in Asia and further afield.
You’ve announced a plan to double your footprint to 40,000 points of sales worldwide in the next six months. How are you going to achieve that?
We can achieve so much through product penetration, regional penetration and global expansion. We’re in roughly 10 markets now including mainland China, Hong Kong, Taiwan, Singapore, Malaysia and Thailand. We’ve just entered Japan and the Philippines. In terms of deepening penetration in all of these markets, there is a lot of work to be done such as striking partnerships with major F&B and retail chains. For F&B, that could be any restaurant, including the quick-service ones, hotels and café chains. We’ve been doing that already and will further expand on that initiative.
In China we’ve partnered with Starbucks, which has 4,000 stores across the country. We’ve also worked with Jixiang Wonton in Shanghai. Others include Wagas Group and White Castle – both local and international chains. Recently we’ve entered supermarkets such as Ole, CitySuper and 7Fresh too. In Hong Kong, our most recent major partnership is with McDonald’s and we’re also working with convenience store chain 7-11 and fast food giant Fairwood. Our products are sold at Dairy Farm supermarkets as well as Park n Shop.
In Taiwan we work with 8 Ways International, Family Mart and most recently Ikari Coffee, which is a big coffee chain. In Thailand we’ve launched our Omni Happy Bao at Tops supermarket. So there are quite a lot of chains we’re working with – I can keep on listing.
On the other hand we will be expanding into new markets. We plan on getting into the rest of Asia, such as South Korea, Vietnam and Indonesia. And of course there are the non-Asian parts of the world – Australia, Europe, North America etc.
What about Green Common as a retail chain?
For Green Common, we have nine locations today in Hong Kong. We will be opening the first one in China in Shanghai before the end of the year. We definitely have plans to open in all the major cities like Beijing, Shanghai, Shenzhen and Guangzhou. We will also open the first Green Common in Singapore in the first quarter of next year.
We see Green Common as a very important piece of the puzzle in terms of entering new markets. We’re talking about food and it is very important for people to have a place, a destination, where they can go to experience what all these new products and new brands are about.
At Green Common we do not just sell OmniPork – we’re also a distributor for many different brands. Beyond Meat, Califia, Alpha Foods, Gardein, Miyoko and Daiya – these are some of the top plant-based brands globally that we’re distributing in Hong Kong. We’re also bringing many of these brands to different parts of Asia. For example, we’ve brought Beyond Meat to Starbucks in Taiwan and Thailand. We carry different brands so as to promote the entire plant-based lifestyle as opposed to a single product.
The store in Shanghai is going to be a model for others in China? Is it going to be similar to what we’ve seen in Hong Kong?
All Green Common stores are one-stop destinations that integrate dining and shopping. We want to create an experience that is holistic, accessible and convenient. The Shanghai store is going to be the first one in China. It will feature a lot of new elements including education, events and partnerships. It’s not just going to be a place to eat or shop. The idea is to make it a community – a hub where people sharing the same passion for greenness or having the same mindset can gather.
How will your Guangdong production facility contribute to your growth in China?
If we want the pricing of our products to be competitive and affordable we need to reduce all unnecessary costs. At present a lot of the costs in the value chain come from the expense of importing, customs and logistics. Given that China is obviously a mega market, and it’s going to be a very important market for us, having local production to minimise unnecessary costs and also to optimise the efficiencies in shipping from Thailand to China, or Thailand to anywhere else, is essential.
If we can ship within China then of course the overall costs will be lower. Organisation and coordination will be easier. Based in Hong Kong, we are also expecting a lot of potential benefits from Greater Bay Area collaboration.
Our production facility in Guangdong will be built in three phases and its capacity will grow over time. The first phase is set to be completed by the first half of next year. And of course we might add manufacturing sites number two and three in the future – although they might not be in Guangdong. It’s too early to say now.
Is mainland China going to be Green Monday’s biggest market?
China is definitely going to be a huge market.
But at the same time the readiness for what we’re doing is still at the very early phase [among Chinese consumers]. As of now the US, the UK, Australia and Germany have higher awareness of plant-based food than Asia generally.
So we expect China to be the biggest market but it depends on the timeframe we are talking about. If you’re talking about 2020 or 2021, the answer is “no” because the market is barely opening. But if you’re talking about 2025 or 2030, then we certainly believe that China has to be one of the biggest markets. First of all, there is a huge population. And secondly, the awareness, acceptance and availability of our products as well as of the overall plant-based categories are going to be much stronger by then.
There are a rising number of plant-based meat producers and brands in China. Do you think the market can absorb that many players?
China is a big market. And food is a very big industry. In Asia-Pacific alone, we consume 116 million tonnes of meat annually – that is a gigantic number. To produce 25 million tonnes of anything for any company is a huge task. I think none of the brands in the plant-based industry is producing anywhere close to that volume yet.
Besides, food is largely about localising. People in Dongbei don’t eat the same thing as in Guangdong. Localisation is key. As the market that we’re referring to is about shifting consumer behaviour, or convincing people to reduce meat consumption, brands that have good products, good localisation strategy, good execution and good branding will have a role to play. There’s plenty of room for different players, both local and foreign.
How would you differentiate OmniPork from other plant-based meat brands?
There are a lot of plant-based products – some focus on beef, some on chicken, or other types of food. We in the foreseeable future will remain focused on pork meat because it is the most consumed meat in China and Asia by far. Of the 116 million tonnes of meat eaten in Asia-Pacific, 53 million tonnes is pork.
In China, pork makes up over 60% of all meat consumed. Another reason is our understanding of local preferences and local palettes. Take luncheon meat. People in Hong Kong, South Korea and in parts of Southeast Asia are obsessed with luncheon meat.
Also, we’ve been doing this for eight years. So clearly we’ve been a pioneer in this space, working on our product and our brand long before people started to talk more about it.
What are the magic ingredients of OmniPork?
There is non-GMO soy, pea protein and coconut oil in our mince product. In the non-GMO soy there is wheat, beetroot and coconut oil again. In terms of proprietary technology and blend, obviously that’s not something that we can share.
Our products are processed, otherwise you’d be eating beans or legumes. But I have to emphasise that we prefer our products to be non-GMO and as lightly processed as possible.
From a nutritional standpoint OmniPork’s recipe contains significantly lower calories and fat but at the same time high protein, high calcium and high iron.
Green Monday is an investor in Beyond Meat through its venture capital arm. But do you foresee the California-based brand being your competitor in the future?
Everyday at Green Common we’re showcasing Beyond Burger, Beyond Hotdogs, Beyond Sausage and other products. You can walk into a Green Common store right now and you will see Beyond Meat products everywhere. In fact they occupy rather a big space within our shops – both online and offline.
We started investing in Beyond Meat five years ago. The motivation was very simple. We see a lot of partnership opportunities and we are clearly mission-aligned. As I said, we’re going to do mostly Asian food, which is not their focus. Are there any overlaps? Maybe. But at the same time, would people confuse luncheon meat with sausage? Think of someone having a hotdog one day, a burger the next day, a pizza on the third day, and luncheon meat noodles on the fourth day.
What we want to create ultimately is a bigger space.
What else have you invested in?
We’re also an investor in Califia, which has a wide range of products from plant-based milk to yoghurt and butter. I’ve admired the company’s branding and R&D effort since its early days. Through investment, we can create a very synergistic partnership. Califia doesn’t have a team in Asia right now and Beyond Meat did not have a team in Asia until recently. There are a lot of things that we can do with them or on their behalf, such as helping communicate their brands correctly and making their offerings accessible. So Green Monday Ventures serves as an investment arm on the one hand, and also to anchor strategic partnerships on the other hand.
Does your venture team focus more on brands than the technology behind them?
We are very open-minded. We’re constantly looking for and approached by companies. It’s a two-way process. Now it’s become pretty well-known that Green Monday has quite an extensive network across Asia, so we make quite a good partner to many of these brands, particularly foreign brands.
We could be a one-stop, turnkey partner for them. Not just for distribution but also for branding, marketing and strategy, product development feedback, localisation and potentially even production when we have our manufacturing facilities set up. There are just so many angles that we can help a brand.
What’s been the growth trajectory of Green Monday Holdings?
Year-on-year, or even compared with the beginning of this year, revenue has nearly quadrupled. We saw a spike in sales between March and April when Covid pushed more people to cook at home. We saw another spike between August and September when we launched our new product, the OmniPork luncheon meat.
And a broader and deeper product line and more distribution points have also been major factors behind our growth. It also helps that Covid has got more people to understand the food system crisis we’re facing.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.