Founded in 2019, the firm launched Zrou, its first brand and product which takes the form of plant-based ground pork.
It currently has two B2B products (ground, mince), suitable for stir-fry and filling applications respectively, as well as four D2C products (minced, ground, lasagna, "Eight Treasure" bun) retailing online and offline.
The company’s initial focus is on B2B channels such as hotels, restaurants, resorts, schools and companies, targeting what it calls creators and early-adopters to help accelerate mainstream consumption of plant-based foods in China.
YouKuai’s founder Franklin Yao told FoodNavigator-Asia: “We believe that this (plant-based) is not a market that is going to hit its inflection point in the next three to five months, so we don't need to win this market in the next three to five months, it's maybe closer to three to five years.
“So, we have three to five years to establish ourselves in the market, and we have a strategy that's patient and persistent.”
It starts by developing a product that is attractive to consumers and build a strong following with an influential audience who can help bring this mainstream.
Yao likens this to Tesla’s business model.
“Tesla’s idea was to make a car that was sustainable and good for the environment. But that wasn't its marketing pitch and strategy to reach the mainstream consumer.”
Instead, it was marketing the performance and attractiveness of the car.
“You're buying Tesla because it performs really well when you're going from zero to 100, you're buying a Tesla because it is a sexy car, and something that signals the way you think about the world.
“But, Tesla wasn’t available for everybody at the beginning, whether from a price perspective or the long waitlist.
“That was Tesla 10 years ago, and now its mission of having a world where you don't have to burn fossil fuels in order to drive around is becoming quite apparent and possible.”
Watch the video to hear from Yao.
As the plant-based market builds up in China, there will be more players, but Yao is positioning its brand as a tasty, attractive, healthy and sustainable option, targeting the right customer and channels.
To do this, YouKuai’s initial focus is working with chefs, who are influential and decision makers in places like hotels, restaurants, resorts, school canteens, and corporate cafeterias across China.
Schools are an interesting channels, which Yao explained introducing its products will help raise more awareness around plant-based foods among students, who will eventually become future consumers themselves.
Currently, Zrou is served in over 100 outlets across China with over 2.7 million individuals engaged.
Zrou is also selling direct to consumers through its own WeChat store and other e-commerce platforms, with its base product Zrou (minced and ground) and two ready-to-eat products, a lasagna and bun.
By October, the company is hoping to retail at high-end grocery stores in addition to more e-commerce channels with more ready-to-eat products.
“The ready to eat and convenience aspect are important to making this product more mainstream. It can be heated up easily at home, and consumed as a regular meal, yet is plant-based and healthier,” Yao said.
Product development and technology
YouKuai is developing 10 to 12 products which it intends to launch this year in both trade and retail channels.
In the B2B channel, it will launch its ready-to-cook products including patties and meatballs.
Currently, Zrou’s products are made using the low moisture extrusion technology.
However, Yao said the technology is the least of concerns to consumers.
“Our point of view from the consumer perspective is that they're not interested in the technology. Selling something that claims to be the future of food, future meat or high-tech meat, I don't think that's attractive to consumers.
"I think food is associated with nostalgia and the feelings that you get from eating something in a particular scenario, so I think consumers choose foods based on their feelings and not the technology.”
Zrou’s products are made from non-GMO soybeans from Northeastern China, konjac from Hubei province, coconut oil from Hainan province, and shiitake mushroom from Fujian province.
Using natural ingredients will ultimately become a competitive advantage for Zrou globally.
And sourcing most of its ingredients from China also helps with its environmental footprint: “If we don't have to ship ingredients from across the world, that also makes this product more sustainable.”
Zrou is manufactured near Shanghai.
Series A round
Earlier in May 2021, YouKuai completed a US$7.3 million Series-A round.
The funds will be used to expand its distribution network across China.
Yao hopes to introduce Zrou to international markets and at the same time showcase China’s ingredients and products.
He is eyeing several markets for Zrou expansion next year, including South East Asia, Japan, North America, Europe, and South America.