Proterra Asia is the Asian arm of the private equity fund manager for food and agri-businesses Proterra Investment Partners.
With these moves, the group is capitalizing on accelerating consumer demand from urban populations and the emergence of a new generation of consumers looking for safe, high-quality and sustainable food products.
“The recent completion of our investments in the oat milk brand and Simple Love is aligned with our strategy to focus on the fastest-growing sub-sectors within the food sector in Asia,” says Tai Lin, managing partner of Proterra Asia.
‘“Asia is forecasted to double its annual spend on food from US$4 trillion in 2020 to US$8 trillion by 2030.”
The plant-based milk sector is expanding rapidly in Asia and is forecast to become a US$12.3 billion market by 2024, with oat milk the fastest-growing category, Proterra Asia reports.
The first investment is in a newly established oat milk business out of Singapore and Indonesia with a product that has been “developed with the Asian consumer in mind.”
Proterra Asia is the lead investor in this company, which the team believes has the opportunity to become a major oat milk brand in Asia, alongside current global market heavyweight Oatly.
In February, Oatly announced plans to go public by filing for an IPO in the US, backed by celebrities such as Oprah Winfrey and Jay Z.
One month later, Yeo Hiap Seng, a plant-based manufacturer said it would produce Oatly’s dairy alternatives from its Singapore factory. Yeo and Oatly jointly invested US$30 million toward the investment of equipment and facility.
“The rise of the Asian consumer continues to present exciting thematic trends in premiumization, health and nutrition and sustainability given rapid urbanization, a growing middle class, and the evolving consumption patterns of Millennials and Gen-Zs,” adds Tai Lin.
Yogurt in demand
The second investment is in Simple Love (also known as Jian Ai), a premium fresh yogurt brand in China.
Simple Love is a fast-growing fresh yogurt brand in China, focusing on the premium low-temperature segment.
The business has grown to 2 percent market share (6th largest) in China, with sales growing at a compound annual growth rate of 109 percent over the past five years based on the company’s sales data.
Proterra Asia invested in Simple Love, which recently raised 800 million yuan (US$124 million).
Proterra Asia facilitated the implementation of the company’s upstream raw milk supply strategy in partnership with the leading dairy producer in China and will continue to assist through a seat on the board of the company’s upstream subsidiary.
Simple Love’s products are being distributed in nearly all provinces across China.
The company has completed the construction of its new production facility in Hebei Province with 11 production lines and a total capacity of 500 metric tons per day.
Sustainable future food
Proterra Asia’s investments support the elevation of standards in the Asian food sector and build food infrastructure across Asia.
Its investment philosophy supports six of the United Nations’ Sustainable Development Goals by providing access to more sustainable protein sources, creating jobs and positively impacting local communities, such as smallholder farmers.
“As sector specialists with an extensive pan-Asian network, we have been building Proterra’s relationships, expertise, and resources in the region and industry for well over a decade. We believe this level of focus positions us to effectively identify and partner with businesses with outsized growth potential.”
“Our approach sees us being more than just a passive shareholder in businesses, but also as a driver of progressive change. Our goal is to continue to invest in the sustainable future of food in Asia,” concludes Tai Lin.
The two transactions follow Proterra Asia’s previously announced partnership with a leading alternative protein company to build a large-scale plant protein extraction facility in Singapore to meet the growing demand across Asia for the plant-based egg product Just Egg.
Last May, Just Egg partnered with Emsland to scale up its processing plant as it expands its footprint worldwide.
Proterra Asia has also partnered with the global investment business, Fidante Partners, to provide access to European capital formation opportunities.