SK Corp. Aims to Lead 'Sustainable Food' Alternative Market... Establishes 100 Billion Won Fund with Chinese Companies

[Asia Economy Reporter Kim Hyewon] SK Inc. is focusing on the alternative food market, which has emerged as a sustainable food source. The company is accelerating its efforts to secure a leading position in the alternative food market by establishing a partnership with Joyvio Group, a Chinese F&B distribution company, to proactively enter the world's largest food market, China, and by investing in the U.S. alternative protein company Natures Find.

On the 26th, SK Inc. announced that it signed a memorandum of understanding (MOU) for investment cooperation, including the establishment of a China alternative food investment fund, with Joyvio Group. Joyvio Group is an F&B distribution company established in 2012 by Legend Holdings and holds numerous number one brands in premium fruit and seafood sectors in China, Australia, and Chile.

SK Inc. and Joyvio Group plan to establish a 100 billion KRW-scale China alternative food investment fund and invest in companies producing alternative proteins such as plant-based alternative meat and fermented proteins. They will seek promising food tech companies based on advanced IT technologies for collaboration and jointly promote the entry of global alternative protein companies into China. The fund will be managed by ZRC, located in Zhongguancun, Beijing, China. Previously, in 2019, SK Inc. invested approximately 220 billion KRW in Joyvio Group together with a domestic private equity fund.

Alternative foods are made from proteins extracted mainly from plants such as soybeans and mushrooms or developed using advanced microbial fermentation technology, instead of traditional animal-based livestock farming methods. Alternative proteins, which are leading the growth of the alternative food market, realize protein through innovative technology without large-scale animal farming, contributing to solving social issues such as reducing carbon emissions from livestock farming and food safety. This sector is also gaining attention as an ESG (Environmental, Social, and Governance) investment. Global institutional investors such as BlackRock and Temasek are also interested in and investing in this field as part of their ESG investment strategies.

SK Inc. Investment Status in the Alternative Protein Sector

SK Inc.'s strategy is to invest in promising food tech companies with innovative technologies in early markets such as Asia, as well as leading markets like the U.S. and the U.K., and to target the Asian alternative food market through partnerships with leading food companies and investors in major Asian countries.

SK Inc. took its first step into the alternative food market last year by investing about 54 billion KRW in Perfect Day, a U.S. fermented protein company. Founded in 2014 in San Francisco, Perfect Day is a leader in the alternative fermented dairy protein field and succeeded in producing fermented dairy protein using protein genes extracted from cows for the first time in the world in 2019. It currently supplies raw materials to the U.S. premium ice cream brand Graeter's.

Recently, SK Inc. also invested about 29 billion KRW in Natures Find, a U.S. alternative protein developer, expanding its business scope in the U.S. alternative food market. Natures Find succeeded in developing nutrient-rich alternative protein raw materials using microorganisms discovered in Yellowstone National Park and its proprietary fermentation technology.

In Europe, SK Inc. is pursuing investment in Meatris Farm, a U.K. alternative meat producer that has gained significant attention, and plans to continuously expand its portfolio in the plant-based alternative meat sector as well as fermented proteins in major global markets.

According to Eggfunders, a U.S. food tech specialized venture capital, global investments related to alternative foods have grown 20-fold from about 130 billion KRW in 2016 to 2.6 trillion KRW last year.