October 31, 2023

photo credit: DAIZ

By Lynda Kiernan-Stone, Global AgInvesting Media

Japanese plant-based meat company DAIZ has closed on a ¥7.1billion ($47 million) Series C through a combination of loan agreements with the Ministry of Economy, Trade and Industry and the Ministry of Agriculture, Forestry and Fisheries and equity financing from a range of backers.

The completion of this financing brought the total capital raised by the company to ¥13.1 billion (about US$86.5 million) – the largest amount in Japan’s domestic food tech industry. 

“We would like to express our sincere gratitude to all the operating companies, investors, and financial institutions that participated in this DAIZ financing,” expressed the company in a statement.

The company explained that it intends to use the capital from this round to build a new 40,000-square-foot plant in the Kumamoto Rinku Techno Park for the production of its plant-based  “Miracle Meat”.  

Scheduled to launch in February 2025, this plant will be the largest plant-based meat factory in the country with output capacity of 8,000 tons for its first year of operation, eventually expanding to output of 20,000 tons per year. 

DAIZ explained that the plant-based meat industry is entering its “hybrid strategy” following a “first phase” where people were eating plant-based meat instead of animal meat. Now, consumers are combining animal protein with plant-based proteins in their diets. 

Advocating for this “hybrid strategy” DAIZ is looking to expand its markets by supplying miracle meat to a range of companies in both the domestic and international retail, distribution, food manufacturing, and restaurant industries. 

Employing Ochiai, its proprietary high-pressure technology, DAIZ processes germinated soybeans with higher levels of amino acids and active enzymes for improved texture and flavor without the use of additives. It processes these soybeans into what it calls “miracle chips”, which are then used as the foundation for the production of plant-based meats and fish. 

In a show of confidence in this strategy, DAIZ has received backing from 33 companies, including 17 listed companies to-date, and is partnering with major players such as France’s Roquette to produce a pea-based version of its Miracle Meat, and eventually a Miracle Egg product. 

A Foundation in Familiarity

Plant-based foods are experiencing a significant boom in Japan, and one of the key drivers behind this trend is the country’s long-standing familiarity with soybean-based products such as tofu, miso, and edamame, among others. 

This familiarity with soy-based products combined with evolving dietary preferences, greater health consciousness, environmental concerns, and government support, has led to a significant increase in the popularity of plant-based foods in the country. Further, the country’s deeply rooted culinary tradition, coupled with its willingness to innovate and adapt, has made it a thriving market for plant-based alternatives with the potential to extend beyond soy-based options.

In 2019, the Japan Meat Information Center conducted a survey that found that a minimum of 50 percent of the respondents were aware of meat alternatives, with nearly 60 percent responding that they were open to consuming plant-based meats for the benefit of their health and the planet. 

Another survey focused on just soy-based meat products found that consumer awareness exceeded 70 percent, and by August 2020, at least 25 percent had tasted a meat alternative at least one time.

These numbers reflect how not only Japan, but the wider Asia-Pacific region, is being identified as the fastest growing market for meat alternatives with an anticipated CAGR of 9.4 percent to 2025. 

In 2021 the Japanese government also relaxed its regulations regarding labeling for plant-based food packaging, opening the door for the expansion of the vegan market. Combined with positive consumer sentiment and its financial backing, DAIZ is well-positioned to capitalize on the potential before it. 

“New industries are born from the margins of regulation, and by using the financing systems of the Ministry of Economy, Trade and Industry and the Ministry of Agriculture, Forestry and Fisheries, we will be able to procure long-term corporate loans at a low cost, which is unusual for startups,” said Tatsuya Koitabashi, director and CFO, DAIZ Corporation. “I think we have succeeded.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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