John Kelly, CMO at Daiya, believes the outlook for plant-based cheese is “incredibly bright.” The dairy-free cheese producer’s newest alt-cheese innovation utilizes fermentation technology to mimic the texture and meltability of traditional dairy cheese.
In December 2023, Daiya’s “next generation” of cheese shreds, slices, and sticks hit shelves at grocery retailers nationwide.
Thus far, consumer response—be it from social media, product tests, or what’s happening in the market—is “a lot of excitement,” Kelly told The Food Institute. “We’re really happy about what we’re seeing so far.”
These product reformulations stem from the company’s multi-million-dollar investment in fermentation technology in March 2023.
While many brands in the category continue to incorporate oil-based ingredients and GMO techniques such as precision fermentation, Daiya chose to pursue proprietary vegan cultures and “age-old fermentation methods” to create their newest dairy-free cheeses.
“Whether that’s the way it tastes, or the way that it melts, this new technology that we’ve developed…really has enabled us to mimic that art of making cheese from a traditional dairy perspective,” said Kelly, adding that the process delivers “a much better product than what we have had in the past.”
Plant-Based Cheese Struggling in Retail Channels
The new recipe rollout comes amidst ongoing challenges for plant-based as higher average price points across the industry are compounded by broader inflationary pressure.
According to a recent grocery retail report by Circana, plant-based cheese is the fifth largest category among the 12 with plant-based presence in the dairy case. Meanwhile, cheese is the top performer in Circana’s traditional Dairy15 set.
The economic challenges surrounding dairy free cheese are exacerbated by consumer concerns surrounding the taste, texture, and ingredients used in many plant-based products.
During a recent presentation at Expo West 2024, however, panelists noted that 44% of American adults are willing to try plant-based products. They also agreed that connecting with this consumer set via trial and innovations in taste and price is key to moving the category forward.
Daiya appears to be doing just that by releasing a product that not only mimics the texture and meltability of traditional cheese, but also utilizes oats—a familiar ingredient among flexitarians.
“What we really are embarking on is trying to make our product accessible and appealing to a much broader audience,” Kelly said, adding that for any product to gain consumer approval, it’s got to taste great.
“That’s really the ultimate test.”
Walmart is also investing in plant-based cheese innovation. This week, the retailer announced its new private brand “bettergoods,” that includes plant-based options at a value price point. According to the company’s blog post, the line will feature a cheese alternative with “an incredible cheesy pull when melted for under $4.”
Foodservice is a Key “Gateway” for Trial
Earlier this month, Daiya also released its alt-cheese innovation for food service operators. As the press release notes, plant-based menu penetration has grown by 262% in the last four years.
Food service is “a great gateway” to encourage more consumer trials and move the adoption of dairy-free cheeses forward, says Kelly. “Getting to more locations where people can try the product and really taste the difference is key.”
According to research by MenuData, vegan cheeses are being integrated into a diverse range of dishes, including vegan burgers, salads, melts, cage-free omelets, wraps, vegan mac and cheese, and pizzas.
“Numerous pizza chains are now featuring menus with vegan cheese options including chains such as Fresh Brothers, Paxti’s Deep Dish Pizza, and Uno Pizzeria & Grill,” MenuData CEO Sunny Khamkar told The Food Institute. “A variety of appetizers, including potato skins, along with breadsticks and quesadillas, are [also] utilizing vegan cheese.”
In April, Daiya hit the road for a Dairy-Free Dairy tour to further encourage consumer trial. The company’s food truck will visit 190 cities across the U.S. and serve samples of its new product in grilled cheese sandwiches and quesadillas.
“We’re going literally coast to coast, and the reaction that we’re getting at these events when we pull up with our food truck is just phenomenal,” said Kelly.
The Food Institute Podcast
How does one jump from aerospace engineering into plant-based chicken nugget production? That’s exactly the leap that Christie Lagally, CEO & Founder of Rebellyous Foods, took in search of producing a healthier chicken nugget. Learn more about her company’s focus on animal welfare, environmental sustainability, and human health in this episode of The Food Institute Podcast.
