Where’s the Brie: Can High End Vegan Cheese Grow the Category?

Vegan cheese has long been associated with highly-processed, non-fermented oil-starch-flavor concoctions that are emulsified and solidified. They could suffice as a cheese substitute, although they hardly represent an authentic cheese experience. But artisan iterations have emerged within the plant-based cheese category, with cave-aged, ripened plant-based products becoming increasingly available.

Those products face a conundrum, one that’s similar to the issues facing the plant-based meat business as it looks to move beyond nuggets and burgers to whole-cut analogues. For real cheese fans, to paraphrase the Wendy’s commercial, the question is “where’s the Brie?”

According to a report from Grand View Research, the plant-based cheese market is currently valued at $2.75 billion and expected to grow 12.6% to $7.1 billion by 2030. A report from the Food Industry Association (FMI) found that younger generations are increasingly adopting plant-based lifestyles and putting more effort into selecting more sustainable, ethically sourced and nutrient dense, plant-based foods.

So what’s the role of these products, given that slices and shreds still lead sales in the category? One thought is that it creates a top end to that category, a place where both manufacturers and consumers alike can imagine the possibilities of the product.

“Premium products, while aspirational for some, allow shoppers the chance to play with the pros and influencers alike,” explained Rob Leichman, founder and CEO of The Lyric Group. “Think farmstead cheeses, small batch charcuterie, single origin chocolates, or simply a premium functional beverage – these products can provide both a sense of indulgence and belonging to a special club.”

The Beginning

Nearly a decade ago, two companies aimed to revolutionize the category. Miyoko’s Creamery debuted with a line of cashew-based vegan cheese wheels containing live, plant-based cultures and made it to shelves after being aged like their conventional counterparts. Only a year prior to Miyoko’s launch, Kite Hill created a lineup of almond-based fermented soft cheese analogues made with traditional cheese making techniques.

Both garnered millions of dollars in investment even in their early years, and picked up the support of key giants like Whole Foods Market and General Mills along the way. However, the category has not seen any major players truly take stake in the cultured and aged plant-based cheese space since.

That’s starting to change a bit, however.

Last year Canadian retailer Organic Garage acquired plant-based ripened brie maker Future of Cheese, saying it sees the deal as a “significant growth opportunity” to help scale its retail arm. For Future of Cheese, the direct retailer relationship has enabled it to test new SKUs and gauge immediate consumer interest, said the brand’s president, Jen Wojtaszek. Just last week Bandit, formerly known as Conscious Cultures, announced it had raised $1.5 million to scale production of its six-SKU cave-aged vegan cheese lineup.

Still, while plenty of other brands have worked to elevate the category, holding their plant-based concoctions to the same standard as dairy-based cheese, and adapting traditional cheesemaking techniques to do so, none have yet to achieve the scale or support of their two prominent predecessors.

What is challenging growth?

Scaling any artisan cheese business, dairy-based or not, takes a level of resources that can be extremely challenging for many small-batch producers to secure, including consistent raw materials and infrastructure for cold-chain distribution. Within the plant-based space, availability of vegan cultures has also posed problems. In the early days of Miyoko’s, homemade vegan cultures were their only mode of cheesemaking and still today, wildCREAMERY, sister brand to fermented food company wildBRINE, said it still creates all of its own cheese cultures in house.

According to the founder of artisan vegan cheese brand RIND, Dina DiCenso, the availability of vegan-based cultures has been a “limiting factor” to its growth; in response, it has since partnered with a biotech company in order to develop its own custom cultures.

“Even with vegan cultures available, you’ll see other companies offering aged ‘vegan’ cheeses out there that are being inoculated with cultures actually grown on dairy,” said DiCenso. “In contrast, all of our cultures are certified vegan… Options for plant-based cultures are definitely increasing — dairy supply companies are starting to see where their future cash flows will be coming from and stepping up to meet the demand… [but] the cultures are slow to catch up with innovation.”

RIND’s proprietary vegan cultures won’t make it into products until 2023. It has still managed to innovate and grow, but has faced other challenges to scaling up, including co-manufacturing operations. DiCenso said currently all the aging caves are geared for dairy cheese, which presents issues for cross-contamination. To overcome this limitation, RIND expanded into its own cheese “BAT cave,” located at the Brooklyn Army Terminal, late last year.

Consumer demand for sustainable foods has given RIND plenty of room to continue expanding beyond the typical cashew and coconut-based cheeses, DiCenso said. Those products currently account for more than one-third of the market, but the company has hopes for a new line of cheeses made wholly from vegetables.

“We established ourselves with our aged cheese products… but it’s our ability to innovate and continue expanding the plant-based cheese category that really sets us apart,” explained DiCenso. “We recently launched the first product in our new vegetable-based cheese line — carrot cheese. It’s the first of its kind. We created a whole new category within the plant-based cheese space using upcycled vegetables.”

What’s next?

Brands, investors and retailers within the space see the growth potential and whitespace to be filled, but also seem to agree that the strategy for success doesn’t align with the typical approach of widespread distribution at large retailers. For RIND, its recent placement in the artisanal cheese case of select NYC-area Whole Foods and Fairway stores marked a significant milestone in the brand’s growth, but that makes it an outlier in the broader market.

“We were the first plant-based cheese to grace [Whole Foods’] artisanal cheese case. It’s been so successful they rolled us out to five more locations in NYC,” said DiCenso. “Both Whole Foods and Fairway have a highly curated selection of plant-based cheeses, so it’s a real honor to be featured front-and-center in the dairy cases of those stores.”

Will they be joined by others? It’s an interesting test case for Whole Foods.

Meanwhile, as an alternative to mainstream retail, many small batch vegan cheese brands have found a niche in specialty shops like Riverdel Cheese in New York City and Rebel Cheese in Austin, Texas – including the likes of The Uncreamery, RIND and Bandit. These shops sell large wheels to be sliced and packaged as they are purchased, rather than adding operational costs for the brand like individual packaging and wider distribution costs. The specialty route is an oft-taken one for brands that might have slower turns due to a greater need for consumer education, but without velocities, the high-end plant based products may remain mired in a niche.

Merchandising strategy has become a consistent dilemma for plant-based alternatives, and cheese is no exception. According to a report from FMI, consumers prefer to find their alt-dairy products alongside conventional dairy, but for meats and some other items, they prefer the products be merchandised in a designated plant-based food section.

And that attempt to mainstream the products prematurely might be a barrier to the category overall. As vegan cheese brands look to scale up, taste will continue to be a barrier to widespread market acceptance – but high quality and great taste is often expensive and needs a lot of in-store support.

“At the brand level, it’s those emerging premium companies that are at the forefront of trend creation,” said Leichman. “What might have once been a category-differentiated premium flavor profile – think dulce de leche – can now be found in value brands across many categories. More recently, on-trend premium ethnic brands in the condiment aisle have helped increase category visibility and product discovery – a win for all.”

The rub is also summed up – perhaps unintentionally – by Brad Pruente, a partner at Prime Movers Labs, a tech-focused investment firm that led Bandit’s recent fundraising round. Taste and cost are two important criteria when Prime Movers looks for a new investment, Pruente said. But in order for the market to realize its full potential and capitalize on the benefits of moving away from an animal-agriculture-based food system, the products within the space must be cost-competitive.

“The wonderful and awful part of our food system is its industrial scale,” said Pruente. “It makes food cheap and accessible, but it also means that its externalities are equally industrial-sized. Fundamentally, dairy is a huge market and is eaten all over the world, so “better cheese” would be a huge market.”