Although many of his peers have hesitated to venture into the plant-based segment, Bill Graham highlighted that there are compelling reasons for Bel Group’s significant investment in plant-based cheese. Founded in France in 1865, Bel Group is renowned for its unique snacking cheeses, such as The Laughing Cow wedges, Babybel rounds with wax coating, and Boursin spreads. Last March, the company acquired a majority stake in French plant-based firm All in Foods, which specializes in vegan cheese alternatives in Europe. By October, Bel committed to developing a plant-based variant for each of its flagship brands, unveiling its first product: Boursin Dairy-Free Cheese Spread Alternative with Garlic & Herbs. In January, they introduced Laughing Cow Blends wedges, combining their classic dairy cheese with proteins derived from chickpeas, lentils, or red beans.
According to Graham, the CEO of Bel Brands USA, the rationale behind this strategic pivot is straightforward. “We at Bel see this as a massive opportunity,” he stated. “We believe this category could surpass $1 billion by the end of 2025. We also think we are uniquely positioned to deliver value and address unmet consumer needs in this space. We feel prepared to assist our customers in expanding this category. This isn’t merely a trend for us; it’s an intentional aspect of our business model and strategy.”
The potential within the plant-based cheese market is evident. As per SPINS data, plant-based cheese currently accounts for roughly 3% of the $34.3 billion cheese market. This segment has been welcoming to newcomers, with various startups launching new brands, including Violife, Parmela Creamery, Good Planet, Loca Food, and Vevan, alongside established leaders like Daiya, Follow Your Heart, Field Roast, Kite Hill, and Miyoko’s Creamery. Notably, prominent plant-based brands like Tofurky’s Moocho line, Danone’s So Delicious, and Forager Project, a plant-based yogurt maker, have also entered this market.
Despite the intense competition, a commonality among most players is that they do not produce traditional dairy cheese as a primary product—Bel Group being a significant exception. There are several reasons for this. While the processes may be similar, crafting a delicious plant-based cheese with the desired mouthfeel and melting properties is challenging. Additionally, sales of dairy-based cheese continue to rise; in 2020, dairy cheese sales increased by 21.2% in natural and multi-outlet grocery stores and by 24.5% in regional grocery stores, as reported by SPINS.
Matt Gibson, co-founder and CEO of New Culture Foods, noted that this ongoing growth in dairy cheese sales is unusual within the dairy sector, where other products are struggling to gain market share. New Culture Foods, based in California, creates dairy proteins through fermentation to produce authentic cheese without using animal products. Many traditional cheese companies have explored the plant-based segment and opted out, concluding that it wasn’t worth the investment. “The current methods for making plant-based cheese do not provide the necessary functional properties to satisfy their customers,” Gibson explained. “They simply decide not to allocate further resources to a product they deem inadequate.”
Gibson and others believe that the future of plant-based cheese is bright, with many claiming their products can now compete with dairy cheese—and improvements are ongoing. As more consumers adopt flexitarian diets, incorporating more plant-based options while still enjoying traditional meat, dairy, and eggs, the demand for high-quality plant-based cheese options will only increase. “Consumers will choose,” said Domenic Borrelli, president of plant-based foods and beverages at Danone North America. “Their preferences are entirely up to them. Our role is to provide a diverse range of quality plant-based options to make their choices as straightforward as possible.”
Historically, plant-based cheese has been viewed as inferior to its dairy counterparts, lacking in appearance, flavor, aroma, texture, and melting ability. Research from Numerator revealed that 22% of potential plant-based cheese customers doubt the taste of these products, according to Borrelli. However, shortages during the COVID-19 pandemic, caused by consumer hoarding and production challenges, altered this perception. Many consumers, unable to find their preferred cheese, turned to plant-based alternatives and found them satisfactory, increasing their likelihood of repurchase.
Crumpton noted that this shift speaks volumes about the advancements made by plant-based cheese producers over the years. “This places a responsibility on plant-based dairy producers to continue innovating, reducing barriers even further,” he said, ensuring they create products that consumers would struggle to differentiate in a blind taste test.
Bel Brands recognizes these challenges and faces an even greater hurdle, according to Graham. The company is not merely introducing a new product but is reimagining well-loved traditional cheeses in plant-based and hybrid forms. “We understand what success looks like based on consumer expectations because they communicate them to us,” Graham remarked. “However, given the trust consumers place in our brand and their expectations of quality, the standards are exceptionally high. We must exert extra effort to ensure our plant-based offerings meet those expectations.”
Bel’s lengthy history in the cheese sector grants it credibility and trust among consumers who may be hesitant to try plant-based cheese. The company’s experienced manufacturing and R&D teams are equipped to tackle challenges and enhance product quality.
Danone has substantial experience bridging the taste gap between dairy and plant-based products. Borrelli emphasized that the primary concern for any dairy alternative—be it plant-based milk, yogurt, or ice cream—is that it must taste as good as its dairy counterparts. Danone is focused on improving the taste and physical properties of its alternative products, including ensuring excellent melt performance for its So Delicious cheese.
Consumers are also seeking variety, a critical element of Danone’s business strategy. “Dairy cheese has been the most challenging category from a consumer standpoint. People love their dairy cheese,” Borrelli noted. “We recognized the opportunity to delight consumers with a fantastic product that meets their expectations.”
Danone has conducted extensive consumer testing on So Delicious cheese, launching the line under a well-known brand name. They have also partnered with cookbook author Ayesha Curry to demonstrate how So Delicious can be incorporated into traditional recipes, encouraging curious consumers to try plant-based cheese.
With a proliferation of plant-based cheese products entering the market, product quality has had to improve. David Israel, founder and co-CEO of Good Planet Foods, stated that companies already in the plant-based space aren’t struggling with execution. “Some of the largest cheese manufacturers have sent us samples, and I’m astonished by how far they are from replicating cheese-like qualities,” Israel said. “The learning curve they face is different from their historical practices.”
Despite significant progress, plant-based cheese often lacks the function, taste, and texture of dairy counterparts. Gibson founded New Culture to address these gaps, emphasizing the importance of dairy proteins. “To create a cheese that traditional dairy consumers can seamlessly transition to, we absolutely need dairy proteins,” Gibson explained.
New Culture generates dairy proteins from plant-based sources using microbial fermentation. After cultivating these proteins, they incorporate other plant ingredients—such as sugars and additional proteins—to create a milk-like base suitable for traditional cheesemaking. Gibson refers to New Culture’s product, which is still in R&D, as “animal-free dairy cheese,” with an anticipated market launch this year.
As consumers become increasingly health-conscious and environmentally aware, many are turning to plant-based cheese. However, their grocery store choices are primarily driven by taste and price—areas where plant-based cheese often struggles to compete. According to Gibson, fermented dairy providers like New Culture may ultimately succeed in this market once they achieve the necessary scale.
“They’re the only ones capable of competing on taste, and with a favorable trajectory, they could also compete on price,” Gibson asserted.
Israel, who previously founded the snack brand Pop Gourmet, sought a new venture after leaving the business in 2018. Despite lacking a background in food science, he recognized that plant-based eating was emerging as a significant trend, with ample room for innovation in cheese. Israel discovered a Greek company producing cheese from plant-based ingredients. After sampling their product, he noted the texture and melt were excellent, although the flavor was lacking. He persuaded the company—whose name he cannot disclose due to a business agreement—to collaborate with him, resulting in a line of popular cheeses, including American, mozzarella, and cheddar, while conducting thorough consumer research on the plant-based cheese market.
“I built a brand around the entire concept to connect with consumers—Gen X, Gen Z, and millennials—all seeking products that are beneficial for their health and the planet,” Israel explained. “We developed some of the most delightful, meltable, and flavorful cheeses in the category.”
Good Planet, launched in 2018, has thrived in the market, often reporting double-digit sales growth shortly after entering new stores. Israel’s company recently secured $12 million in funding, one of the largest rounds for a plant-based cheese startup.
Many other startups entering the plant-based cheese market share Israel’s optimistic outlook, viewing it as a category ripe with opportunity. The landscape appears open, with plant-based eating appealing to a broad consumer base, including traditional vegetarians and those who occasionally opt for plant-based burgers. “We’re not here to eliminate the dairy industry,” Israel clarified. “While we aim to benefit the environment and consumer health, there’s room for everyone.”
Crumpton, an analyst at SPINS, noted that it’s common for startups to flood emerging categories that have seen recent innovations. Companies are keen to improve products or introduce unique twists to differentiate their offerings. However, many plant-based cheese brands remain small, with only ten brands exceeding $1 million in sales last year, according to SPINS data. The leading players in the category are still established brands like Daiya, Follow Your Heart, and private label products.
Danone has been transitioning into a comprehensive provider of dairy and alternatives for some time. In 2017, the company acquired plant-based dairy leader WhiteWave Foods, working to solidify and expand its market presence in this sector. In 2018, Danone aimed to triple its plant-based sales to €5 billion (approximately $5.7 billion) by 2025. By the third quarter of 2020, Danone held a 41% market share in plant-based offerings, according to IRI data. Its latest earnings report indicated that 10% of Danone’s total sales stem from plant-based products, with plant-based brand sales growing 15% last year, primarily driven by milk, yogurt, frozen desserts, and creamers. Until recently, Danone had no presence in plant-based cheese, but in January, the company announced the launch of dairy-free shredded and sliced cheeses under the So Delicious brand, followed by its acquisition of plant-based cheese leader Follow Your Heart in February.
“We see tremendous growth potential in plant-based cheese, and with the introduction of So Delicious, we are excited to offer a product that will reshape consumer perceptions of plant-based cheese alternatives,” Borrelli remarked.
Danone has focused on developing plant-based cheese for several years, aiming to harness opportunities for significant growth. Delivering a product with the right taste, texture, and melting properties could yield substantial rewards. The development of So Delicious cheese allowed Danone to combine expertise in plant-based food with its knowledge of organic cheese production, enabling them to create a product that meets consumer expectations for taste and texture.
The acquisition of Follow Your Heart also provides Danone with greater opportunities for growth and expansion within the plant-based cheese sector. The 51-year-old company boasts a range of leading products in the plant-based category, from shredded and sliced cheese to its Vegenaise spread. Co-founder and CEO Bob Goldberg highlighted two key factors that influenced the decision to sell to Danone: its status as the world’s largest B Corp and its commitment to transparency and sustainability, aligning with Follow Your Heart’s mission. Additionally, Danone’s public pledge to triple its plant-based product sales by 2025 played a significant role. “That’s a significant commitment, which means more plant-based products will be available globally for consumers,” Goldberg stated. “In my view, every time someone chooses a plant-based item over an animal-based product, that’s progress.”
Tillamook, a well-established brand under the Tillamook County Creamery Association for over 112 years, has been a prominent player in the dairy cheese sector. Currently, the company isn’t involved in the plant-based market, but Executive Vice President of Brand Joe Prewett expressed openness to considering new innovations that disrupt the market. While Tillamook has built its reputation on traditional dairy products, Prewett maintains a neutral stance toward plant-based alternatives, viewing them as healthy competition that diversifies the options available within the dairy segment. “I don’t think there’s a close substitute for the product experience and nutritional impact of Tillamook cheese in today’s market,” Prewett stated. “However, I wouldn’t be surprised if a product like that is developed in the future.”
The traditional dairy industry has largely opposed plant-based products, striving to protect the identity of its offerings. The American Cheese Society, representing producers, sellers, and enthusiasts of artisan and specialty cheeses in the Americas, advocates for restricting the term “cheese” to dairy-based products. In 2019, the organization petitioned the FDA to enforce labeling regulations preventing the use of terms like “milk” and “cheese” for non-dairy products—an initiative that the federal agency has yet to act on.
Furthermore, the dairy sector faces a challenge in combating consumer perceptions that plant-based products are healthier—a belief not always substantiated by nutritional data. Dairy products generally contain higher protein levels, giving traditional cheese a superior nutritional profile. Consequently, plant-based cheese manufacturers must enhance their products by adding nutrients, including protein. However, a 2018 study commissioned by the Wisconsin Cheese Makers Association revealed that over a third of consumers believed plant-based cheese contained protein, and 21% thought it was of higher quality than dairy protein. Additionally, a quarter of consumers thought plant-based cheese products were low in calories and fat, free of additives—a claim not universally accurate.
Prewett does not harbor significant concerns regarding misconceptions impacting Tillamook’s sales. He believes that the truth will eventually prevail, noting that consumer interest in conventional cheese remains robust. In fact, Tillamook experienced double-digit growth in cheese sales during the pandemic, fueling the company’s expansion.
Despite the surge in plant-based cheese and the influx of new companies, Tillamook is not actively pursuing success in this market segment. While there is pressure on dairy companies to adapt to the growing plant-based trend, Prewett feels it is less pronounced in cheese. People generally consume cheese for its flavor and indulgence, making it challenging to create a successful plant-based alternative that satisfies these desires. Tillamook may consider entering the plant-based cheese market in the future if they can develop a product that genuinely surprises and delights consumers. “We aren’t adversarial toward healthy products that appeal to consumers; I recognize that this narrative exists in the market,” he said. “However, I believe we must adopt a progressive approach, understanding consumer preferences, and create exceptional products for them.”
While Bel Brands is making significant strides in the plant-based cheese segment, Graham emphasizes that the dairy cheese sector remains crucial. The company has invested in enhancing the packaging and flavor of its The Laughing Cow brand, which is celebrating its 100th anniversary this year, and has seen solid double-digit sales growth recently. They are also focusing on improving functionality and ingredients in their cheeses, incorporating trendy additions like probiotics, which have contributed to increased sales.
At present, approximately 85% of Bel Brands’ portfolio consists of dairy products, while 15% is plant-based. Graham noted that the company, which also owns the Go-Go Squeez fruit brand, aims to achieve a more balanced ratio of 50-50 between the two segments. “It’s not going to be perfectly balanced because we’re losing households in dairy,” Graham explained. “On the contrary, we expect continued growth. However, it will primarily stem from the acceleration and acquisition of households in the plant-based and fruit categories.”
Industry experts and analysts project that the plant-based cheese segment will continue to expand in the coming years, although the extent of this growth and the driving forces behind it remain uncertain. Prewett from Tillamook believes that, in five years, the cheese case will resemble its current state, with a few additional plant-based options, most likely confined to specific market segments—similar to the plant-based meat sector, which primarily consists of ground and nugget formats.
Crumpton from SPINS anticipates that plant-based cheese manufacturers will branch out into more artisanal and craft varieties. While some plant-based feta options are available, he wouldn’t be surprised to see more complex and distinctive cheeses, such as Asiago and Limburger, introduced to the market. Additionally, he recognizes that plant-based cheese is starting to extend beyond traditional dairy aisles, with better-for-you frozen pizzas and snacks incorporating plant-based cheeses into their products. “Although plant-based cheese is exceptionally popular, its influence is now permeating other areas of the store, with a growing array of products taking advantage of this trend.”
In the next five years, Gibson from New Culture expects his company to undergo significant changes, including launching products and transforming dairy-alternative cheeses. However, he cautions that substantial developments may take time. “Keep in mind that dairy cheese is the only dairy product in the U.S. that is experiencing market growth and increased consumption,” he remarked. “A revolution in this space will require time… In five years, plant-based cheese is likely to capture a meaningful market share while companies like New Culture strive to achieve the massive volumes needed to significantly shift the balance in favor of animal-free products.”
New Culture’s trajectory may not solely be about its own success in five years. A substantial boost for the company occurred in 2019, when Kraft Heinz’s VC arm, Evolv Ventures, led a $3.5 million seed funding round. Gibson refrained from discussing specifics about the partnership but noted that both parties have been collaborating closely. Kraft Foods, which originated as a cheese company in 1903, recognizes the changing landscape of consumer preferences. “It’s a mutually beneficial relationship, with both sides acknowledging their capacity to assist one another,” Gibson concluded.
In the near future, Crumpton anticipates that the majority of new plant-based cheese offerings will come from major brands, likely through mergers and acquisitions. While the current growth rates for plant-based cheese may slow as the segment expands, he predicts it could achieve a 10% to 12% share of the market. However, he notes that this could vary based on advancements in food science and sustainability concerns regarding the animal-based dairy sector. “If the R&D efforts continue to innovate, we will see even greater momentum,” he stated. “Additionally, if we experience a significant drop in supply in the animal sector due to rising temperatures and global warming, that may further promote the growth of plant-based alternatives.”
In this evolving landscape, one crucial aspect that could enhance plant-based cheese’s appeal is the inclusion of calcium citrate—a compound that not only improves the texture and melting properties of plant-based cheeses but also boosts their nutritional profile. As consumer demand for healthier and more sustainable options rises, the integration of calcium citrate could help bridge the gap between plant-based and dairy cheese, making the former a more attractive choice for a broader audience.