Kraft Heinz launches plant-based cheese slices through NotCo joint venture

Dive Brief:

• Kraft Heinz and NotCo are launching NotCheese, a plant-based version of the iconic Kraft American cheese, CEO Miguel Patricio said in prepared remarks with Kraft Heinz’s quarterly earnings report Wednesday.
• NotCheese will be available in early November at about 30 Giant Eagle stores in the Cleveland area, Bloomberg reported. A national rollout is planned next year, according to the news service.
• This is the first product from the joint venture between the CPG giant and the artificial-intelligence-powered company that creates plant-based alternatives. While Kraft Heinz has a massive portfolio, it has historically had a relatively small presence in the plant-based alternatives segment.

Dive Insight:

By making its first product out of this joint venture one of Kraft Heinz’s signature offerings, the message is clear: The company is going all in on plant-based alternatives.

In the Q&A session with analysts, Patricio said Kraft NotCheese is “incredible.”

“It tastes like cheese, it smells like cheese and melts like cheese,” he said. “It is very different from everything that is in the market.”

According to Bloomberg, the main ingredients are water, coconut oil, modified corn starch and chickpea protein. They will come in American, provolone and cheddar varieties.

Plant-based cheese is a slowly growing category, though most of the players are startups that only make plant-based cheeses.

Like many products in the plant-based analog segment, plant-based cheese makers have had difficulties using plant ingredients to closely mimic the taste, texture, mouthfeel, melt and stretch of dairy cheese. In fact, according to SPINS statistics reported by Food Navigator, sliced and snack plant-based cheese dollar sales were down 5.8% during the 52 weeks before Sept. 4. Unit sales were also down 7% in that time frame.

With this launch, Kraft Heinz joins a relatively small group of traditional cheese companies getting into plant based. Bel Group currently has plant-based versions of its classic cheeses on the market, as well as Nurishh, a solely plant-based line. Earlier this year, Saputo launched its Vitalite dairy-free cheese line in the U.S. 

NotCo, a Chilean startup that reached unicorn status last year, has had international success with its AI-enabled products. NotCo has a powerful system it calls Giuseppe, which analyzes several data points about traditional food products, including taste, texture, smell and consumer sentiment. It then finds plant-based ingredients to mimic them.

In the U.S., the company’s NotMilk, NotBurger and NotChicken are available. Its largest portfolio is available in its home country of Chile, where consumers also can get NotMayo and NotIceCream. This is NotCo’s first foray into a cheese product.

According to Bloomberg, the joint venture with Kraft Heinz is working on a prototype on a more familiar turf for NotCo: plant-based mayonnaise. NotMayo was the company’s first product in Chile and cemented the company’s status, but it hasn’t yet come to the U.S. The joint venture’s mayonnaise product is slated to launch next year, Bloomberg reported.

In the meantime, it will be interesting to see how the joint venture’s NotCheese impacts the market.

After all, J.L. Kraft, the company’s founder, was the first to sell and popularize sliced American cheese. The Kraft branding on the plant-based version gives a lot of credence to what it is, as well as high standards to uphold. This could be a tacit stamp of approval that makes people more likely to try plant-based cheese.

But it isn’t necessarily surprising that the first product from this joint venture is cheese. After all, Kraft Heinz has been supporting food tech to change the cheese market for years. The CPG’s venture arm, Evolv Ventures, has twice invested in New Culture, a startup making animal-free casein in order to create plant-based cheese with its signature stretch.