A ve­gan cheese startup in­no­vates its way into Whole Foods

A Cal­i­for­nia startup em­ploys al­mond milk and French meth­ods “We had no choice but to go to the pre­mium mar­ket”

Bloomberg Businessweek (Asia) - - CONTENTS - Craig Giammona

If there’s a food that tests the willpower of ve­g­ans, it’s cheese. It’s de­li­cious and doesn’t scream “an­i­mal” the way a leg of lamb or chicken breast does. Plus, nondairy cheeses have long been sorry sub­sti­tutes; they’re mostly starch and oil mixed with ground-up nuts. Now comes Lyri­cal Foods, a Bay Area startup backed by Sil­i­con Val­ley cash, and its new-and-im­proved ve­gan cheese made with equip­ment im­ported from France and then aged in caves.

Lyri­cal’s Kite Hill line, which in­cludes ri­cotta and a truf­fle-and-dill-fla­vored soft cheese, was picked up by Whole Foods Mar­ket, a coup for a com­pany try­ing to prove its ve­gan cheese tastes like the real thing. “We have to match or ex­ceed the sen­sory plea­sure and value that cheese-lov­ing con­sumers get from con­ven­tional an­i­mal-de­rived cheeses,” says Dr. Pat Brown, a med­i­cal doc­tor and Stan­ford bio­chem­istry pro­fes­sor who’s a Lyri­cal co­founder. The “cheese­mak­ing world has been work­ing on this prob­lem for thou­sands of years.”

Reg­u­lar cheese is made us­ing ren­net, an en­zyme found in the stom­achs of cows and other mam­mals that causes milk to coag­u­late. The re­sult­ing curds are strained out, pressed, and aged to form cheese. Brown, a long­time ve­gan, spent a sab­bat­i­cal ex­per­i­ment­ing with a plant-based en­zyme that mim­ics ren­net when com­bined with al­mond milk. He then en­listed culi­nary ex­perts Tal Ron­nen and Monte Casino, who be­came co-founders, to re­fine the prod­uct.

The re­sults won over John Mackey, the co-chief ex­ec­u­tive of­fi­cer of Whole Foods, dur­ing a pri­vate taste test in 2012. Mackey says he was im­pressed with Kite Hill’s “rich fla­vor” and its abil­ity to grow a thick rind, just like milk-based cheese. That got Kite Hill’s line of cheeses on the shelves of about 430 Whole Foods stores across the U.S. by late 2014. They’ll soon be avail­able at Fresh Mar­ket, a gourmet gro­cery chain with about 185 lo­ca­tions, and could be in as many as 1,000 stores by the end of the year.

The five-year-old Hayward, Calif., com­pany logged sales of less than $10 mil­lion last year. But Whole Foods’ “bless­ing means a lot for this type of prod­uct,” says Kara Nielsen, a culi­nary trend an­a­lyst for Ster­ling-Rice Group, a brand­ing firm. “No other re­tailer has that kind of clout.”

Once the exclusive prov­ince of an­i­mal rights ac­tivists and strict di­eters, ve­g­an­ism has come into the spot­light in re­cent years, as celebri­ties such as Bill Clin­ton, Gwyneth Pal­trow, and Bey­oncé have spo­ken pub­licly about what they see as the health ben­e­fits of giv­ing up dairy. Still, that hasn’t trans­lated into an ex­plo­sion of ve­gan cheese sales: Nondairy prod­ucts ac­count for less than 1 per­cent of the $22.1 bil­lion U.S. cheese mar­ket.

Lyri­cal is bet­ting that’s about to change. Matthew Sade, the com­pany’s CEO, sees growth of plant-based cheese mir­ror­ing what’s hap­pened in the milk mar­ket. Sales of nondairy al­ter­na­tives, es­pe­cially al­mond and soy milk, have surged 54 per­cent since 2010 and now ac­count for 12 per­cent of the mar­ket, ac­cord­ing to re­searcher Euromon­i­tor In­ter­na­tional.

A 4-ounce con­tainer of Kite Hill’s soft ripened cheese—the com­pany sug­gests pair­ing it with grapes and chardon­nay— re­tails for about $10, a price com­pa­ra­ble to a pre­mium French Camem­bert or Brie, and far more than most shop­pers are will­ing to pay. “We had no choice

Ve­gan is “a back­handed way of say­ing it tastes like the sole of your shoe.” ——Matthew Sade, CEO, Lyri­cal Foods

but to go to the pre­mium mar­ket,” says Sade, a vet­eran of Star­bucks and Clorox. “I can’t put a $10 piece of cheese into a con­ven­tional re­tailer.”

Lyri­cal ex­pects the cost of mak­ing its cheeses to come down as it ramps up pro­duc­tion. That would al­low it to price some prod­ucts more com­pet­i­tively, so they might be car­ried by con­ven­tional gro­cers such as Kroger and Wal­mart

Stores. With that as­pi­ra­tion in mind, the com­pany has spurned the ve­gan la­bel, sens­ing it’s a turnoff for main­stream shop­pers. “It’s a back­handed way of say­ing it tastes like the sole of your shoe,” Sade says.

With Kite Hill, which also in­cludes cream cheese spreads, ravi­oli, and cheese­cake, the com­pany has stuck to soft cheese so far. But Casino says he dreams of us­ing al­mond milk to make hard cheeses such as Parme­san, Swiss, and ched­dar. That might be what it takes to win over av­er­age Amer­i­can palates, says Phoebe Connell, a cheese­mon­ger and chef who owns Lois, a wine bar in New York. “Give peo­ple some­thing they can put on a pizza,” she says, “and it will sell.”

The bot­tom line Lyri­cal Foods’ Kite Hill ve­gan cheeses have gained en­try into Whole Foods and as­pire to be in Wal­mart one day.

Soft cheese

Al­mond milk Kite Hill fac­tory

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