Philadelphia cream cheese brand launches plant-based product

Philadelphia Cream Cheese is introducing a non-dairy version of its signature spread.

The plant-based cream cheese is now available at grocery stores in Atlanta, Houston, Miami and other Southeast locations, with a broader rollout planned for summer 2023.

The new variety is made with coconut oil and fava bean protein, among other ingredients, and is designed to mimic the experience of eating traditional cream cheese.

Philadelphia non-dairy cream cheese has a suggested retail price of $6.49, compared to $4.57 for regular.

Brand owner Kraft Heinz has focused on driving growth by innovating its powerhouse products like Philadelphia, including rolling out plant-based alternatives where the company sees room for growth.

“Plant-based products have overtaken general categories across all dairy for some time now,” said John Crawford, vice president of customer insights for dairy at IRI.

But with consumers opting for more affordable options in the face of high food inflation and concerns of an impending recession, pricey dairy-free cream cheese may be a tough sell.

Robert Scott, president of R&D for Kraft Heinz, said it took the company about two years to create the plant-based Philly recipe.

The team focused on two main factors: making the product melt and spread easily on toasted bread or a warm waffle, and ensuring it tastes like a dairy product—even if it doesn’t quite pass for regular cottage cheese.

“Getting milky notes into a plant base is difficult,” Scott said, but he hopes consumers will notice buttery notes in the spread. “To get to the butter… that’s a hugely successful metric,” he said, acknowledging that dairy-free cream cheese “doesn’t match the taste of the existing product.”

Scott said that many customers are not getting what they want from the current line of plant-based cream cheese and that Philadelphia is offering a better alternative. According to IRI data, only around 41% of the families that buy vegetable curd make a second purchase in the year.

But Kraft isn’t the only company working to make a tastier cheese alternative.

“There’s a lot of work being done to try and improve the performance of plant-based cheese,” Crawford said, pointing to Babybel as another dairy brand that has launched plant-based options.

Kraft’s goal is not only to get consumers to try the product, but to consistently return to it. When this reporter tried it, the product spread easily on toast (but not as easily on a dry roll), and it also felt a lot like cream cheese.

But it didn’t taste the same — it was a little milder than the traditional version. Still, it certainly works as an acceptable alternative for those looking for a non-dairy option.

Like its peers in the alternative meat space, Kraft is trying to reach a flexitarian consumer: someone who doesn’t avoid animal protein entirely, but occasionally wants a plant-based alternative. “There’s a huge opportunity” for Kraft, Scott said.

To that end, this isn’t Kraft’s only foray into plant-based cheese. In October, the company launched a pilot program selling plant-based American cheese slices in a test market as part of its partnership with NotCo, a company that makes plant-based meat and dairy products.

But Kraft hasn’t made the big investments in plant-based alternatives that its competitors have.

Can cheese reverse the trend?

Sales of plant-based meats skyrocketed just a few years ago, with companies like Beyond Meat and Impossible Foods partnering with major fast food brands and reaching customers through major retailers.

But last year, retail sales of fresh meat alternatives were down about 9%, according to NielsenIQ data.

The waning interest is driven in part by the relatively high prices of meat alternatives. With food inflation remaining particularly high, consumers are opting for more affordable grocery staples.

Demand for plant-based cheese has been growing, with sales up 1.4% in the year to October, according to NielsenIQ. But like meat alternatives, plant-based cheese also comes at a premium price.

And consumers may shy away from these products as they look to save money, noted a report from this year’s Mintel.

Plant-based cheese “may well be an area where consumers, particularly flexitarians, are opting for more cost-effective cheese solutions,” the report said.

What’s more, Crawford noted, people who eat dairy but are trying to cut back on their intake might not even look for an alternative — they might just skip the item altogether.

“It’s easier to give up cream cheese and cheese…than it is to give up meat,” he said.