By Juliana Green
Vegan cheese has evolved.
Over the past ten years, plant-based cheeses have transformed[1] from a waxy, greasy substance with little similarity to dairy cheese to a palatable appetizer addition, effectively mimicking the popular qualities of a dairy based Italian mozzarella, a Wisconsin cheddar or a Dutch Gouda.
Enhanced cheese production techniques, flavor combinations and human creativity have resulted in delicious alternatives. Simply put, the vegan cheese options today are far superior andmore plentifulthan the options offered fifteen to twenty years ago.[2]
With the dramatic expansion of vegan options, consumers are beginning to expect restaurants, take-out delivery, fast-casual chains, and grocery stores to offer plant-based alternatives. Recently, this expectation has spilled over into channels boosted by lifestyle changes caused by the pandemic. One channel of particular note: pizza delivery. As a result, consumers are now demanding vegan cheese pizza options.[3]
Customer Demand for Cheese Alternatives
But, what’s the big deal with vegan cheese?
There are many different explanations as to why consumers may choose vegan cheeses over dairy cheese. Of the top reasons, health and wellness are major factors – consumers are getting smarter and more particular.[4] The plethora of options in retail and food service allow consumers to select foods that are both convenient and competitively priced, but also “healthy” or “safe.” In many cases, consumers, limited by dairyallergies[5]and lactose intolerance, seek dairy-free alternatives out of necessity.[6]
Nearly fifteen years ago, the National Institute of Health estimated that 30-50 million Americans[7] suffer from lactose intolerance. Today, that number is likely larger. According to Medline Plus,[8] approximately 65% of the human population has a reduced ability to digest lactose after infancy. Isn’t it shocking that the majority of the global population isn’t genetically fit to digest dairy cheese, but a huge percentage of people still consume it[9] ?
The Market
To get a sense of the vegan cheese market potential, let’s walk through two scenarios under two different perspectives:
1) Market share based solely on the lactose intolerant population
Approximately 36%[10] of the United States population has difficulty digesting dairy cheese after infancy. Of 330 million[11] US consumers, approximately 118 million consumers could suffer from lactose intolerance and may be inclined to consume plant-based cheese in lieu of dairy cheese.
If 118 million lactose intolerant consumers purchased a $4.00 unit of vegan cheese six months out of the year, the US vegan cheese market could exceed $2.8 billion in annual revenues from one SKU alone. If this group of consumers decided to increase their purchasing frequency to every month, the US market could double, exceeding $5.6 billion in annual revenues.
2) Market share based on dairy cheese market size
Using a “back-of-an-envelope calculation” approach, if vegan cheese simply replaced 3% of the $70 billion dairy cheese market, the vegan cheese segment could reach a market share of $2 billion.
Consistent with our assessment and understanding of the market, Transparency Market Research[12] forecasts the vegan cheese market to reach $2.5 billion by the end of 2020 with the expectation that the current market size will triple by 2030.
Bottom line: The vegan cheese market potential is massive. The demand for dairy cheese isn’t increasing compared to other dairy products and consumers are shifting over to plant-based cheese alternatives. According to the Good Food Institute, vegan cheese sales grew over 50% in sales[13]from 2017 to 2019, one of the fastest growing products among plant-based alternative categories, reflecting the shift in consumer demand from dairy based cheese to plant-based cheese.
Figure 1: Good Food Institute Comparison of Plant-based cheese growth vs. Dairy-based cheese growth.
The Pizza Players
Now, let’s take a deeper dive into a market that requires large quantities of cheese - pizza food service - a $33 billion market in 2019.[14] Although food service is one of the hardest hit sectors due to the pandemic,[15] the pizzadelivery and take-out has actually performed very well.[16]
Pizza Hut, Papa John’s, and Dominos have all experienced significant sales gains during the pandemic.[17],[18] To capture a larger audience, these pizza delivery chains are investing in new solutions, including vegan cheese.[19] Many of the chains who historically offered vegan cheeses are now “upgrading” to higher-quality vegan cheeses with better melt, stretch, taste, and texture qualities.[20]
The race for better vegan cheese is mutual – As pizza chains seek out the best vegan cheeses, vegan cheese companies, both new and historic brands, race to innovate and partner with the top chains. Top players in pizza food service include:
Company Highlight: NUMU is drastically expanding in NY, winning over boutique pizzerias. View a NUMU pizza video here.
Figure 3: NUMU Cheese on Pizza - Find it at Paulie Gee’s and Screamer’s in NYC.
What’s Next?
Bigger, better, vegan cheese.
As we enter into the new year, think about what makes you and your family happy and healthy.
Maybe start the new year by ordering vegan pizza on a Friday night? If you had a negative prior experience with vegan cheese – try it one more time! You may be pleasantly surprised with the recent innovation. Flexitarians, vegans and dairy lovers, alike, can enjoy the evolution of vegan cheese in unison.
[1] Flint Marx, Rebecca. The Guardian. “Not Milking It: How Vegan Cheese Finally Caught up with Modern Appetites.” May 16th, 2019. https://www.theguardian.com/food/2019/may/15/vegan-cheese-change-diets[2] Usher, Cara. Fresh Take. “The Evolution of Vegan Cheese.” March 22th, 2018. https://www.freshnlean.com/blog/vegan-cheese-evolution/[3] Restaurant Business. “Seize the Opportunity: Vegan Cheeses Provide Variety and Comfort Consumers are Looking For.” Sponsored by Schuman Cheese. August 13th, 2020. https://www.restaurantbusinessonline.com/food/seize-opportunity-vegan-cheeses-provide-variety-comfort-consumers-are-looking[4] IFT – Feeding the minds that feed the world. “The Future of Food: What Consumers Want in 2019 – and Beyond.” April 1st, 2019. http://blog.ift.org/what-consumers-want-in-2019[5] The Daily Meal. The 10 Most Common Food Allergies. February 8th, 2012. https://www.thedailymeal.com/10-most-common-food-allergies-0/slide-2[6] Polinski, Megan. Food Dive: “No Allergens, No Problem: Consumers React Positively to Safer-Eating Foods.” May 17th, 2018. https://www.fooddive.com/news/no-allergens-no-problem-consumers-react-positively-to-safer-eating-foods/523701/[7] NIH – Department of Health and Human Services. Lactose Intolerance: Information for Health Care Providers. January 2006. https://www.nichd.nih.gov/sites/default/files/publications/pubs/documents/NICHD_MM_Lactose_FS_rev.pdf[8] US National Library of Medicine. Lactose Intolerance – Frequency. https://medlineplus.gov/genetics/condition/lactose-intolerance/#frequency[9] Statista. Per capital consumption of cheese worldwide in 2019 by country. US averages 17.5 kg per capita. https://www.statista.com/statistics/527195/consumption-of-cheese-per-capita-worldwide-country/[10] Storhaug CL, Fosse SK, Fadnes LT. Country, regional, and global estimates for lactose malabsorption in adults: a systematic review and meta-analysis. The Lancet. Gastroenterology & Hepatology. 2017;2(10):738–746. https://www.niddk.nih.gov/health-information/digestive-diseases/lactose-intolerance/definition-facts[11] Worldometer. United States Population – Live metrics. Data extracted on December 16th 2020. https://www.worldometers.info/world-population/us-population/#:~:text=the%20United%20States%202020%20population,(and%20dependencies)%20by%20population. [12] Transparency Market Research. “Vegan Cheese Market Size, Shares Trends Growth, Export Value, Volume & Trade, Sales, Pricing Forecast.”https://www.transparencymarketresearch.com/vegan-cheese-market.html#:~:text=Vegan%20Cheese%20Market%3A%20Overview,a%20CAGR%20of%20~10%25. [13] Good Food Institute. Plant-Based Market – 2020 Overview. “Figure: Animal-Based and Plant-Based Product Comparison: Dollar Sales Growth, 2019.” and “2019 Plant Based Food Market by Category.”https://www.gfi.org/marketresearch#:~:text=DAIRY%20OTHER%20CATEGORIES-,Plant%2DBased%20Market%20Overview,foods%20are%20a%20booming%20business.&text=New%20SPINS%20retail%20sales%20data,two%20years%20to%20%245%20billion. [14] Demeyer, Jolien. “The U.S. Pizza Market: A Large Slice of the Foodservice Industry.”https://www.chd-expert.com/the-u-s-pizza-market-a-large-slice-of-the-foodservice-industry/[15] Pizza Today. “COVID-19 Pizza Industry Special Report.” November 1st, 2020.https://www.pizzatoday.com/departments/features/covid-19-pizza-industry-special-report/#[16] Hendersen, Brooke. Fortune. “We’re eating a lot more pizza during the pandemic. Why Domino’s is getting the biggest slice of the pie.” August 12, 2020. https://fortune.com/2020/08/12/coronavirus-food-trends-takeout-delivery-pizza-dominos-covid/[17] Kelso, Alicia. Food Dive. “Independent Pizza Sales Boosted By COVID-19 Pandemic, report shows.” September 15th, 2020. https://www.restaurantdive.com/news/independent-pizza-sales-boosted-by-covid-19-pandemic-report-shows/585207/[18] Coley, Ben. QRS. “Who’s Growing During the Coronavirus Crisis? Pizza Chains.” March 20th, 2020. https://www.qsrmagazine.com/exclusives/whos-growing-during-coronavirus-crisis-pizza-chains[19] Starostinetskaya, Anna. “Global Pizza Chain Adds Vegan Cheese to US Locations.” May 20th, 2018. https://vegnews.com/2018/5/global-pizza-chain-adds-vegan-cheese-to-us-locations[20] Vegconomist. “Pizza Chains Around the World Increasingly Adding Vegan Options.” October 29th, 2019. https://vegconomist.com/food-and-beverage/pizza-chains-around-the-world-increasingly-adding-vegan-options/[21] Lynch, Scott. Gothamist. “A First-rate New Pizza Joint Opens on 30th Avenue In Astoria.” Jan 22, 2021. https://gothamist.com/food/first-rate-new-pizza-joint-opens-30th-avenue-astoria[22] Watson, Elaine. Food Navigator. ”Foodservice an underdeveloped channel for plant-based cheese, says new Daiya Foods CEO.” November 1st, 2019. https://www.foodnavigator-usa.com/Article/2019/11/01/Foodservice-an-underdeveloped-channel-for-plant-based-cheese-says-new-Daiya-Foods-CEO[23] Shoup, Mary Ellen. Food Navigator. “Violife makes US (re)debut into plant-based cheese category.” January 30th, 2020. https://www.foodnavigator-usa.com/Article/2020/01/30/Violife-makes-its-US-re-debut-into-plant-based-cheese-category#[24] Starostinetskaya, Anna. Veg News. “Domino’s Debuts Three Cheesy Vegan Pizzas.” January 7th, 2018. https://vegnews.com/2018/1/dominos-debuts-three-cheesy-vegan-pizzas[25] Axworthy, Nicole. Veg News. “Pizza My Heart Expands Miyoko’s Vegan Cheese to All Locations In Northern California.” April 6th, 2020. https://vegnews.com/2020/4/pizza-my-heart-expands-miyoko-s-vegan-cheese-to-all-locations-in-northern-california