Daiya Foods founders discuss future of plant-based

by Monica Watrous
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Daiya meatless pepperoni-style pizza
Earlier this year, Daiya launched a meatless pepperoni-style pizza free of the top allergens.

VANCOUVER, B.C. — The founders of Daiya Foods Inc., a Vancouver-based maker of dairy-, gluten- and soy-free products, are committed to achieving the impossible.

Andrew Kroecher, Daiya
Andre Kroecher, co-founder of Daiya

“When we hear something can’t be done, that’s when we start getting excited because we know that the consumers want a product like this and there isn’t one offered,” said Andre Kroecher, who co-founded the company with Greg Blake in 2008.

Case in point: The brand earlier this year launched a meatless pepperoni-style pizza free of the top allergens. The challenge was developing a pepperoni alternative without gluten or soy.

“We tried to reach out to our existing suppliers who provide us with pea protein-based sausage crumbles for our supreme pizza, and they told us it couldn’t be done,” Mr. Kroecher said. “So we started developing this in-house using ingredients such as mushroom, pea protein, starches and other interesting ingredients. We’re using a variety of plant-based innovative ingredients that bring the protein and the functionality together and give us a chance at providing something that tastes just like the real thing. With the meatless pepperoni, we were able to develop our own and slice it on a real pepperoni slicer, add it to the pizza … and the feedback been astounding.”

The company debuted its first products, Daiya Cheddar Style and Mozzarella Style Shreds, in 2009. Since then, Daiya Foods has launched dairy-, soy- and gluten-free alternatives to cheese slices and blocks; Greek-style yogurt and cream cheese-style spreads; and frozen pizzas, macaroni and cheese and cheesecakes. The brand’s products are sold in more than 22,000 grocery stores and natural food retailers in the United States and Canada, and many pizza and sandwich restaurants offer Daiya branded dairy-free cheese on the menu.

Daiya cheese shreds
Daiya's first products, Daiya Cheddar Style and Mozzarella Style Shreds, debuted in 2009.

“We continue to experience double-digit growth,” Mr. Blake said. “In the early years, it was quadruple or triple growth because we were new.”

Most recently, the company introduced a line of shelf-stable salad dressings that are free of dairy, soy, gluten and eggs. Varieties include creamy Caesar, homestyle ranch, and blue cheese-style dressings.

“The feedback we’ve had so far is people can’t tell the difference between our new products and the dairy equivalents,” Mr. Blake said.

In March, Daiya Foods became a founding member of the Plant Based Foods Association, along with four other founding board members that include Follow Your Heart, Miyoko’s Kitchen, The Tofurky Co., and Upton’s Natural. Eighteen food companies have joined as charter members. With collective annual sales of approximately $3.5 billion, the trade group was formed to educate retailers, food service professionals and consumers about the benefits of plant-based eating.

“There’s a lot of work still to be done,” Mr. Kroecher said. “It’s inspiring to see how readily these plant-based products are being adopted and some of the great documentaries and work that’s being done to expose the information that shows the positive change that can take place and how it can be a real win for everyone involved.

“I would have to say with Daiya, we from the beginning had always hoped that would happen. If you’ve been plant-based for any length of time and you go back 10, 15, 20 years, it was pretty dismal as far as the lengths you had to go to fit in if you weren’t making your own food in your own house. So we’ve had this vision and this passion that one day people will see that there are many ways to create great tasting food, and they don’t all need to involve animals or coming at the expense at some other species.”

Greg Blake, Daiya
Greg Blake, co-founder of Daiya

In an interview with Food Business News, Mr. Kroecher and Mr. Blake discussed the future of plant-based foods, emerging competition in the category and the challenges of plant-based product development.

Food Business News: How has the plant-based category evolved since you launched the business?

Mr. Kroecher: In our case, what we like to focus on is, can we be ubiquitous with the veggie burger or some mainstay where when you go into a restaurant you just know it’s going to be on the menu? We’ve seen companies like Silk make it into the TCBY frozen yogurt chain, and we’ve seen Starbucks serve almond and soy milk in their lattes, and that still has yet to happen in so many ways in the category.

If you go into Subway, for example, can you order a sandwich that has a dairy-free cheese on it? The answer is no. The question we ask is, “Why?” Can you order a sandwich that has a meatless turkey slice and dairy-free cheese slices on it? Maybe you can get some hummus or avocado, but we see the future as, yes, you can, and here are the brands that will provide that solution.

Daiya Cheezecake and Greek yogurt
Daiya's portfolio also includes Greek-style yogurt and cheesecakes.

Unfortunately, so much of the time we get that chicken-and-the-egg circle, which is, “Well, we’re not going to serve your dairy-free slices because there’s no demand,” and there’s no demand because nobody’s serving them. So this is the cycle that goes in loops, and we’re trying to break that cycle with smaller chains and retail so that the consumers demand that the proprietor listens to their unmet needs, and in today’s digital era, where people communicate in real time, they almost have to listen to that because people will share how they feel to people all over the world instantly, and that changes everything, and so that’s pretty thrilling for us.

How do you view the competitive landscape?

Mr. Blake: Competition has definitely increased, and I think that’s good news for a few reasons. First, it’s good for consumers because the added competition forces everyone to raise the bar in terms of taste, texture and other attributes of dairy-based counterparts, such as melting, stretching and handling characteristics for cheese alternatives as an example.

Secondly, most of the companies we compete with are actually friendly, and we have a fairly open channel of communication with them, and I think that’s happening because we all realize that because of the growth of this space that there continues to be enough room for everyone and that as a group we can help each other and be more influential in the industry than we could be otherwise on our own.

What drove the insights to develop the dairy-free dressings?

Mr. Kroecher: That section of the grocery store, the shelf-stable dressings, is largely Hidden Valley, Kraft; it’s sort of renowned for an area that maybe hasn’t experienced innovation or change that other parts of the grocery store have.

Daiya salad dressings
Recently, Daiya introduced a line of shelf-stable salad dressings that are free of dairy, soy, gluten and eggs.

Everything that’s white is typically going to have milk and egg in it, and that would typically be your creamy ranch, blue cheese, Caesar, and many other ones as well. And then you can probably find oil and vinegar dressings that don’t have dairy and egg, but the selection is slim.

We don’t formulate with any animal ingredients, so we couldn’t use things like anchovy or fish. Those are allergens, and it doesn’t align with our plant-based mandate.

We recognized the opportunity was there because according to the F.D.A., the No. 1 allergen is milk, and the second allergen is egg. And then you get into tree nuts and nuts and then shellfish and fish, and finally you have soy and gluten. So we felt that being able to eliminate the egg, just even as an allergen, and also align with the plant-based and vegetarian consumers who don’t consume animal products, that would be a big deal … and basically try to innovate in a category that we believe has pent up demand because no one has offered anything like this to our knowledge.

What challenges were involved with developing the dressings?

Mr. Kroecher: Because we’re clean label, we wouldn’t use things like benzoates, sorbates and other preservatives, so we had to innovate with the process… It just takes more time and is more costly and it’s more difficult to do, so that was a big hurdle for us.

How do you identify gaps in the marketplace?

Mr. Blake: We started with the shredded products because at the time, back in 2008, most of the dairy-free cheese alternatives that didn’t have casein — because a lot of them came across as dairy-free, but they were in fact using casein — none of them shredded properly. They were a lot like tofu. So that was a big differentiator for us.

Daiya block cheese, cheese slices and cream cheese
As Daiya grew, the company expanded its cheese-centric products, like blocks, slices and cream cheese.

As we wanted to expand out, we started with the cheese-centric products, which are our core products. From shredded cheese, we moved to block, then sliced, then cream cheese because we saw opportunity there in the market. And the opportunities are identified by a number of factors, such as: Is a product available, and if so, is it satiating consumers? And if it is, is it meeting some of the other needs of consumers such as it actually being dairy-free and not using casein, and is it using soy and other common allergens? That is how we identify gaps.

One of the other ways we identify holes in the market is also looking at the convenience factor. It would have been very easy for us to do a mac and cheese product that was using a powder and forcing the consumer to figure out where to get their milk and butter alternatives, but instead our cheesy mac products are more of a premium product, where we’re using a shelf-stable cheese sauce so you don’t have to worry about where you’re going to get your alternative milk and butter ingredients from. Convenience is also top of mind when we’re trying to come up with new products.

Why have you chosen to avoid using soy in your products?

Mr. Blake: Largely because of consumer demand. It would actually have been a lot easier for us to use soy because frankly using ingredients like pea protein tend to have a non-cheese flavor. It’s more difficult to mask some of the ingredients instead of, say, soy, but really it’s the consumer that’s driving this as much as anything. The trends back that up.

Daiya Cheezy Mac
Daiya's mac and cheese products include shelf-stable cheese sauces.

Mr. Kroecher: We have found even though soy has been considered a miracle plant-based ingredient, we just found the more we can differentiate our brand from what other people are doing, the more there are consumers who say, “Thank you for listening to me. You’re the only brand that I can eat.”

It heightens the novelty factor, and it makes sure we appeal to the widest range of consumers while not coming at the expense of taste or flavor.

What’s next for Daiya Foods?

Mr. Blake: We’ve got an amazing R.&D. team. There are a lot of opportunities.

One example of that is now we’ve done Daiya’s first meat alternative in the form of pepperoni for our pizza line. So, there’s the potential for us to explore moving into meat and poultry alternatives. I’m not saying we’ll do that, but there is so much white space for us. We have to get disciplined about how we’re going to move forward with new products and platforms.
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