Aiming to lead consumer shift to animal-free dairy aisle: Miyoko's Kitchen of Sonoma County

Everyone knows that vegan cheese starts as wild cashew nuts grown in a rainforest on top of a mountain in Vietnam.

Or at least Miyoko Schinner does.

The founder and CEO of Miyoko's Kitchen which makes a variety of vegan cheeses and products from its facility in Petaluma.

Schinner sources the nuts from such an obscure location because it is the most sustainable way to do so since they are not farmed, do not require water input, and proliferate rapidly. 'It's very, very sustainable,' Schinner said.

This approach is in line with Schinner's company, which along with its mission to bring vegan alternatives to the cheese and dairy aisle, is also trying to change, and maybe save the world, in her telling.

Miyoko's Kitchen makes a variety of vegan cheeses and butters but is by no means Schinner's first foray into the vegan culinary world. A self-described 'serial entrepreneur,' Schinner's previous ventures have included running a restaurant called Now and Zen in San Francisco, supplying low fat, vegan, sugar-free cookies to United Airlines, and writing a cookbook on making vegan cheeses that eventually led to her opening the business that bears her name.

A long time Marin County resident, Schinner said her move away from eating meat started around age 12, 'when I made the connection between the pork chop on my plate and a little pig.'

That commitment to animals and the environment has led Schinner to run her company as a change agent to help people move away from eating products like cheese, which she said are chemically and evolutionarily addictive.

'People are definitely trying to reduce their consumption of meat, particularly red meat, because they're beginning to make that connection between meat and the environment,' she said.

Schinner noted a recent United Nations International Panel on Climate Change finding that humans have a little over a decade to reverse climate change, which animal agriculture is a significant contributor to.

'It's time for industry to take the lead in changing the trajectory of climate change. And one of the best ways of doing that is changing our food system,' Schinner said.

Part of that effort includes working through Farm Sanctuary, a farm animal sanctuary, to find a traditional farm to convert into a producer of the plants Miyoko's uses to create its products.

'We are going to be identifying a farmer that we can work with to help them transition to crops that'll be part of our supply chain and our research and development,' Schinner said, noting that many small dairy producers in the U.S. have been hit hard by the falling price of milk and that she wants to offer entering her supply chain as an alternative.

Financially, Schinner's company is backed by private venture capital. She said everything the company makes in profit is reinvested into the company. In November, Ellen DeGeneres and her wife, Portia de Rossi, became investors in Miyoko's, sinking in an undisclosed amount.

Even with these winds at her back, however, it might not be as easy as it seems to take market share and shelf space away from traditional dairy products like cheese. That is according to William Rosenzweig of UC Berkeley. He is a food systems expert and co-chairman of the Haas Center for Responsible Business and Berkeley's Sustainable Food Initiative.

'The venture capital has not only fueled product innovation like at Miyoko's but also a coalescence of a narrative that makes eaters more attuned to the health and environmental impact of the foods they eat,' Rosenzweig said.

He added that for companies like Miyoko's or Impossible Foods, maker of a vegan burger, 'The amount of media attention (the industry) receives is extraordinary relative to its actual size.'

He said while products like Miyoko's were at the cutting edge of changing the food system to a more sustainable footing, they still represent a relatively small part of the market.

'Natural and organic foods have always been at this superpremium price point, affordable only to people of means,' Rosenzweig said.

He also added that not eating animal products is not necessarily enough to positively change our food system and impact on the environment.

'We have to move from not just, 'What am I eating?' to 'What system am I participating in when I purchase and buy this product?'' he said, noting even sustainably farmed cashews needed to be flown to the U.S.

For her part, Schinner is seeking to escape the confines of the ultrapremium, expensive category by diversifying her product offerings and using different, domestic ingredients.

'We're branching out into more commodity-style cheeses, kind of premium commodity style. Think Tillamook, in terms of price point and quality' Schinner said.

She also acknowledge that cashews are an expensive crop to work with and that more easily grown domestic ingredients would allow her company to make more common 'cheeses' like cheddar, which they plan to roll out next year, as well as pepper jack.

'We developed some new products made out of crops that can be grown on American soil, which is where the farmer comes in. And these crops are things such as potatoes, beans, oats, sunflower seeds,' Schinner said.

She said artisan cheeses would still remain important to the business and that the company's research and development team is working on aged Parmesan, Camembert, Brie, and blue cheese varieties. Schinner said those efforts would likely be in the future, adding the company is in talks with quick serve and high-end restaurants to carry their products.

'We started rolling out our artisan cheese wheels several months ago at wineries in Napa and Sonoma,' Schinner added. 'Places like Domaine Carneros, Gloria Ferrer the Girl and the Fig, Three Sticks, serve our products.'

But Miyoko's also has competitors in what is a small but rapidly growing industry.

One of those competitors is Treeline Cheese, a vegan cheese maker whose founder, Michael Schwarz, said he sees a young industry heading towards consolidation with plenty of room to grow.

'Sales of Philadelphia cream cheese are around $1 billion per year,' Schwarz said, noting that his company makes a vegan cream cheese and that even securing a small portion of that market share would be significant.

Schwarz's company also uses cashews to make their cheese, combining them with probiotic bacteria to create a cheese substitute which he says differentiates his product in an expanding market.

'We think there will be a period of expansion as more and more brands come into the market,' Schwarz said. He added, 'We believe we will survive the consolidation…We've been around seven years and have continued to grow.'

Bay Area-based Kite Hill also makes vegan cheese products. Vice President of Marketing Shannon Toyos said in an email that using domestic almonds has bolstered their place in the market.

'To differentiate and position ourselves favorably within the market, we continue to create delicious dairy-free favorites using the highest quality ingredients and hand-selected premium almonds from California's San Joaquin Valley,' she wrote.

Asked how changing lifestyles and attitudes about plant-based alternatives can grow the industry, Toyos wrote: 'Ultimately, it really is no different than any other industry – the more consumer demand for plant-based foods, the more the market will grow and we will continue to look for ways to expand.'

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