Kraft Heinz Co. and Jeff Bezos-backed startup NotCo are following through with their bet on plant-based foods. 

Eight months after announcing their joint venture, the companies are unveiling their first products: animal-free cheese slices and mayonnaise. Not Cheese will first appear on shelves in a small market test in Cleveland in early November, with a national rollout to follow by the end of 2023. Mayonnaise plans are still in the works, but an early 2023 rollout is being targeted.

For Kraft Heinz, the joint venture is an opportunity to join a competitive category without making major investments in research and development. “Sometimes to be more effective and more efficient you have to bring partners to help you on the journey,” Kraft Heinz CEO Miguel Patricio said. For NotCo, it translates into U.S.—and eventually global—distribution, without the need to build costly manufacturing capacity. It also gets a recognizable brand name.

There are clear benefits for both sides, but the collaboration is still risky: The plant-based category’s earlier stratospheric growth has cooled as competition heats up and inflation erodes purchasing power. Beyond Meat Inc., one of the most recognizable companies in the industry after its 2019 initial public offering, recently laid off about 19% of its workforce, and meat giant JBS SA shut down its US plant-based division, Planterra. 

Kraft Heinz shares rose 1.5% to $37.06 at 2:30 p.m. in New York trading. The stock had gained 1.7% this year through Monday’s close, outperforming the 20% decline for the S&P 500 over the same period.  

Read more about Kraft Heinz and NotCo

While vegan cheese sales have declined—falling 10% by volume for the 52 weeks ending Oct. 2, according to data from IRI—non-dairy products could have more upside than fake burgers, said Jonna Parker, a fresh-food specialist at the market research firm. Lactose intolerance has long driven consumers to alternative milks and yogurts, and that could also buoy the cheese category when products become more widely available. 

“It naturally has a larger audience,” Parker said, referring to animal-free dairy products, adding that the cheese niche remains largely untested. 

Not Cheese lists water, coconut oil, modified corn starch and chickpea protein as the main ingredients. It mimics Kraft’s famous singles, producing that same melty, gooey texture and bright orange color when used in a grilled cheese. It will come in American, provolone and cheddar varieties and will be initially sold in 30 Giant Eagle stores in the Cleveland area, appearing both in the plant-based case and in the deli.

Pricing is still under discussion, but it will cost less than currently available alt-cheeses, and slightly more than Kraft singles, which often retail for about $4 for a pack of 16 slices. The soybean-oil based mayo will follow a similar pricing plan.

The target consumers are people trying to reduce their intake of animal products but who aren’t ready to swear off them entirely, according to Kraft Heinz North America Chief Growth Officer Diana Frost. “That flexitarian still exists,” she said.

—Bloomberg News