(Bloomberg) -- Miyoko’s Creamery, a maker of imitation cheese and butter, raised $52 million in new funding as investors flock to plant-based proteins.
The series C funding round was led by PowerPlant Partners, a group that focuses on sustainable consumer companies, which invested $40 million. JMK/Cult Capital, Obvious Ventures, Stray Dog, and Coller Capital are also participating. Miyoko’s Creamery didn’t disclose its latest valuation.
“With how fast the industry is changing, we have to push as hard as we can in innovating and carving out our space in this growing sector,” said Miyoko Schinner, founder and chief executive officer of the Sonoma, California-based company.
In an interview, Schinner said she plans to use the funding to increase marketing and build her research team from fewer than 10 people to a group of as many as 20 that includes “very experienced cheese-makers.” She expects expanded retail availability as well as further forays into foodservice. A pizza-ready, pour-able “mozzarella” product will be showcased at a trade show in September.
The company’s sales grew 70% in 2020, Schinner said, and they’re on track to repeat or surpass that number this year.
While faux meats, like beef and sausage, have dominated the plant-based industry, cheese and butter are also attracting a growing segment of consumers. U.S. retail sales of alternative cheeses grew about 21% to $267 million for the 52-week period ended July 24, according to data from NielsenIQ.
That’s a small fraction of the $19.1 billion cheese retail market, but investors see an opportunity to replicate the popularity of plant-based milk. Nondairy milk has grown to represent a $2.2 billion market in retailers, compared to dairy’s $12.9 billion, according to NielsenIQ.
Still, alternative cheese products face obstacles. For instance, cheese is an indulgence that many consumers won’t readily sacrifice. And since many cheeses are already lactose-free, people who have sensitivities don’t need to go with a nondairy version. Perhaps most importantly, many vegan cheeses simply don’t taste very good.
Miyoko’s Creamery also faces intensifying competition. Newly public Oatly Group AB, for example, said in May that it plans to sell vegan cheese.
Schinner, whose products are made with plant “milks” that are turned into cheeses with enzymes and fermentation, said her company’s past offerings in shreds and slices compromised on quality amid a rush to expand. Now, Miyoko’s Creamery is renewing its focus on “artistry,” she said, to develop high-quality cheddar and pepper jack products.
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