By Anna Cooban, CNN

London (CNN) — It’s a problem as intractable as the riddle of the Sphinx: How do you make a vegan cheese that people actually want to eat?

Formo, a Berlin-based biotechnology company, thinks it has found the answer in a minuscule fungus, Koji, that has given that distinctive umami flavor to soy sauce, miso and other staples of Japanese cuisine for thousands of years. Formo ferments the Koji to produce a protein that provides the base of its dairy-free cheeses.

Raffael Wohlgensinger, Formo’s co-founder and chief executive, started the company five years ago to create cheese sustainably, using less land, water and producing less planet-heating emissions than traditional dairy farming for milk-based cheeses. It was also born from his frustration with the current range of vegan cheese products in stores.

“Being Swiss, and being a big cheese lover, (I was) disillusioned with everything,” he told CNN.

He is not alone. In recent years, consumers have flocked to dairy-free substitutes for cow’s milk, guzzling its oat and almond-based cousins, for example, and to plant- and fungus-based meats, such as burgers.

But shoppers have not taken to vegan cheeses with the same enthusiasm, according to Carmen Masiá, an application scientist at Novonesis, a Danish biotech firm producing the bacteria and enzymes needed to make fermented foods like yogurt and cheeses.

Sales of plant-based milks in the US rose by more than 1% in 2023, according to the San Francisco-based Plant Based Foods Association, whereas sales of plant-based cheeses fell 9%.

Masiá, who has researched consumer trends around vegan cheese as part of her doctorate, said that the most common bases for these cheeses, such as coconut fat, fail to lend that recognizably “cheesy” flavor or texture. “It’s a block of fat… It feels rubbery. It doesn’t feel like a dairy cheese in the mouth.”

“If you talk with vegans or vegetarians or flexitarians, most of (them) say, ‘I cannot give up on cheese’ because it’s so difficult to replicate that flavor,” she added. “The code has not been cracked yet.”

Masiá said the current crop of vegan cheeses generally do “not deliver” what consumers want. “If you go to a café, you can always find oat milk and even people who are not really vegan, many times they choose oat milk because it’s tasty.”

She can’t imagine shoppers’ preference for milk-based cheese shifting dramatically anytime soon, but says fermentation — a process using bacteria, yeast or other microorganisms to break down and transform food, such as turning milk into yogurt — offers a way to improve vegan cheeses.

“In the end, if you develop something that is really sustainable, really nutritious but it doesn’t taste good, people are not really going to buy it.”

‘Micro-fermentation’

Formo’s cheeses seem to have finally tickled some tastebuds. In September, the company secured $61 million during its latest funding round and announced that it would begin selling some of its products — three flavors of cream cheese — in more than 2,000 stores across Germany and Austria.

Wohlgensinger said the partnership with REWE, BILLA and METRO supermarkets was a “massive” moment for the company. He is gearing up for a wider roll-out of Formo’s products in Europe next year and in the US in 2026.

So, what’s the secret sauce?

Formo has put its own spin on fermentation to make its cheeses: It puts a strain of the Koji fungus into a tank, adds oxygen, and stirs in sugars and nutrients to cultivate proteins in large quantities. It calls this process “mi?cro-fermentation”.

The proteins are siphoned off and dried to create a powder that forms the base of Formo’s products, which also include blue and feta-style cheeses.

The Koji protein gives Formo’s cheeses a “creaminess” that is hard to emulate using plant proteins, which are structured differently and can often feel “grainy” in the mouth, said Wohlgensinger, adding that the taste is a closer approximation to milk-based cheese.

In “all the (cheese) products based on cashews or soy, you taste cashew or soy, (and in) the products based on potato, you taste potato starch,” he said.

Wohlgensinger said that he believes Formo is the first to ferment Koji for cheese. He hopes the method will eventually become the default among food producers.

Formo is also testing a process called precision fermentation, which uses microorganisms that have been genetically engineered to produce proteins identical to the casein proteins found in animal milk. These copycat proteins can help give Formo’s vegan cheeses the taste, texture and “meltability” of traditional cheese, according to the company.

“If you think about the nice stretchiness of a mozzarella on your pizza, that is really coming down to the protein structure of casein,” Wohlgensinger said. Formo is in the process of getting the cheeses produced via precision fermentation approved for sale by food regulators in the US and Europe. Securing approval for these cheeses is a complex process partly because the production process is novel, Wohlgensinger added.

“We’re not here to put small-scale dairy farmers out of their business — they will always be a very valuable part of a very diverse, resilient food system — but at the same time, I think there is a very big chunk of the market… that is bound to be replaced by a more efficient technology,” he said.

Animal agriculture is responsible for around 12% of the world’s greenhouse gas emissions, according to the UN’s Food and Agriculture Organization, making it a significant contributor to climate change. Cows have a particularly significant impact because they produce methane, a potent planet-heating gas.

Creating ‘crave-ability’

Formo hopes that as it scales its production it can lower its retail prices to below those of milk-based cheeses. Now, 100 grams of Formo’s cream cheese product costs €1.59 ($1.68), making it €0.32 ($0.34) more expensive than the average price of milk-based cream cheese, Wohlgensinger said.

Still, the company must contend with deeply entrenched preferences among cheese lovers.

Dairy-based cheeses have a unique “crave-ability,” according to Julie Emmett, vice president of marketplace development at the Plant Based Foods Association, that has made it harder for its dairy-free alternatives to truly compete, unlike plant-based milks.

“You can’t necessarily say that milk is crave-able. You can say meat is crave-able. But with cheese, it is unique in that respect, (it’s) something that’s an indulgence,” said Emmett.

Still, Novonesis’s Masiá, said that fermentation may just be the answer for dairy-free cheese makers, infusing their products with the “cheesy notes” consumers are looking for. Increasingly, food producers are requesting batches of Novonesis’ bacterial cultures to produce cheese via this process, she added.

“People are opening their eyes and thinking ‘OK, microbes can help us’,” she said.

CNN’s Laura Paddison contributed to reporting.

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