Golden Toasted Butter, a dairy-free spray-dried flavor, can be dry-blended into applications without any special processing needs, said the company.
The ingredient has been tested for use in baked goods, such as bread, crackers and biscuits, as well as in cheese applications, such as sauces and seasonings.
According to the firm, it could also be used in any application that seeks a toasted butter flavor - for example prepared meats, vegetables, soups, batters and snacks.
According to Kraft Food Ingredients (KFI), its new flavor can help improve the nutritional profile of products by reducing their calorie content.
However, as the ingredient does not carry the same functional attributes as butter, manufacturers would have to adjust their formulations - perhaps through the addition of functional starches or shortenings - in order to build back the texture and mouthfeel normally achieved by butter.
Nevertheless, the company claims significant cost benefits can be achieved by manufacturers, especially in light of the current high dairy prices.
The firm was unable to provide specific cost reduction information, saying this was highly dependant on each application.
The company did confirm that the standard version of its new flavor contains the ingredient diacetyl, a common ingredient in butter flavoring, but one that has repeatedly been linked to lung disease in employees of manufacturing plants where it is used.
Just this month, doctors reported that the chemical may cause a fatal lung disease in consumers as well as factory workers.
Although there are currently no enforceable Occupational Safety and Health Act (OSHA) standards requiring exposures to be controlled, a number of lawsuits and a flurry of negative publicity surrounding the ingredient have resulted in some manufacturers removing it from their products.
Earlier this month, two major US popcorn makers - Pop Weaver and ConAgra - announced they would remove diacetyl from popcorn flavoring.
KFI told FoodNavigator-USA.com that it is addressing the potential diacetyl concern by looking at formulating diacetyl-free versions of its ingredient.
In fact, one such version has already been developed, and is currently in testing stages.
"To some customers diacetyl is not an issue, to others it is.
We're moving forward towards formulating solutions to meet customer needs," KFI flavorist Susan Parker told FoodNavigator-USA.com.
According to the company, the non-diacetyl version is classified as a 'natural-type' flavor, as all raw materials it contains are natural, but not sourced from butter.
The diacetyl-containing version, which is the version currently commercially available, is a 'natural and artificial' flavor.
It contains refined, bleached and deodorized sunflower oil, and no dairy ingredients.
It is kosher certified and does not contain hydrogenated oils.
Usage levels range from 0.1 to 0.5 percent as consumed.