Homemade Butterscotch Chips: Easy, Dairy-Free Chunks for Recipes


This post is part one of this month’s Kids Can Cook section by the Hatfields. Katherine and her “mama”, Sarah, love making these homemade dairy-free butterscotch chips.

Homemade Dairy-Free Butterscotch Chips Recipe (also vegan, gluten-free, nut-free and optionally soy-free)

Butterscotch is one of our favorite flavors. Some butterscotch lollipops and hard candies are dairy-free, but it is difficult to find dairy-free butterscotch chips. Katherine found some homemade butterscotch chips recipes online and altered them to make this recipe. While these dairy-free butterscotch chips don’t hold their shape when heated the way commercial chips do, they do have that perfect butterscotch flavor. We did try to make a sturdier chip, but the resulting flavor was more “caramel” than “butterscotch.” So we went back to Katherine’s original recipe.

These homemade dairy-free butterscotch chips are great in our Dairy-Free Seven Layer Bars (recipe coming soon!), as a dairy-free ice cream topping or mix in, in no-bake treats, or blended into dairy-free milkshakes. You can also use them in other cookie recipes calling for butterscotch chips. However, they do melt when heated, and will make some unattractive, though delicious, cookies!

Young children can help measure and mix all of the ingredients, spread the butterscotch in the sheet pan with a spatula, and break the butterscotch into chips once it has cooled. A butter knife can be used instead to cut them into small, even chunks. But pouring the hot butterscotch is a job best left to teens and adults.

Homemade Dairy-Free Butterscotch Chips Recipe (also vegan, gluten-free, nut-free and optionally soy-free)

Special Diet Notes: Dairy-Free Butterscotch Chips

By ingredients, this recipe is dairy-free / non-dairy, egg-free, gluten-free, grain-free, nut-free, peanut-free, optionally soy-free, allergy-friendly, vegan, and vegetarian.

5.0 from 4 reviews
Homemade Butterscotch Chips
Prep time
Cook time
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Our favorite dairy-free mother-daughter duo is sharing their favorite recipe for homemade butterscotch chips. Please note that the Prep time does not include refrigeration.
Serves: about 3 cups butterscotch chips
  1. Put the coconut oil, margarine, and brown sugar in a medium saucepan.
  2. Place the saucepan over medium heat, and whisk the ingredients to combine.
  3. Bring the mixture almost to a boil.
  4. Continue to cook the mixture over low heat, while whisking, until the sugar is dissolved.
  5. Remove the saucepan from the heat, and stir in the vanilla extract.
  6. Pour the melted butterscotch onto a parchment-paper lined 9x13-inch pan.
  7. Spread the butterscotch evenly in the pan.
  8. Refrigerate the butterscotch for 3 hours.
  9. Break the butterscotch into small chips, or cut into chips with a pizza cutter or butter knife.
  10. Store the chips in an airtight container in the refrigerator.
*You can substitute cacao butter for the coconut oil to make coconut-free chips. However, the result will be more caramel-like in flavor than butterscotch.

Key Ingredients & Tools: Dairy-Free Butterscotch Chips

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About Author

Sarah is the Associate Editor for Go Dairy Free. She also shares food and daily dilemmas as a milk allergy mom via her blog, No Whey, Mama. Sarah’s previous experience includes work as a copy editor at Thoroughbred Times magazine, a content writer at Travelago.com, and an intern at Mister Rogers’ Neighborhood.


  1. Sometimes the more unattractive the cookie the better 😛 What is the difference between butterscotch and caramel? I’ve never really thought about that.

    • I think traditionally butterscotch is made with brown sugar and caramel is made with white sugar. But something about using the cacao butter instead of the coconut oil made them taste more like caramel to me!

  2. Pingback: Dairy-Free Seven Layer Bars Recipe : Sweet, Gooey, Deliciousness

    • HI! When testing batches, we tried one batch with cacao butter instead of coconut oil, which gave the chips a more caramel flavor. Still very good, just not what we were going for! It’s included as a coconut-free option in the recipe.

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