The name which is causing such consternation is iSnack 2.0 - as in: "I said 'Do you speaka my language?' She just smiled and gave me an iSnack 2.0 sandwich."
The man who dreamed it up - West Australian web designer Dean Robbins - admitted the name was "a bit tongue-in-cheek".
"The 'i' phenomenon and web 2.0 have been recent revolutions and I thought the new Vegemite name could do the same," he told the Sydney Morning Herald.
"To think that I could go down in Australia's history is overwhelming."
Kraft's head of corporate affairs, Simon Talbot, said the name "Vegemite iSnack2.0 was chosen based on its personal call to action, relevance to snacking and clear identification of a new and different Vegemite to the original".
But consumers haven't warmed to the name and many have turned to social networking sites to make their opinions known.
"Feeling quite ashamed of my homeland after reading about Vegemite's new flavour being named 'iSnack 2.0'," read one tweet.
"Sadly somewhere someone is spreading I Can't Believe its [sic] not Butter on bread then adding 'I Can't Believe it IS iSnack 2.0'," opined another.
A website, Names that are better than "iSnack 2.0", has even been set up.
Aside from the vitriol on Twitter are allegations the name is a stunt to grab people's attention.
Talbot denied this in The Australian yesterday, but admitted the public reaction had been stronger than anticipated.
"We are currently monitoring the social networks - the product is embedded, but I couldn't comment on the name," he said.
And the potential problems don't end there for Kraft.
It has emerged that the name iSnack 2.0 was trademarked in Australia by toaster-maker Breville eight years ago.
Senior lecturer in Intellectual Property at the University of Queensland, Kimberlee Weatherall, told the The Brisbane Times yesterday it was not necessarily a problem for two products to have the same trademark, as long as they were sufficiently distinct.
However she added: "I imagine Breville might be annoyed, they might even decide to oppose any attempt to register the trademark."
Marketing experts spoken to by Australian media organisations are as divided over the name as the general public.
Paul Harrison, a lecturer in marketing at Deakin Business School, told the Sydney Morning Herald the product was gaining valuable awareness.
But Rowan Dean, creative director of advertising agency Euro RSCG, wasn't so complimentary.
"The idea of getting the public to create the new name of the product the way they did with the original Vegemite is fantastic," Dean told The Australian.
"But iSnack 2.0 is totally irrelevant to the iPod, Web 2.0 generation, and if they don't change the brand name it will disappear from the shelves in six months."