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Now we're cooking with butter.

This phrase narrates a progression or improvement in quality. Note that 'now we are cooking with gas' narrates a progression or improvement in efficiency.
"Hey man I just started trying harder at work and it makes the day go by so much faster!!"... "Good for you man. Now we're cooking with butter."

Now we’re cooking with spruce!

Making something worse.
Since cooking over a spruce wood fire would make your food taste absolutely horrid
Person 1: You should inject salt into your urethra to kill a uti!
Person 2: Yeah! Now we’re cooking with spruce!