During his presidency, the late Gerald Ford reportedly asked the White House chef for the same meal each day—cottage cheese served with a dollop of ketchup.
That might have been the last time someone innovated on cottage cheese.
Popular sentiment has been less than enthusiastic. It’s ridiculed on health sites, with multiple fitness and body-building forums dedicated to the topic of how to make a spoonful of the stuff go down. Buzzfeed, meanwhile, ran an article titled “Cottage Cheese Is Fucking Disgusting.” Among the popular site’s chief complaints? “It tastes like nothing and sadness all at the same time.” (Over 70% of readers voted they “agreed” with the article.)
But the cottage cheese image problem is relatively recent. Roughly 40 years ago, the cottage cheese market was double that of yogurt. Today, yogurt is seven times more profitable than cottage cheese, according to Nielsen findings.
Love it or hate it, the thick milky food is packed with protein, vitamins, and calcium–equal to that of yogurt–and it’s poised to make a comeback. One company that is hoping to reposition the food from sad and lumpy to cool and tasty is Irvine-based Good Culture. They have launched a line of flavored organic cups in hopes of jump-starting the $1.1 billion cottage cheese category.
“This is a market ripe for disruption,” says Jesse Merrill, cofounder of Good Culture.
In 2014, the former VP of marketing at Honest Tea wanted to start his own company. He got his inspiration following a workout with his friend Anders Eisner, cofounder of Activate Drinks, which sells vitamin-packed sports drinks. The friends were eating cottage cheese when they realized their preferred post-fitness snack was far from satisfying.
“Most were watery or pretty slimy,” recalls Merrill. Other complaints high on his list were the ingredients—preservatives, additives, xanthan gum—and the large tub format that made portable snacking “a real hassle.”
“You always had to scoop it out for put into a bowl, then mix your own flavors,” he says. “No one was offering convenient on-the-go solutions.”
Presentation also left much to be desired. Big name brands such as Breakstone’s and Knudsen—both under the Kraft Foods Group umbrella—hadn’t updated their packaging in years. Knudsen still boasts a cozy 1975 hue of Pepto-Bismol pink, while Breakstone’s features a bland graphic of a spoonful of cottage cheese.
None of it was being presented in a particularly appetizing way or spoke to the modern day consumer, notes Merrill, who wasn’t surprised that “you had to look for the cottage cheese off in the corner somewhere” of a store. Just a few feet away, though, was usually an entire area devoted to various Greek yogurts: Chobani, Oikos, Dannon, and a dozen more—a sub sector that wasn’t commoditized until someone came in and made a premium product. The yogurt industry is, at current estimates, an $8 billion industry, according to a recent report by business analyst firm Sprout Intelligence.
The two friends had an epiphany: Why not put a better cottage cheese out there?
“We decided we want to be the Greek yogurt of cottage cheese,” says Merrill.
Making Cottage Cheese Trendy
Within six months, Merrill and Eisner executed their vision: a range of sweet and savory cottage cheeses with all the buzzword healthy trimmings.
The organic, non-GMO superfood would be sourced from grass-fed, free-range, so-called “respected” cows on a sustainable family farm in Wisconsin. Labels would feature simple ingredients that consumers would recognize: milk, cream, and water. There would be no additives, preservatives, starches, stabilizers, or milk protein concentrates. There would just be added sea salt to ensure a shelf life of 45 days (versus 100 days of its more chemical-reliant competitors).
“I wanted ingredients you could pronounce,” stresses Merrill.
They also restructured the consistency, opting for a thicker and creamier soft curd experience. The 100% recyclable 5.3 oz cups, meanwhile, feature a modern font and clear imagery of its trendy flavors: pineapple, strawberry chia, blueberry açaí, and kalamata olive.
Merrill, a self-described “savory fan,” is particularly proud of the saltier flavors. Extending beyond traditional fruity flavors is the precise innovation he found missing from the sector.
“There’s a way to do savory right,” he explains, adding, “it just requires some heavier lifting.”
Merrill and Eisner personally funded it at the start, with later seed money provided by the Eisner family (Anders is the son of former Walt Disney Company CEO Michael Eisner).
By March 2015, Good Culture introduced their product at Natural Products Expo West, a top-tier food convention in Anaheim, California. Right away, the year-old startup picked up interest from a highly coveted retailer: Whole Foods. Within a few months, their cottage cheese was on West Coast regional shelves. By early 2016, it extended to nationwide Whole Foods. Each 5.3 cup sells for $1.99. (Chobani averages around $1.50 to $2, depending on location.)
“Yogurt sales were starting to mature,” explains Merrill of the product hitting peak saturation. “It was the right time for it.”
Within six months, the cofounders received a phone call from 301 INC, the new business development and venturing unit of General Mills, which predominantly focuses on emerging healthy brands. The branch, along with CAVU Venture Partners, led a $3 million investment round of strategic funding in May 2016.
That General Mills took interest is no surprise. Big food companies increasingly look to diversify into more health and speciality brands, explains Brian Todd, president and CEO of food industry analyst firm The Food Institute. General Mills recently took a minority stake in granola maker Purely Elizabeth, while Unilever purchased Sir Kensington fine condiments.
“It’s definitely easier for them [to get into food trends] via acquisition or investments rather than start up a new division,” says Todd. “And some of the these products have seen some sort of a market test.”
But 301 Inc. does more than just invest in Good Culture; the unit, says Merrill, is “very hands-on” in helping with sales strategies, distribution, and consumer research.
“We like brands that are developing and delivering health benefits in new ways,” John Haugen, VP and general manager of 301 INC, tells Fast Company. “This is not your grandmother’s cheese, and not your grandmother’s brand.”
Haugen explains that Good Culture is being positioned in the protein snack category. 301 INC.’s goal is to have Good Culture be synonymous with healthy snack alternatives.
In that sense, I wonder, was there any thought as to not even labeling it cottage cheese? (What if we came up with a new term, like “bubbly cheese,” “dairy pearls,” or “heaven’s pinballs”?)
“We did think about it,” admits Haugen. “[We thought], ‘well ,where should this product live?’ But the fact of the matter is, it is cottage cheese. It wants to be a next-door neighbor to yogurt…. There is an opportunity to have [consumers] rethink the product.”
The Plan To Crush Yogurt
Part of Good Culture’s marketing strategy is touting cottage cheese’s advantages over its chief competitor, yogurt. With the tagline of “more protein, less sugar,” it heavily promotes the fact that its products have 19g of protein, versus 12g found in a traditional cup of Chobani. This disparity makes a difference to its core customer: the health and fitness enthusiast, the majority of which are millennials.
According to a recent report by PwC, 47% of those aged 18-34 have changed their eating habits toward a healthier diet, as compared to just 23% of those over 55. The definition of what constitutes a “healthy diet” varies, with millennials attributing more trend-based meanings (e.g. high protein, high vitamins) versus older consumers’ more traditional definitions (e.g. low fat). To that end, Good Culture stages tastings at gyms, marathons, fitness festivals, and fashion events, where the crowd is generally under 35.
The company also attempts to appeal to millennials’ conscious wallet. Good Culture donates 1% of the sale of each cup to nonprofits helping the environment. “We’re trying to live up to the Good Culture name,” says Merrill.
The multi-pronged approach has served the startup well. In 2015, Good Culture was in 300 stores. By 2016, it was 2,000. Today, the product is found in over 6,000 stores nationwide, including supermarkets like Publix, Sprouts, and Target, as well as in speciality retailers like Dean & Deluca and Murray’s Cheese. A company rep could not disclose financial details, but did confirm that sales in 2016 increased over 17 times versus the year prior.
Whole Foods is one retailer that has further increased its Good Culture offerings. While the supermarket chain sells other small brands in the cottage cheese category, it sees Good Culture especially promising. Whole Foods category manager Lee Robinson believes it’s the startup’s ability to take cues from other categories–such as convenient single-serve format– that have proven particularly successful.
There’s also Good Culture’s flavors, which Lee finds a “little more adventurous” than the average cottage cheese company. “[Whole Foods] customers tend to be on the early adopter side,” he says. “They are more willing to try new innovations in our store.”
Overall, fruit flavors sell the fastest, says Merrill, since “they’re more accessible to a wider group.” But the kalamata flavor is seeing substantial growth in stores like Whole Foods, thanks to what Merrill calls a “loyal cult following” of olive aficionados.
But Good Culture shouldn’t get too comfortable. Competition has solidified within the past year as more brands recognize an untapped market.
Breakstone’s now sells single-serve packs with fruit toppings, as do several up-and-coming startups. There are also plenty of new, interesting taste profiles on the scene. Massachusetts-based HP Hood offers savory cottage cheese flavors like chive, toasted onion, and cucumber with dill. Artisa, produced by Ohio’s Smith Dairy Products Co., comes in raspberry pomegranate, peach and apple cinnamon, and black bean with salsa.
Last August, Israel’s largest food manufacture, Tnuva, released its American cottage cheese brand Muuna–with flavors like peach, mango, and pineapple–in Northeast retailers like ShopRite and Stop & Shop. Less than a year later, its sold in 4,000 retailers.
The international company wanted a piece of the American dairy market, but not necessarily the more competitive categories.
“Everyone and their mother is in the yogurt business now,” says Gerard Meyer, Muuna’s CEO. Meyer most recently served as president of Sodastream USA.
Like Good Culture, Muuna ($1.49) comes in fruity flavors and single-serving cups. The Minnesota-produced product is quickly catching up to Good Culture’s success, although Meyer is quick to point out their distinctions: Muuna, for example, is “creamier” than its thicker-based competition, and at $1.49, the non-organic item is bit more accessible to mainstream consumers. Overall, though, he believes competition only helps better adjust consumers’ view of the cottage cheese.
“I think rising tides lift all boats,” says Meyer.
Merrill, meanwhile, says Good Culture plans to further elevate cottage cheese’s profile by adding new flavors in the coming years.
You likely won’t spot a kale or ketchup variety, but Merrill has a few unexpected flavors in the pipeline. “We’re always experimenting,” he says. “We want to make cottage cheese exciting.”
“I totally HATE cottage cheese,” writes one Muuna Facebook fan on the company’s page. “But I was very hungry after a tough workout [so] I decided to try the pineapple flavor–to my surprise it was very creamy and flavorful. I will be buying more.”