“We are perfectly positioned for where the consumer is going, not where the cottage cheese consumer has been for the past 50+ years,” co-founder and CEO Jesse Merrill told FoodNavigator-USA. And by that he means the products are, “pasture-raised - no confined animals - no stabilizers, no preservatives, no thickeners, high protein, low sugar”.
The company launched in August 2015 with its organic range and then rolled out a natural range last year. “Both are premium products but one has the USDA organic seal,” said Merrill. While the organic range was first, and the 2017 sales showed it represented 55% of the business, the natural range is expected to surpass this in 2018.
“We’re predicting organic sales to be 30% this year, while natural will be 70%,” said Merrill.
The products are in over 9,000 stores now, including Target, Ahold, Walmart, Publix, and more. “We are a growing national brand with mass appeal,” he said.
A flat category with substantial long-term growth opportunities
The cottage cheese category is worth $1.1 billion, and this has stayed flat for several years, said Merrill.
“While the category has been flat, Good Culture is bringing new users into the category and driving a higher buy rate with existing consumers,” he said.
The purchase rate is key to the category, with data showing that almost one in two households buy cottage cheese at least once a year, but the rate at which they buy it has been low. In contrast, household penetration for yogurt is about 75%, and the rate of purchase is significantly higher, which helps explain why the yogurt category is worth $8 billion.
Segmenting the consumer base shows that awareness of cottage cheese is high among Boomers and Gen X, but lower with Millennials and even lower with Gen Z.
“Boomers are more open to eating it, but the trick is to get them to trade up from what they have been eating for so long,” said Merrill. “For Gen X there is a textural barrier that comes from them eating it as kids but not liking it for some reason. We’re in a great position at Good Culture on this because our formulation eats more like a yogurt with soft curds and a velvety texture.
“We get a lot of consumers emailing us saying they thought they didn’t like cottage cheese until they tried Good Culture.”
Sales data shows that Good Culture is the number one brand for incremental dollar sales growth in MULO (conventional retail) Channel, he said.
A rising tide lifts all boats
Good Culture was the first-mover in terms of cottage cheese category disruption and other brands are now entering the category with cottage cheese in single serve packaging. “We are excited to see other players jump into the space,” said Merrill.
The company recently launched new varieties, including mango for the organic range and peach for the natural range. It does offer one savory product – Kalamata olive – which Merrill says has a “cult following”, but it has limited distribution and savory is not currently a focus for the company.
The company is also planning a 2% range (currently the products are all full fat).
With all of this success and category potential, is there anything that keeps Merrill up at night? “Scaling our manufacturing fast enough to keep up with demand,” he said.