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The Digest

This Startup Raised $17 Million for Its Efforts to Resurrect Cottage Cheese Sales

Good Culture said its products have a clean ingredient list compared to legacy brands and sources its dairy from pasture-raised cows.
This Startup Raised $17 Million for Its Efforts to Resurrect Cottage Cheese Sales
Image credit: Courtesy of Good Culture
Entrepreneur Staff
News Director
4 min read

Jesse Merrill spends a lot of time thinking about cottage cheese.

"Cottage cheese is so versatile," he said. "Cottage cheese adds a high quality, clean protein boost to any recipe that you're making. We make cottage cheese lasagna, cottage cheese smoothies, cottage cheese baked ziti. I put cottage cheese in my peanut butter and jelly sandwiches. It tastes good on everything."

Odds are, you never think about, much less eat, cottage cheese. Once a staple food of dieters, the curdy dairy product has fallen out of favor with Americans, overtaken by yogurt and Greek yogurt. According to market research company Mintel, yogurt outsold cottage cheese in 2017 by a factor of eight to one, and only 20 percent of Americans said they ate cottage cheese more than once a month. Those rates went up in 2018, as 39 percent of consumers older than 18 said they ate cottage cheese in the three months to July (the rate dropped to 29 percent for members of gen Z).

Related: The Food Industry Is a 'Gold Rush' for Entrepreneurs, Says the Founder of Krave Jerky and a $40 Million Marshmallow Brand

But Merrill and his co-founder, Anders Eisner (son of former Walt Disney CEO Michael), saw the decline of the category as a huge opportunity, and in 2014 launched Good Culture.

"Cottage cheese is something that we both ate a lot of because of the high protein content," Merrill said. "But the category was in such a sad state. It lacked innovation and the packaging was dated. We thought there was a good opportunity to come out and reintroduce or re-imagine cottage cheese and make it relevant to younger consumer segments."

What that basically meant was cleaning up the ingredient list, removing additives such as potassium sorbate, guar gum and other stabilizers typically found in cottage cheese, which Merrill said also ups the protein count because it becomes less diluted. The pair also focused on animal welfare, sourcing their dairy from organic farms that pasture raise their cows. Finally, Good Culture's biggest curdle, ahem, hurdle, was texture, specifically the slimy, chunky texture that people dislike about cottage cheese. Using a proprietary formula, Merrill said, Good Culture feels creamier and thicker, more like yogurt.

Image Credit: Courtesy of Good Culture

Since its debut at Expo West in 2015, Good Culture has been gaining momentum. Its products are now found in about 11,500 stores, and said sales have grown 500 percent since 2016. (Muuna, another cottage cheese brand, launched in 2016.) The company has raised $17.8 million over four funding rounds, including from General Mills. Its best-selling products are its classic cottage cheese, pineapple cottage cheese and strawberry cottage cheese. Good Culture also expanded into sour cream. That looks like success by any measure, but the company is still fighting an uphill battle.

"Most people know what cottage cheese is, but there's a big consideration issue," Merrill said. "[We need] to get current users to think about it differently and people who aren't eating the category today to pay attention to it."

That comes down a lot to sampling, either convincing people that Good Culture's product is different than the one they're used to, or introducing cottage cheese to new consumers. That split is also represented in the company's online marketing. Older consumers who are aware of cottage cheese use Facebook, while younger people can be found on Instagram. Good Culture crafts different messages to each segment.

Related: These Childhood Friends Created a $100 Million Brand by Putting Frozen Greek Yogurt on a Stick

Merrill, who previously worked at Honest Tea and with the Eisners at Activate Drinks, said that a diagnosis of ulcerative colitis -- an autoimmune gut disease -- led him down a path of eating and promoting a clean diet. After switching from foods that were processed to natural ones, Merrill said a doctor gave him a clean bill of health.

"That was just proof that you can absolutely heal your body with real food," he said. "So our mission at the company is to offer real healing food to the masses, without hurting the planet or animals."

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