- Cottage cheese brand Good Culture just closed an $8 million funding round led by CAVU Venture Partners and supported by significant investments from General Mills' 301 Inc. and Almanac Insights, according to a release.
- The funding is intended to expand distribution and product development to help the brand grow in the dairy category, the company said. CAVU previously funded the company $5.1 million in 2016, a year after the brand was founded.
- In the last four years, the brand has experienced more than 500% growth and can now be found in more than 11,000 stores across the country.
In the dairy aisle, cottage cheese doesn't get a lot of love. While plant-based products and yogurt have been seeing significant growth with investment and innovation over the last several years, sales of cottage cheese hasn't been as lucrative. But Good Culture is changing that.
In a consumer market interested in added protein and better-for-you ingredients, shoppers weren't buying that much cottage cheese, which has three times the amount of protein and about half the sugar of yogurt. Good Culture saw this underutilized space as an opportunity and jumped into the market. By releasing a certified organic, grass-fed, stabilizer and additive-free cottage cheese, the company is trying to reinvigorate the cottage cheese market.
According to Food Navigator, Nielsen data showed that Good Culture was the only cottage cheese brand bringing in younger consumer segments. About 62% of the brand's dollar sales were coming from millennials and younger members of Generation X — those that aren’t typically associated with cottage cheese. In light of its success, the brand has recently added sour cream and a 6% fat double cream cottage cheese to its product line up. That high-fat product is intended to draw in the growing number of consumers on the keto diet.
This continued growth and market penetration seems to have caught the eye of General Mills, who invested in the initial round of funding in 2016. This second round of funding shows the company has solidified its interest in Good Culture as its core dairy brands like Yoplait continue to struggle against other startups, such as Chobani. In recent years, General Mills has turned to investing in startups as they continue to grapple with declining sales and weak growth. By continuing to financially support a rising brand that is disrupting the industry, the old stalwart company is staking its claim and potentially the future of its dairy segment on the continued success of Good Culture.
General Mills is simultaneously placing its bets on plant-based dairy and has led several funding rounds for Kite Hill in partnership with CAVU. The company seems to be keeping its investments in companies with high growth potential in trending categories.
Good Culture markets its products as organic, non-GMO with active cultures and no additives, which checks a lot of boxes for today's consumers. If Good Culture continues to grow at the rate it has been, General Mills might consider incorporating it into its portfolio entirely, much like they did with meat snacks maker EPIC.