Good Culture Inc. is leading the comeback of cottage cheese.
Over the past five years, the organic dairy brand from Irvine—which offers a variety of multi-serve and single-serve cottage cheese products, as well as sour cream—has experienced “explosive growth,” with a 79% compounded annual growth rate, officials say.
That growth stands as an anomaly, as the country’s cottage cheese industry has seen declining sale as customers have gravitated more toward Greek yogurt offerings in recent years, according to industry reports.
Good Culture, founded in 2015, hit $70 million in sales in 2021—and it’s on track to reach $100 million this year, according to Good Culture’s CEO Jesse Merrill.
While it operates out of a small office in Irvine’s Eureka Building, its products line the shelves of over 10,000 stores, including Whole Foods and Target.
Most of its production is outsourced through contract manufacturers.
“Good Culture is the biggest contributor to cottage cheese growth in the U.S.,” Merrill told the Business Journal via email.
“We expect a growth rate well into the double-digits for the upcoming years.”
Series C Round
Late last month, the brand secured $64 million in a Series C funding round led by Colorado-based investment firm Manna Tree and Pennsylvania-based food investor Semcap Food & Nutrition.
The funding will help the company to expand its remote team of 18, and allow it to invest in marketing efforts. It will also provide liquidity to prior shareholders—including Cavu Venture Partners—and create new products, according to Merrill.
Other notables participating in last month’s funding was actress and longtime Good Culture fan Kristen Bell, who reached out to the brand on Instagram.
Prior investors include 301 Inc., the venture capital investment unit of General Mills (NYSE: GIS). Semcap Managing Partner John Haugen was previously with 301 Inc.
The company’s last reported funding round was in 2019, when it raised $8 million. It has raised over $77 million since its founding, according to reports.
‘Food as Medicine’
The idea for Good Culture was born after Merrill was diagnosed with ulcerative colitis (UC), an inflammatory disease with no known cure.
This prompted a complete overhaul of his diet. For three years, he ate nothing but fermented foods, organic meat, fruits and vegetables—and cultured dairy.
“Within two months of living on this diet, all my symptoms went away without taking any drugs, and three years later, my colonoscopy showed no sign of UC,” he said. “It was as if I never had the disease. That said, I’m a big believer in food as medicine.”
A Forgotten Favorite
Merrill is a seasoned marketing executive. He previously led the marketing charge of the bottled tea company Teany, founded by electronic musician Moby in 2002, and helped to sell it in under two years.
Then, he joined Honest Tea as head of marketing, where he “learned how to build a purpose-led brand from the ground up,” he said.
He helped the brand grow from a valuation under $9 million to $70 million in less than five years. Honest Tea was sold to Coke in 2011.
In 2014, Merrill and his co-founder, Anders Eisner, decided to target a $l.1 billion opportunity hiding in plain sight on the shelves of every grocery store: cottage cheese. The product was far more popular than yogurt back in the 1970s.
“Cottage cheese was an overlooked superfood with more protein and less sugar than yogurt, but it lacked relevant innovation and brand appeal,” he said.
In addition to being healthier than other cottage cheese products, Good Culture says its core offerings include 60% more protein per serving than leading Greek yogurt brands, with 60% less sugar.
Reducing Animal Harm
Addressing health through nutrition is not Good Culture’s sole mission. It also aims to create dairy products that are more sustainable and ethical.
A Certified B Corporation as of 2020, Good Culture sources its dairy exclusively from family farms in the Midwest.
The farms prioritize pasture-raised livestock and regenerative agriculture, a farming practice whose advocates claim it can reverse climate change.
The reason? Most of America’s dairy cows are confined, creating an “animal welfare problem and an environmental problem,” Merrill explained.
“This broke my heart, and I knew that I had to fight to change the food system. Our mission is to make healing real foods available to all without hurting our planet or animals. This guides every decision we make.”
To further embody its mission of sustainability, Good Culture also joined 1% For the Planet, an international organization whose members contribute at least one percent of their annual sales to environmental causes.
In the coming months, Good Culture plans to make some “strategic hires” across several functions, who will help to expand awareness in marketing, manufacturing, capacity and more, official said.
