Cottage cheese is traditionally eaten plain or paired with breakfast among U.S. households, but over the past a few decades, it’s been slowly falling out of fashion due to changing consumer behaviors and intensified competitions mainly from yogurt. Now emerging cottage cheese brands touting nutrient-dense ingredients and sustainable agricultural practices are staging a massive comeback for the category that was once twice the size of the yogurt market.
With a fresh $64 million cash injection led by private equity group Manna Tree Partners, certified B-Corp Good Culture, which has been producing flavored cottage cheese and sour cream through regenerative agriculture since 2015, is ready to shake up the diary aisle by building a sustainable cultured foods platform.
Sylvio Pett Neto, director of Manna Tree, believes investing in Good Culture reflects their continuous commitment to improving human health. “When sourced sustainably and produced without additives, cultured dairy products like cottage cheese and sour cream are an excellent source of amino acids, B vitamins, and minerals,” he said. “Good Culture’s traction and growth demonstrate the rising generation’s commitment to transparent, better-for-you brands. It is the fastest growing cottage cheese brand in the natural channel, and the biggest contributor to cottage cheese growth in the U.S.”
Organically Nurtured Investor Relationships
Good Culture’s series C round also involves participation from SEMCAP Food & Nutrition, a growth stage PE founded by former 301 Inc.’s managing director John Haugen, and actress Kristen Bell. Both SEMCAP and Manna Tree joined the company’s board as a result of their investments.
Jesse Merrill initially cofounded Good Culture out of his desire to use food as functional medicine to combat autoimmune disease. Within five years since launch, the company has experienced 73% CAGR while increasing distribution to over 10,000 major U.S. retail stores. The latest funding, Merrill said, will help expand his team, increase brand awareness through marketing, and enhance manufacturing, as well as provide liquidity to some early shareholders, including CAVU Venture Partners.
Most of these investor relationships are nurtured organically, including the one with ‘The Good Place’ star and cofounder of snacking brand This Saves Lives, according to Merrill. “Our relationship with Kristen Bell started on Instagram. She reached out to our team to ask if we were available in Europe in advance of a shoot she was doing overseas. Of course, we were beyond thrilled to learn that Kristen was an organic fan of our products,” he wrote me via email.
“We stayed in touch and learned that Kristen was a super fan, sharing Good Culture with her friends and family, including her husband who she said was also hooked. As we were wrapping up our series C funding, we brought her into conversations about our impressive year-over-year growth and our commitment to nutrient-dense real food, sustainability, and regenerative agriculture, and she [was] committed to becoming an investor of the brand.”
Similarly, Haugen was an early investor of Good Culture while at General Mills’ venture arm, and has been supporting the brand over the years. “We are thrilled to join a like-minded partner in Manna Tree in Good Culture’s series C. Good Culture’s commitment to building a sustainable future for dairy perfectly aligns with the SEMCAP Food & Nutrition mission,” said Haugen, who also co-led Purely Elizabeth’s recent $50 million series B round. “Our team has partnered with Jesse for the past six years, which have been defined by explosive growth, and we are thrilled to continue to elevate his ambitious vision and mission for the brand.”
‘A Healing Cultured Foods Company’
While the number of U.S. cottage cheese consumer is projected to increase by approximately one million between 2022 and 2024, according to Statista, fueling peer brands such as Muuna to amp up their competitiveness, Merrill believes long-term opportunities for Good Culture lie in portable, high-protein snacks.
Without disclosing specific R&D plans, Merrill said: “We are evolving from a cottage cheese and sour cream brand to a healing cultured foods company.
“Expansion and best-in-class innovation will continue to be primary areas of emphasis for the company. We’ll also deepen our commitment to real food and sustainable, regenerative farming practices through our partnerships with 1% for the Planet and B-Corp, and continue to build out a pasture-raised supply chain.”