According to Circana, cottage cheese was the third fastest-growing edible dairy segment in the US in 2023, experiencing double-digit (11.7%) brand growth and mid-single digit (5.7%) private label growth.
In 2024, the category continues its upward trajectory: in the year to May 19, 2024 volumes are up 13.5% and pricing has increased by 16%. This growth is happening at a time when dairy prices have started to moderate, though cottage cheese prices have grown, at 2.2% in terms of US dollar price per volume.
So what does this all mean?
“The category is still doing very well, and that's been consistent now for about the last two and a half, three years,” explained John Crawford, Circana’s SVP of client insights for dairy. “In actual per-capita consumption, it’s grown about 3.5% per year and is now at about 4.25% per year. That’s pretty strong growth – you gain almost a full eating per capita per year.”
And in terms of household penetration, 45% of US households buy cottage cheese today, he added. “That’s up 2%."
Cottage cheese’s appeal has grown in recent years as consumer awareness around health and nutrition has also increased. A low-calorie, high-protein, natural snack, the humble dairy curd ticks a lot of boxes. But it was in 2023 when the category rallied exponentially, in large part thanks to TikTok.
How social media made cottage cheese cool
It may be hard to imagine the lumpy-looking, sour-tasting dairy product would become a social media sensation; yet that’s exactly what happened when TikTok foodies started to exchange their unique recipes for cottage cheese ice cream.
Used to inject protein and other nutritious ingredients into an otherwise indulgent frozen dessert, the cottage cheese ice cream trend played a major role in lifting the segment.
“It’s not just dollars that are driving growth or pricing; it’s absolutely been usage, and social media has given consumers new ways to use this product,” Circana’s Crawford told us.
“Was it social media driving and lifting an entire category? It’s something that I didn’t think was possible, but now I know that it is.”
“I always tell brands, if you find one more usage for your product, you can drive your whole brand,” he added. “With cottage cheese, you can see in-home consumption is up because TikTok told consumers how to use the product [creatively].”
And while it started as a fad, the category’s sustained growth suggests that cottage cheese purchasing has become a long-term trend in dairy.
But are food manufacturers making the most of it?
Crawford told us that the majority of US cottage cheese sales are generated by private labels (36%) and the brands Daisy (20%) and Good Culture (10%); these three players are also the category’s main producers in volume terms. “Private labels, Daisy and Good Culture are seeing tremendous growth; they are the ones that are really driving the overall category growth,” Crawford said.
But despite its recent growth, the segment remains the second smallest in the top 15 dairy categories that Circana tracks, behind categories like sour cream, refrigerated whipped toppings, cream cheese, dips, and butter, with fluid milk and yogurt being the two biggest-selling dairy categories in the US. And so, the size of the cottage cheese market makes product innovation risky.
How are US cottage cheese makers innovating?
“When we talk about innovation, I mean, there’s some,” Crawford opened. “There’s been some innovation around fruit, for example. Pineapple is the biggest flavor by far outside plain. Daisy has come up with fruit-on-the-top – packed inside a lid – which the consumer can blend in; other brands have played around fruit-on-the-bottom.”
Texture has also been of interest to those looking to attract new consumers to the category, with Kemps launching smooth cottage cheese, as Crawford explained. “Some consumers dislike lumps. The interesting thing with Kemps is that not only they came up with smooth cottage cheese – they launched it in kids packs, branded with popular cartoon characters, e.g. Transformers and Peppa Pig.
“Those didn’t really do much, but I think it was an interesting dynamic to market cottage cheese to kids.”
Overall, the level of innovation comes down to fruit (mostly pineapple), curd size (small and large), and fat content (low, full, and fat-free). As for savory options such as chives, these ‘are not really taking off’ at retail level, Crawford told us.
Yet on TikTok, social media users are experimenting with adding cookie dough and mustard to cottage cheese, suggesting there’s appetite for unusual and savory flavors.
“I think there’s an opportunity here, but because the category is so small, the majority of the category is going to be the traditional plain, small, low-fat and larger sizes,” Crawford said. “For flavors, it becomes a long tail business down the road; pineapple has been successful, but the rest, not so much.
“And so it’s tough for a brand to innovate around a category that is still pretty small.”
He added that both brands and private labels are facing the same manufacturing challenges such as whether to invest in dedicated production lines to make flavored cottage cheese, likely at smaller volumes, and that’s before it comes to pricing and gauging the target market.
Evolving the category: from digestive claims to attracting Gen Z
But while the category’s size appears to be a barrier to innovation, there’s one thing that food producers can tap into right now: marketing.
“The marketing of cottage cheese is still pretty basic,” Crawford said. “Protein is probably the main claim that we are seeing, but there’s not much around calcium, for example. We are not seeing anything around probiotics either, and certainly within dairy, digestive claims are winning. Yet we don’t see that on cottage cheese. Potentially, that’s an opportunity that’s being missed.”
“Rather than innovating around products, manufacturers should innovate around claims.”
As for which US consumers purchase cottage cheese, older generations i.e. Boomers and retirees have purchased the largest volume of cottage cheese in the past year to May 19, 2024 according to Circana, followed by Gen X, Millennials and Gen Z.
However, Gen Z and Millennial consumers have been buying more cottage cheese in the past year, with Gen Z recording a double-digit increase in buying.
Will cottage cheese continue to grow in the US?
While consumers have been coming up with innovative ways to leverage cottage cheese, manufacturers haven’t gone to market with a cottage cheese ice cream, for example – and it’s ‘plain’ to see why.
“It’s really hard for a manufacturer to launch a mustard-flavored cottage cheese, because it comes down to consumers actually buying the product,” Crawford said.
“Cottage cheese is pretty versatile, that’s where the benefit comes in for consumers. It’s the versatility of usage that becomes really important, the ideas behind how consumers actually use this product and it being more top-of-mind.”
So how is the US cottage cheese market shaping up in for the rest of 2024? Crawford told us he didn’t have official projections, but would expect growth to continue, likely in the high single digits.
“I don’t know if it’s going to sustain double-digit growth, but I do expect it to continue to be a bright spot within dairy,” he explained. “I would probably expect it to stay up in single-digit terms through the rest of the year, and I don’t think we are going to start to see declines.”
With the federal government looking to ban TikTok in the US, would that affect cottage cheese sales? “I don’t think that will matter,” Circana’s SVP of client insights-dairy said. “There are plenty of other platforms. And plus, cottage cheese is now in consumers’ purchase cycle, so I think it’s going to stay.”
In terms of household penetration, it is also unlikely to see steep growth, he added, say from 45% to 60%. But single-digit growth is on the cards.
