Craving a Comeback

by Julie Cook Ramirez

Cottage cheese makers lament the current state of the category and search for ways to spark a resurgence.

By definition, a Catch-22 is a “situation in which a desired outcome or solution is impossible to attain because of a set of inherently illogical rules.” In other words, a no-win situation. A paradox. Damned if you do, damned if you don’t.
That’s an apt description of cottage cheese industry. In order to turn around the downward slide the category has been experiencing for the past decade or more, manufacturers recognize they’ve got to make some pretty hefty investments — in terms of product formulation, packaging and marketing. Yet manufacturers find themselves largely unable to justify such investments because interest in the category has been so low and sales have been flatter than flat.
According to Chicago-based Information Resources Inc. (IRI), both dollar and unit sales of cottage cheese in supermarkets, drugstores, and mass merchandisers, excluding Wal-Mart, fell 2.3 percent during the 52-week period ending September 10, 2006. As a result, the cottage cheese category has largely been left to flounder, with little in the way of R&D or advertising dollars budgeted to spur its revival.
“We see very much the same products today that we’ve been seeing for decades,” says Tripp Hughes, director of sales and marketing, analysis and planning, Organic Valley Family of Farms, Baltimore. “It’s a category that is ripe for innovation, but there has not been a lot of activity in that area for a long time.”
Despite high hopes, cottage cheese makers were dismayed to find they didn’t even reap any measurable increase from the now defunct low-carb craze. “I thought that could be the sparkplug to get things going,” says Jed Davis, director of marketing, Cabot Creamery Cooperative, Cabot, Vt. “Instead, it’s just been chugging along, life as usual — but life as usual for cottage cheese hasn’t been as glamorous as what we’ve seen for some of the other dairy industry products.”
Of course, it doesn’t help that the product is most often mentioned in the media when someone is criticized for having “cottage cheese thighs” — not exactly a positive image for any product, particularly one that stands to gain the most by playing up its healthful attributes. While low-carb dieters may not have turned to cottage cheese in droves, the product’s high-protein/lowfat/high-calcium properties have not escaped the notice of renowned physician, Dr. Andrew Weil, whose books on longevity have garnered him many guest spots on CNN’s “Larry King Live” and elsewhere. In his daily “Recipe of the Day” e-mail, Weil featured Cottage Cheese Pancakes, which he touted as “quite a treat.”  
Across the board, cottage cheese makers agree that much of the category’s woes stem from the fact that the product is “an old-time product,” one that has never caught on with younger consumers. “The industry is going to have to figure out how to inject some life into this category and make it so that it’s not your grandmother’s diet food,” says Caragh McLaughlin, marketing director, Horizon Organic, part of Broomfield, Colo.-based WhiteWave Foods, a division of Dallas-based Dean Foods.
  $ Sales % Change (In Millions)vs. Year Ago Unit Sales (In Millions) % Change vs. Year Ago
Total Category $845.6 -2.3% 405.2 -2.3%
Private Label 303.8 -2.1 156.1 -2.9
Breakstone 86.1 0.9 32.7 -0.4
Knudsen 71.7 -5.1 26.5 -5.9
Breakstone Cottage Dbls 34.6 17.4 32.3 19.5
Dean’s 27.6 -2.4 12.2 -2.6
Friendship 27.3 -2.5 13.4 -1.7
Hood 22.6 -0.4 9.9 -3.5
Prairie Farms 16.9 -12.2 8.2 -8.8
Light ‘n Lively 15.1 -13.8 5.7 -14.8
Knudsen Cottage Doubles 13.0 17.2 10.5 19.5
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending September 10, 2006. SOURCE: Information Resources Inc.
That said, McLaughlin concedes that cottage cheese wasn’t even considered for a line of lunchbox-friendly products the company introduced in August 2004. “The products that we focused on were more kid-oriented products and cottage cheese typically just doesn’t fall into that area,” McLaughlin says. Specifically, the line contained single-serve smoothies, juices and banana-flavored milk.
“As a whole, cottage cheese is not as widely liked by kids as it is by adults,” says Paige Pistone, director, marketing, Friendship Dairies, Buffalo, N.Y., citing cottage cheese’s texture as a contributing factor in the product’s inability to capture — or recapture, as some claim — some of yogurt’s share of stomach.
“Cottage cheese was very popular until yogurt came along,” says Pete Kondrup, general manager, Westby County Creamery, Westby, Wis. “Yogurt pushed cottage cheese out of the picture. A lot of people have switched over to yogurt as their dairy product of choice.”
Smith agrees with Kondrup’s assessment: “The yogurt category has done such a terrific job in capturing the market that a lot of people who would eat cottage cheese are now eating yogurt.”
When it comes to appealing to the younger set, suggestions abound: Put Scooby-Doo on the package; make the product sweeter; or change the color of the product. However, Hughes is quick to point out that such endeavors could easily fall flat, if not accompanied by appropriate marketing efforts. “It’s one thing to come out with a kid-friendly cottage cheese in a small resealable cup with fruit on top,” Hughes says. “It’s another to run the full educational gamut that you need to get it into the consumers’ daily routine.”
Cottage cheese makers continually look to the yogurt category for inspiration. After all, both categories have something in common: They have long been known as healthy foods, those often embraced by dieters or obsessive exercisers. The main difference, of course, is that yogurt has been able to bridge the gap and become a perennial favorite of consumers from virtually every demographic and economic group. What’s more, it has come to be eaten during virtually every daypart for virtually every eating occasion: breakfast, lunch, dinner or snack.
Cottage cheese hasn’t been able to achieve that same feat, but hat doesn’t mean processors have given up on the product. On the contrary, Dan Smith, vice president of sales and marketing for the Dean-owned Louis Trauth Dairy, Newport, Ky., is quite bullish about the category’s future. In part, that’s due to the success of his company’s flavored varieties, which have included, at varying times, pineapple, chive, fruit cocktail and garden salad.
Smith predicts that cottage cheese “will find its little happy arena” again. “Everything has a pendulum swing to it,” he says. “People rediscover cottage cheese more so than any other category. Eventually, it will become en vogue again, but it is a challenge every year to maintain your sales and look for new growth.”
Orrville, Ohio-based Smith Dairy Products is hoping a new processing method will generate some buzz. “The slow-cooking method gives the fat-free cottage cheese the same flavor, consistency and quality as our regular and lowfat cottage cheeses,” says Penny Baker, Smith’s marketing manager.
Smith’s cottage cheese takes about 18 hours to process from fresh milk to finished product, compared to the more common practice of quick-setting that takes about half that long. “The quick-set process often produces cottage cheese with a grainier texture and less natural flavor,” Baker says. “Our slow-cooking technique assures that the cheese is clean, creamy and slightly salty, with a mild cultured or buttery flavor.”
Without further innovation, the category is likely to trudge on as it has over the past several years, with manufacturers celebrating the years in which sales remained flat, rather than down. Simply put, cottage cheese’s future fortunes are dependent upon processors’ willingness to breathe new life into the category through new formulations, packaging and marketing initiatives.
“You either to make the investment or be satisfied with flat to declining sales,” Baker says. “At some point, one of us is going to have to say, ‘let’s be the innovator.’”  
Julie Cook Ramirez is a freelance journalist based in the Chicago area.
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