Cultured products: data shows the cultured category growing, with cottage cheese the shining star

Dairy Foods, May, 1999 by Donna Berry

Whoever would have thought a few years ago that cottage cheese sales could truly turn around? A declining category since 1986, cottage cheese retail sales posted 3.4% volume growth in 1998, according to the International Dairy Foods Assn.'s Cultured Dairy Products Report. This is the strongest volume growth for any cultured product category.

This growth is a direct result of bringing new users to the category through the introduction of innovative products like Cottage Doubles from Kraft Foods Inc., Northfield, Ill., and FruitStirs from HP Hood Inc., Chelsea, Mass. Both products combine fruit with cottage cheese, the first in a side-by-side style and the second as fruit-on-the-bottom.

"Blending cottage cheese with fruit, and packaging it like yogurt, has started revitalizing the cottage cheese market," says Terri Rexroat, product mgr. with a culture supplier.

What currently is selling the best are low-fat and regular-fat varieties, which respectively represent 38.9% (up 5.0%) and 46.4% (+3.6%) of volume sales. Single-serve containers appear to be the container of choice for innovation in cottage cheese. And besides adding fruit, manufacturers are also exploring the use of savory flavors such as chives, vegetables and cucumber.

The U.S. market can expect to see continued innovation in the cottage cheese segment. "A fat-free fresh cheese dessert can be made by blending homogenized cottage cheese curd with fruit prep, pectin and cream flavor," says Rexroat. "This unique product is a tasty, healthy dessert or snack that puts an American twist on a European classic."

New inclusions, new packages for yogurt

Yogurt manufacturers have not been real creative in their offerings since dessert flavors debuted a few years ago. However, in the past year, two Minneapolis-based companies have taken giant steps and have rolled out two truly different yogurts.

Marigold Foods Inc. developed a decadent yogurt containing chocolate truffle cups along with fruit puree. This product marks the first time a chocolate inclusion is actually part of the yogurt and not simply located in an attached compartment for stirring in at the time of consumption. It is also the first time chocolate truffles are being added to yogurt.

Under its Yoplait brand, General Mills introduced a unique squeezable tube of yogurt for kids. Go-Gurt, properly named to convey its portability, is a breakthrough formulation making it the only yogurt on the market today that can be enjoyed refrigerated, frozen or thawed.

In general, the yogurt category is faring well. The regular-fat variety led the category in 1998 with the strongest volume growth (+7.5%), while low-fat maintained the highest dollar (52.6%) and volume share (51.7%).

Growth in the regular-fat category, also known as whole milk yogurt, can be attributed to consumers' increased interest in organic yogurt. Organic and "all-natural" manufacturers like Stonyfield Farm Inc., Londonderry, N.H., Horizon Organic Dairy, Longmont, Colo., and Brown Cow West, Antioch, Calif., have revived this variety. Whole milk organic yogurts are extremely attractive to parents looking for all-natural, nutrient-dense foods for infants and toddlers.

Brown Cow takes its all-naturalness serious. The company uses only milk from brown Jersey cows, which is richer and has a higher protein content than milk from the more common black and white Holstein cows. According to the company, sourcing Jersey milk on a regular basis is quite challenging because almost all milk produced in the United States comes from Holsteins. Jerseys produce less milk and there are fewer cows, but "Jerseys simply produce better milk, which makes really rich, creamy yogurt," says Steve Ford, president.

The company self-imposes another restriction, making sourcing even more difficult: The cows cannot be treated with any bovine growth hormone.

Brown Cow also uses only natural sweeteners. "We use maple syrup, which costs about five times as much as cane sugar," says Ford. "Cane sugar is easier to work with, but it doesn't fit the all-natural profile of our products."

These strict formulation guidelines are paying off for Brown Cow. The company posted 37% growth in 1998, and expects continued growth in 1999.

Category leaders like General Mills recognize this trend toward all-natural yogurt, and have recently joined the organic movement with the introduction of two varieties in multi-serving 32-oz containers - plain and vanilla.

The dairy industry can expect to see more mainstream yogurt manufacturers developing a premium, all-natural line for the growing "green" consumer.

Suppliers are making this possible through the introduction of specialty starches for yogurt stabilization. These starches replace gelatin and non "all-natural" hydrocolloids, resulting in a simpler ingredient label to satisfy health-conscious consumers.

Another formulating trend anticipated in the yogurt category is toward a broader range of sweeteners that are safe for diabetics. This includes the use of polyols like sorbitol, maltitol and erythritol.