Revitalizing a cottage industry - cottage cheese

Dairy Foods, June, 1997 by Jerry Dryer

Pray tell: Why have most dairy foods processors tossed in the towel on cottage cheese? The standard answer I get--"People just don't buy it anymore"--is pretty lame. If the facts be known, no one is seriously marketing cottage cheese. A small dose of Marketing 101 and we could be selling a lot more cottage cheese. It has such huge potential.

To realize this potential, you need to think beyond cottage cheese. Last month, I talked about getting out of the dairy business and into the snack food business, or the entree business or the dessert business. I encouraged you to think outside of the box called "dairy."

Let's think about the possibilities for cottage cheese. We can start by learning some great lessons from yogurt. After all, that's the product most people blame for the decline of cottage cheese. (From my vantage point, yogurt didn't kill the cottage cheese business; the cottage cheese business committed suicide.)

Yogurt does have one distinct advantage: two powerhouse marketers in Dannon and Yoplait. They are packaged goods companies, not dairy companies. They make my point: Get out of the dairy business. They have 35.9% and 20.6% market shares, respectively, according to IRI data for the 52 weeks ending March 2.

If we're going to reverse the decline in the cottage cheese business, dairy companies will need to create their own new products, new positioning and market support. And it can be done. I've seen a company double its cottage cheese sales by simply featuring it in a retailer's weekly newspaper food ad. Not a big investment. No new products. Not even any usage suggestions. Same crummy-looking carton. But sales jumped for about two weeks.

So, why not a feature ad a month? Maybe even feature a new flavor each month. Feature a new use. How about more single-serve packaging?

Several mornings a week, I eat half a carton of cottage cheese for breakfast even though it's not terribly convenient. Alternate mornings, it's a carton of yogurt. Yogurt's gone, carton's gone. No leftovers to deal with.

New product ideas for cottage cheese abound. You're already thinking, sure Dryer, we've tried them and they've all failed miserably. Agreed. But 9 times out of 10, the product didn't fail; the lack of marketing support left your wonderful new product idea sitting on the store shelf.

What can we learn about marketing support from the successful yogurt marketers? For one thing, with a typical yogurt case containing 130 or more SKUs, yogurt companies have been forced to generate some pretty slick package graphics to stand out in the crowd.

Beyond that, folks in the yogurt business are marketing products tailored to kids, and as a breakfast, a dessert' a snack. They're selling yogurt 4-,5-,6-, and 8-ounces at a time. They're adding beneficial cultures. They're creating tantalizing flavor combinations. They're making it available with mix-ins, thanks to dual-compartment packaging. They're even making it available in vending machines.

Cottage cheese has the same opportunities. The cottage cheese business can be revitalized and made profitable once again. There's no better time than right now to get with it.

     Yogurt Leaders
(52 weeks ending March 2)

                Sales           Market
               (millions)       Share

Dannon          $596.6          35.9%
Yoplait          342.5          20.6
Unilever         105.3           6.3
Kraft             67.4           4.1
Colombo           54.2           3.3
Nabisco           46.8           2.8
Stonyfield        28.0           1.7
Borden            21.2           1.3
Private Label    251.8          15.2

TOTAL          1,660.9

Source: Information Resources Inc.