By Gerelyn Terzo, Global AgInvesting Media
L Catterton, a consumer-growth focused private equity investor boasting $37 billion in assets under management, has entered into a definitive agreement to acquire a majority stake in Austin, Texas-based Good Culture, valuing the cottage cheese pioneer at $500 billion, according to a report in the Wall Street Journal. Fellow private equity firm Manna Tree, which is part of the existing investor lineup, is expected to build its stake alongside L Catterton.
This deal highlights the rising private equity appetite for high-growth, health-oriented food companies as well as demand among American consumers for better-for-you products. Good Culture, a clean-label cultured dairy brand credited with modernizing cottage cheese, has experienced explosive growth that has helped reignite the broader category.
With L Catterton stepping in as a majority owner, Good Culture is positioned to expand production and keep pace with burgeoning cottage cheese demand from retail partners nationwide. The additional capital is expected to support a broader distribution push as well as continued growth, making the brand’s products more widely available as the cottage cheese category becomes more relevant.
Andrew Taub, a Managing Partner of L Catterton’s Flagship Fund, commented, “Good Culture has built an extraordinary niche in cultured dairy, transforming a once-dormant corner and making cottage cheese into one of the most exciting and versatile items in food. The brand’s authenticity, product quality and strong consumer resonance create a compelling opportunity to scale the business further, while preserving what makes Good Culture distinctive.”
Cottage cheese is booming. Over the past three years, Good Culture sales have nearly quadrupled, while the cottage cheese category has ballooned nearly 60 percent, according to the announcement. The majority investment from L Catterton marks a coup for the CPG brand, positioning its trendy products for accelerated expansion through greater production capacity, distribution network and product innovation.
Good Culture Co-Founder and CEO Jesse Merrill stated, “Today marks a monumental moment for Good Culture as we embark on this next phase of growth with L Catterton. In 2014, I realized there was massive whitespace in a stale category that was lacking innovation. Our mission with Good Culture was to modernize cottage cheese with real, simple ingredients, and redefine it as a versatile and craveable high-protein food.”
L Catterton Managing Director Michael Hutchings said, “This partnership formalizes a relationship we’ve built with Jesse and his investors over the past several years, and is underpinned by our deep conviction in the durability of the tailwinds driving growth in the category. We see significant runway ahead for Good Culture and are excited to support the team as they expand the brand’s reach.”
Manna Tree Co-Founder and Managing Partner Gabrielle (Ellie) Rubenstein also weighed in, saying, “As the health and wellness sector continues to grow with heightened interest in protein and clean-label products, Good Culture has emerged as a clear leader in the consumer movement towards better-for-you brands. We’re excited to see what Good Culture and L Catterton will achieve together to unlock further growth and bring Good Culture products to more consumers.”
In addition to L Catterton and Manna Tree, the Good Culture investor lineup extends to SEMCAP and Anders Eisner.
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