Speaking during the company’s third-quarter earnings call last week, Steve Cahillane, chief executive officer of The Kraft Heinz Co, said the category is facing growing pressure despite its own Philadelphia continuing to gain market share in the US. However, overall consumption is declining as consumers migrate towards cottage cheese and other protein-focused options.
The shift highlights a broader trend within dairy, where Cottage cheese has been reinventing itself through new formats, younger consumers and rising global demand. A wave of challenger brands has helped drive growth while social media has helped to drive demand.
In the US, cottage cheese sales topped $2bn in 2025, a change of 19.2% in dollar terms and 13.9% in volume, according to Circana.
Globally the category is set for 6% CAGR, with North America the market share leader, followed by Europe and Asia Pacific, according to Cognitive Market Research.
Cahillane acknowledged that the pricing moves for Philadelphia made by the company proved to be deflationary to the category and it was adjusting this.
“I’d say what Philly needs from a category perspective is more innovation, because it’s very clear where we’re losing as a category. We’re losing to cottage cheese and other more protein-forward products. So we need to do more innovation around what the consumer is looking for, vis-à-vis protein, vis-à-vis flavors, vis-à-vis overall innovation,” Cahillane said.
“The brand itself is an incredibly strong brand. There’s nothing wrong with the brand. It’s just that the category is under some pressure from consumers switching out of cream cheese into cottage cheese and others. And that’s very addressable, but it’s going to take just a little bit of time.”
Philadelphia has already been broadening its offer to meet changing consumer demands. The brand recently launched a lactose-free cream cheese in the US, and is continuing to expand distribution.
The company has already released new flavour innovations in the US including Mike’s Hot Honey whipped cream cheese, salted caramel and a seasonal cranberry orange.
Kraft Heinz is one of the world’s largest food and beverage companies, with approximately $25 billion in net sales in 2025 and a portfolio of iconic brands enjoyed by consumers in more than 40 countries. While it has distribution of Philadelphia in North America Mondelez owns and manages in Europe and internationally.
Separately, Kraft Heinz has also revealed it is selling its North America coffee business for $650 million but will retain a 30% non-controlling equity stake in the business.
