Growing Goodles: Deluxe Line Launch Set To Double Consumer Base

Goodles is turning the box on its head once again and looking to shake out a notch more of nostalgia for a new consumer group.

The better-for-you mac and cheese brand is entering a new arena with today’s launch of a 9 oz. Deluxe format that it believes offers a market growth opportunity equal to its flagship line. The new product comes in two varieties – Shell We Dance and Ched Over Heels – and is rolling out to Target stores where it retails for $4.99.

The product maintains many of the attributes of the brand’s flagship product – including 21 nutrients from vegetables, 6 grams protein, 7 grams fiber with prebiotics – in addition to being low glycemic index and Clean Label Purity Award Certified.

However, due to formulation challenges with the liquid cheese-format, the new line is not low sodium. The brand’s dry powder cheese product was created and iterated within the Santa Cruz, Calif.-based brand’s in-house test kitchen, but the R&D process for the squeezable variety required larger, commercial scale test runs to ensure smooth results.

“You’re running huge batches [of cheese] at a time and hoping that that was it… [if] it’s not, you’ve got to do it again and again,” said co-founder Jen Zezsut. “There’s just a logistical piece to this format that is a bit tricky, but there are natural ways to get shelf stability for this type of cheese sauce – unfortunately, salt is a big part of that.”

Capturing A New Share Of Consumers

In moving to the new format, Goodles is on the hunt for incremental sales to the category. Zezsut said they’ve run the numbers and 48% of consumers reported they did not purchase Deluxe boxed mac because of the nutritionals: “The guilt is really high because of the perceived lack of health benefits.”

But in addition to an opportunity to bring lapsed, health-conscious consumers back to the set, Goodles consumers said they were also seeking out the “squeezy cheese” style. She said in a recent survey, 84% of its customers claimed they wanted Goodles to reinvigorate this subcategory and 75% said they’re still going to buy both, meaning the launch would add yet another incremental group to its customer base.

“All of our buyers say the same thing: ‘You’re going to sell both,’” Zezsut claims.

But the dynamics between the dry and wet cheese formats are worth noting. According to Zezsut, there are some regional and retailer-specific differences between the two subcategories: Some see sales that lean heavily into the wet format while others see the opposite with the dry products. However, she said those differences play out at such a case-by-case level and emphasized that the new format will roll out to retail partners nationwide.

Zezsut is confident that Goodles has the winning recipe to take on this new subcategory, pointing to the three-year-old company’s track record so far. In addition to raising $13 million in September, which included backing from L Catterton, Springdale Ventures and over 100 musicians, actors, athletes and influencers, among others, she claims 75% of the boxed mac and cheese category growth is coming from Goodles at the moment.

At retail, she said one mass channel partner has reported that 81% of the brands sales are incremental to the category, meaning the customer had never bought mac and cheese of any type at that outlet before; additionally, another club retail partner said 84% of the brand’s sales in its stores have also been incremental to the set.

“All of that success is just in the dry [powdered cheese] mac category – that dry cheese category is only 28% of mac and cheese,” said Zezsut. “Interestingly, Deluxe, or Squeezy cheese… this wet [cheese] format is also 28% of the category – exact same size and each one is almost a billion dollars.”

Sticky, Sliding Category Sales

The category could use a boost, at least according to Circana data, tracking total U.S. sales in natural, MULO and convenience. Over the past year, the original stovetop format saw sales decline 2.4% to a total of nearly $675 million while units declined 9%; comparatively, the Deluxe format also saw a sales decline, down 5.1% to $642 million as units dropped 2.1% year-over-year.

But Zezsut affirms Goodles itself continues to see strong sales growth. She said it has maintained this momentum by continually capturing new audiences, including introducing its Vegan Is Believin’ variety and recent expansion with gluten-free Cheddy Mac, to flavor innovation such as Down the Hatch (Hatch Chili) and the debut of its dry pasta noodles. She believes a key to the brand’s success has been rooted in its ability to speak to consumers in a fun, approachable way, without positioning too deep on its nutritionals.

Additionally, she said the brand knows when to get creative and push category boundaries, and when playing within the norms will bring benefits. The Deluxe products will sit on shelf next to their Velveeta counterparts in a wide, horizontal-oriented box. This means they’ll also live on a different shelf than Goodles’ flagship line, giving it an opportunity to find those new consumers where they are most likely looking, Zezsut said: “The [wet and dry] consumers don’t really mix.”

“Speaking to this deluxe consumer [is different]; they love this creamy mac and cheese for a reason: it is unctuous, sensual, beautiful and all of those sorts of things,” said Zezsut. “So even that is an interesting complexity as well. It is almost a bit of a different campaign. We are launching a totally new line to people who may not have heard of Goodles… it’s getting out in front of a whole new market.”

Goodles isn’t the only player innovating against conventional incumbents, but rather it has now placed itself on a level playing field. Natural, better-for-you and plant-based deluxe-positioned products from brands such as Annie’s Homegrown, Daiya and Banza are already on-shelf. Comparatively, Goodles sits right around the same price point as these items, which range between $4.99 to $5.99.

She believes that the company may be able to entice some consumers away from conventional-positioned versions from the likes of Kraft and Velveeta, noting that the “dollar or so” price gap, paired with an elevated nutritional profile, may be compelling enough.

“It’s not like you need to cook it in a new way. It’s not like you need to look for it in a new place. It’s not going to be in some weird section. It is right there and all of those things are exactly the same, but we’re just switching up the ‘yum’ and switching up the nutrition,” Zezsut said. “We don’t want to mess with things like format and where you’re going to find us on the shelf; we want to be right up there, neck and neck.”

Even longtime players like Kraft have been pushed to look for whitespace as of late. The company introduced the first plant-based iteration of its flagship product via its joint venture with vegan A.I. platform NotCo earlier this year. That launch was followed by a February earnings call where Kraft execs reported that sales of its infamous blue box have been declining, partially due to the expiration of emergency SNAP benefits; CEO Carlos Abrams-Rivera noted at the time the brand would be reinvigorated by a slew of new innovation, including new flavors and gluten-free products.