Cooking Costco Paneer: Best Ways to Use Store-Bought Paneer in Indian Recipes

When you buy Costco paneer, a firm, fresh Indian cheese made from milk and acid, often sold in large blocks for home cooks. Also known as Indian cottage cheese, it’s a go-to ingredient for curries, kebabs, and snacks—but it behaves differently than homemade paneer. Most store-bought paneer, including Costco’s, is packed in water to stay fresh, which can make it soggy if you throw it straight into a hot pan. The key isn’t the brand—it’s how you prepare it.

Before cooking, always press your paneer for 15–20 minutes between paper towels or a clean kitchen towel. This squeezes out excess water so it holds its shape when fried or grilled. Skip this step, and your paneer turns rubbery or falls apart in your butter chicken. For grilling or frying, pat it dry, cube it, then lightly coat it in cornstarch or a pinch of turmeric. That thin layer creates a golden crust without soaking up oil. You can also marinate it in yogurt, garlic, and cumin for 30 minutes—this adds flavor deep into the cubes, not just on the surface.

Costco paneer works great in dishes that need texture, like paneer tikka, palak paneer, or even as a topping for biryani. It doesn’t melt like cheddar or mozzarella, which is why it’s perfect for Indian cooking—your cheese stays in chunks, not puddles. If you’re swapping it for homemade paneer, know this: store-bought is usually less tangy and a bit denser. That’s fine. Just don’t overcook it. A quick fry or 10 minutes in the oven is enough. Too long, and it turns dry and chewy.

Some people think paneer from the grocery store is inferior. It’s not. It’s just different. Many professional Indian kitchens use store-bought paneer because it’s consistent, affordable, and saves time. The real secret isn’t where it comes from—it’s how you treat it. Press it. Dry it. Season it. Cook it fast. That’s all.

Below, you’ll find real recipes and fixes from home cooks who’ve used Costco paneer in everything from weeknight curries to party snacks. Whether you’re wondering how to stop it from falling apart, what spices pair best, or if you can freeze it (yes, you can), the answers are here. No fluff. Just what works.