By Alissa Figueroa
Rock Center
One day in 2005 Hamdi Ulukaya, owner of a small feta cheese company in upstate New York, took a tour that would change his life. As he walked through the 100-year-old yogurt factory, a handful of employees were busying themselves with the work of shutting the factory down.
“On the way back, I called my attorney and I said, ‘I just saw a plant and I think I want to buy it,’” explains Ulukaya, a 40-year-old immigrant who grew up on a dairy farm in eastern Turkey. “He said, "You’re really, really crazy. That's not going to happen.’"
But Ulukaya saw something in the defunct factory that no one else did: an opportunity to bring the yogurt of his youth to the masses. So using loans of less than $1 million, some backed by the Small Business Administration, he bought the plant.
Ulukaya spent the next two years developing the recipe for Chobani yogurt.
“That place became my home,” Ulukaya told Rock Center's Harry Smith in an interview airing Thursday, Dec. 13 at 10pm/9CT on Rock Center with Brian Williams. “It was lonely days, difficult days, a lot of question marks, a lot of pressure to see if I would make it to the next day.”
No longer does Ulukaya have to worry if his company will make its next payroll.
Since launching in 2007, Chobani has grown into a $1 billion business, according to Ulukaya, with no signs of slowing down. He also did something arguably more impressive: he changed what Americans eat.
Before Chobani came along, Greek yogurt sales in America were nearly nonexistent. Now, more than a third of the yogurt we eat is Greek, and Chobani is the biggest seller.
Ulukaya's personal wealth is now valued at $1.1 billion by the Bloomberg Billionaire's Index.
Impact on the local community
The good fortune, though, is not only his. Chobani's rise has been a lifeline for one of the most economically depressed parts of the country: rural upstate New York. This area was struggling long before the recession hit, with tens of thousands of manufacturing jobs disappearing in the last few decades.
“I expected the plant to sit there vacant [after Kraft left]. I had these visions of it becoming dilapidated and falling apart,” says Maria Wilcox, one of the four remaining Kraft workers that Ulukaya hired from New Berlin, the tiny town where the plant is located.
Growing from those first few workers, Chobani now employs more than 1,300 people in upstate New York and has made $193 million in capital investments on the old factory.
“Other companies came and looked at the plant and the surrounding area and left. [Ulukaya] always had a vision for the plant here that included the community,” says New Berlin Mayor Terry Potter. “He’s brought a sense of rejuvenation to the community.”
Along with good-paying jobs, Chobani built New Berlin its first little league field, free of charge.
Chobani also trucks 4 million pounds of milk daily to its New Berlin factory from the area's 5,300 dairy farms. New York produced some 530 million pounds of yogurt in 2011 -- more than twice 2008 levels – and a direct result of Greek yogurt production.
A new kind of CEO
Ulukaya has been able to accomplish all of this so quickly by bypassing many of the traditional models for business success, especially in the food industry. Instead of focus groups, consultants and big marketing campaigns, Ulukaya has focused on perfecting his product based on response from consumers. Ulukaya still has messages from customers (every single one) forwarded to his cell phone daily.
The company has been particularly good at harnessing the power of positive feedback online.
“The communication is so fast; you don't need huge money for the marketing or your voice to be heard,” says Ulukaya. “It's a flat world.”
In fact, Chobani has only launched two television ad campaigns, the most recent during the 2012 London Olympics, for which they were an official sponsor. Ulukaya had to pull the ads because the factory couldn’t keep up with the increased demand.
Chobani runs on the idea that consumers’ voices will shape the market; with the internet, word of mouth is a more valuable marketing tool than ads, says Ulukaya. This helps new guys on the scene make a big impact quickly. And, he adds, it’s their responsibility to challenge the status quo.
“It's a shame what's in the supermarkets today,” says Ulukaya. “It doesn't have to have all these preservatives. It doesn't have to have all these bad colors and stuff like that. . . It's the manufacturer's responsibility. They can make it better. They can make it nutritious, and they can make it accessible. That's what we did in Chobani.”
So what’s next for the company?
Chobani just opened its first retail store, a boutique yogurt bar in SoHo, this summer. Now customers can sit down to enjoy a “yogurt creation," with gourmet fresh toppings and, of course, Chobani.
Ulukaya is coy about what’s on the horizon for Chobani as far as new products, but he’s clear about one thing: this is only the beginning.
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I love immigrant success stories like this, and I love that Ulukaya was also able to revive a depressed area as part of it. I don't think he would have been able to build a business like this in any other country in the world.
Um, as a regular customer, I can't help but say that Chobani also got lucky, which this article fails to mention. I take away none of their business decisions, but they also came around at a time when people wanted to eat healthier and there was a big shift in looking for live active cultures in yogurt, which nobody cared about before that.
I would imagine they would have done well, anyway. But that they overtook the market from companies like Dannon is part of a bigger trend.
There's no such thing as lucky. He either saw the trend and focused on it, or he helped create it. People who believe in luck usually wallow in bad luck.
Luck to me is the intersection of opportunity and preparedness. He was prepared to act when the opportunity arose. He created his own luck !!!
What he calls "Greek" yogurt for the US market is actually Turkish. Chobani is a Turkish word. Yogurt is a Turkish word. He himself is from Eastern Turkey. But if he called it Turkish, nobody would buy it. LOL.
Greek is also my favorite kefir style (of Lifeway brand dairy products).
Are you sure Kefir is Greek?
Yogurt is invented by Turks introduced to Greece by Turks. Since Greeks came to US before Turkish immigrants, it is known as Greek Yogurt. Kefir comes from Russia, and used by Turks too for a long time and it is VERY healthy. If you can drink the plain kind, it's better. I am upset that not many Dr.s recommending Kefir to patients even though it is proven (I am one of the examples) to treat many GI problems. Especially for children instead of soda, make sure they drink Kefir...
My favorite yogurt and just another reason so. :)
I am addicted to and LOVE that pineapple 2%! Plus greek yogurt is high in protein, and I don't feel hungry an hour after I eat it. I am so happy to hear of this gentleman's success and that of the area too!
I love Chobani products; about a year ago, I started using plain greek yogurt as a healthier alternative to sour cream. The plain unflavored chobani is in all my recipies now, and I love it. It has a great consistency & richer taste than sour cream, too.
They just need to get a celebraty-athlete endorser like james neal or Victoria
azeranka and then they’ll be completely on the map and more recognizable to
most consumers which is important as they are still a relatively young company.
I think you missed the point. The very reason they are doing well financially is that they DONT have to pay some celebrity endorser $50 million a year!
In addition, they advertised during the Olympics and then couldn't keep up with the resulting demand! They are on the map, all right!
This is about the only good thing NY has going for it. Talk about inspiring!
Huh? We have a lot of great things going on, for example in the tech industry as well. We are in the process of building a second little Silicon Valley around some of our top universities. Perhaps you are not in touch with the current developments, since you are gone4now. Also, we are extremely resilient, as NY bounces back from the second major disaster in just over 11 years. We are always changing and reinventing ourselves!
He didn't build that!
I guess you missed the part about the SBA loan. Also, how does he ship his product? I would guess on roads built with public monies. Not taking any thing away from this guy's business acumen and hard work, but no one builds a business in isolation.
SBA loans..The roads...That's reaching! At least this is a GOOD investment! Obama likes to invest when most companies are going down.
I don't like it. It tastes expired.
I understand, it is different than the usual yogurt. But if you get used to it, it has more calcium and much more benefits than the normal kind. Turks add crushed garlic in the plain kind and eat it with many things, which might sound weird but it is delicious too:)
Maybe it was?
I have eaten yogurt all of my life and to be truthful, I love Chobani! Now that I read this story, I love it even more! Kudos to you my friend, I hope you live long and enjoy every bit of the wealth you accumulated.
Chobani yoghurt is mediocre at best. I never recommend it to my friends. It does not have the proper consistencey and texture of true Greek yoghurt. The best style Greek yoghurt is FAGE, both in quality & texture of the product- it is most authentic to the "old world" style of yoghurt making.
Agree. Fage is the bomb. Also, I don't need anyone deciding what needs to be added for me, I always buy plain. Full fat, of course.
You're right. Chobani is too watery. Real Greek yogurt is creamy and thick and Fage is authentic, even owned by Greeks. Chobani is my 2nd alternative if Fage is not available at the store. Dannon and Cabot's "Greek" yogurt is anything but, they shouldn't even be allowed to call it "Greek", it is a true insult!!!
I agree re: Dannon and Cabot! But I would not agree that Chobani is watery...
I find it very thick and creamy. Fage is slightly different; I agree. Not sure exactly why there is a difference, but I love them both and find them thick and creamy. You have to stir Chobani a little more at first, then it gets more like Fage. Both EXCELLENT!
This is one of those stories where a little guy with a lot of faith and guts takes on the giants of an industry and wins. Great story and lots of future success.
HEY FOLKS !!!!
All you have to do is take PLAIN yogurt (no geletin or pectin added) and put it into 4 layers of cheesecloth - hang it up over a bowl for the night.
Next day add whatever you want - fruit, jam, spices (for savory!!) or leave plain.
Maybe it's an acquired taste because I don't like the stuff. I've tried other so-called Greek yogurts and didn't like them either. I am guilty of having a sweet tooth, so maybe that's why I don't like Greek yogurt of any kind. I find Chobani and the others taste too tart, almost as if it's turned or expired. I've tried it enough times to know that it's just a taste and texture that I can't wrap my tongue around!
Kudo's to this businessman for his success!!
I also love Chobani. We've tried Fage and the others, but keep going back to Chobani. Better flavor and texture. I eat one each morning for breakfast, and my husband eats at least 2 a day. I always get comments from the cashiers at the market when I buy a bunch at a time, and always recommend it to them.
This is a wonderful story, I hope he doesn't have to move the factory and leave all of these people unemployed if they start FRACKING in New Berlin. The cows health would be questionable if this area gets FRACKED. FRACKING KILLS EVERYTHING!
The Passion Fruit flavor is the best, but for some reason they stopped carrying it at my favorite grocery store so I need to find it somewhere else. I have never found Chobani to taste "tart" or "turned", maybe they didn't check the expiration date?
No, I think it's just that people don't realize that yogurt is milk that has been soured and thickened through the action of a bacterial culture that eats lactose (milk sugar) and produces lactic acid. It's a form of fermentation. The acid sours the milk and curdles it. the amount of sourness depends on the various factors like the length of fermentation and the temperature. People who say that it tastes like it has gone bad or is not sweet enough are just used to industrial yogurt crap that has tons of sweeteners and no live cultures.
Passion Fruit is my favorite too. I work in the foodservice industry and know an employee of Chobani that said they had to temporarily stop production on a couple of flavors to enable them to fill demand on some of the more popular flavors... I'm beginning to see the Passion Fruit where I shop again... whew :)
Who?
I like this stuf and even cook with it!
My biggest fear is that he will retire and find one one to run his company and will sell to some big food conglomerate that will start adding binders, thickeners, then make the packaging smaller and charge more for for it.
enjoy the yogurt just don't read the Nutritional info. not exactly healthfood
Nothing against the Greeks, but Greek Yogurt tastes awful. It's typically bitter, it has a texture that clogs the mouth, and it adds an aroma to most mixtures that makes the nose twitch. My only hope is that this trend continues so the prices on better tasting yogurt drops.
Yes, PLEASE never sell your company to Kraft, Pepsico, Phillip Morris or any of the other big food groups! Love your yogurt!!!!
New York dairy farmers are glad Chobani came along. The only problem is that federal marketing order rules result in us, the farmer, getting the LOWEST pay price in the entire northeast. So, New York farmers provide the cheapest milk for Big Yogurt to base their business model on. NY has lost thousands of its dairy farms in the past decade, dropping from some 7,400 farms to 5,400 farms. Millions of acres of farms now stand abandoned as the rest of the farms work in rat race conditions to supply milk at rock bottom prices to stay in existence. Drive around rural NY and see the shambles of rural farming communities. Governor Cuomo's Yogurt Summit failed to mention that the farmers themselves are very discouraged from this low pay price scenario. We provide great milk, close to urban centers, yet, farmers in neighboring states are paid far more. NY = Cheap Milk. How about fair trade milk prices for rural NY.
Maybe Chobani and Fage's success can help move the dial on those prices. As they succeed, the milk becomes more critical. Although, regulated, the law of supply and demand will still be in play and perhaps have a positive influence in your favor.
It's definitely an acquired taste. I hated it at first too. Get the plain. Top it with some fresh ripe strawberries and some granola full of nuts. It's great that way. Try it a little bit at a time. Soon you'll crave it. The reason to bother - it's sooo good for you.