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Chobani Selected as SBA’s 2012 National Entrepreneurial Success of the Year
The story of Chobani is as simple as the idea for a better tasting and healthier yogurt, and yet so much more. Sitting in the yogurt section of nearly every grocery chain in the nation today is their flagship product, Chobani Greek Yogurt. Chobani is the brainchild of Hamdi Ulukaya, a Turkish immigrant who recognized the promise held in the yogurt market and risked everything in its pursuit. In 2005, Ulukaya was in the fourth year of running Euphrates Inc., his feta cheese manufacturing startup in Johnstown, N.Y., when he noticed a mailed advertisement for the sale of a Kraft Foods plant. Rebuilt in 1920 after a fire destroyed the original building, the New Berlin, N.Y. facility had aging yogurt production equipment and once employed 55. When Ulukaya toured the 80,000-square-foot building, he decided to buy the plant the very next day.
“When I started Euphrates, I always thought yogurt quality could be better. As an entrepreneur, in whatever you do, you need to be aware of your category-what’s good, what’s bad, where the potential is-and I saw that early on. I knew how to sell cheese to the food service industry but the retail yogurt world was a whole different ballgame,” explained Ulukaya.
With an SBA 504 loan through Empire State Certified Development Corporation and KeyBank, Ulukaya was able to purchase the plant in August 2005. Ulukaya hired five seasoned Kraft employees and spent the rest of the summer covering the outside of the facility with a fresh coat of white paint. Chobani started out making private label regular yogurts for other large companies but Ulukaya believed he could make a better yogurt than the competition: “We aimed at people who never liked yogurt. We couldn’t blame them because what was available was not what the rest of the world was eating.”
The recipe for Chobani is thicker and creamier than regular yogurt, with twice the protein and none of the preservatives and artificial flavors. What’s in the yogurt- five live and active cultures, including three probiotics- is as important as what’s not, and Chobani turned this competitive advantage into the yogurt’s slogan, “Nothing But Good.” Ulukaya described the philosophy behind the product: “We look at our yogurt as pure, healthy, simple and something that you enjoy tasting. That is very, very important for us.”
Existing Greek yogurt lines were most often sold in expensive specialty stores, so Ulukaya marketed his yogurt brand to a wider customer base through mass distribution channels of grocery store chains. After more than a year developing Chobani’s trademark taste, in October 2007 Chobani’s first shipment included five different flavors- blueberry, peach, strawberry, vanilla and plain- sold to a single Long Island grocery store.
The yogurt became a sensation, with customers spreading the word about Chobani to friends and family; customer demand led more and more Northeast grocery stores to place orders for the 6-ounce single-serving Chobani containers. Chobani has had to adapt quickly to the meteoric rise in demand, adding employees, equipment and square footage at breathtaking speed.
“We broke all the records along the way. We became the number one selling Greek yogurt, passing brands that had started six or seven years before us. We became the number one yogurt in the Northeast, and then we became the number one brand in the country,” said Ulukaya. “Even though we make a lot of it, every batch has attention from us, meeting certain criteria to make sure it’s good. We want to make good yogurt.”
With less than 50 employees when Chobani first hit the shelves, Chobani has grown to employ over 1,200 today, providing valuable employment opportunities in Chenango County. The plant is a hive of activity, with workers in white lab coats and safety glasses working busily while construction crews expand the facility in seemingly every direction. Chobani now has two full-time shifts, with multiple production lines running 20 hours before stopping for cleaning and maintenance for four hours.
Chobani has invested the bulk of their profits into increasing production capabilities, adding two milk delivery bays, new production lines for kid-size 3.5 ounce Chobani Champions and three flavor Chobani Club Packs, and most notably, constructing a brand new distribution facility across the street in only three months. The distribution warehouse is the largest of its kind in the Northeast, with capacity to store 2.4 million cases of Chobani yogurt in 150,000-square-foot refrigerated space and 14 tractor-trailer bays for faster distribution. According to Dairy Management Services, Chobani’s weekly order for 25 million gallons of milk from local farms provides an annual economic impact of $300 million for the New York State farming community. And Chobani’s impact is moving beyond New York State.
The company recently broke ground on a second U.S. production site in Twin Falls, I.D. The high-efficiency facility will span 900,000-square-feet, making it the largest yogurt plant in the country, and will allow Chobani to produce even more of its #1 selling yogurt as well as bring new innovations to market. Twin Falls production is slated to start later this year and will create 400 new jobs in the area.
Chobani also recently began importing its beloved Greek Yogurt to Australia and Canada after countless fan requests. The move marks the beginning of a global expansion initiative for the company, which will eventually bring Chobani into new markets across the globe. Five years after launching, the success of Chobani is inspirational, with 1.7 million cases of Chobani made weekly. And in spite of working seven days a week, Ulukaya and his team are enjoying the dynamic journey: “A lo