Translating Chobani’s Success

How the young company became the No. 1 yogurt brand

NEW BERLIN, N.Y. -- When it was founded six years ago, Chobani was not the only Greek-style yogurt company trying to make inroads in the U.S. But the consumer-driven decisions made by founder and CEO Hamdi Ulukaya propelled the company past not only its competitors in the Greek-style niche, but also traditional American brands. Today, Chobani controls 20% of the $6.5 billion U.S. yogurt market, according to a recent report from Financial Times, selling $1 billion in yogurt last year.

Chobani employees more than 2,000 people and runs the two biggest yogurt plans in the world, according to the paper: an old Kraft yogurt factory in upstate New York and a new $450-million plant in Idaho. It recently bought a factory in Australia, where it’s the No. 3 yogurt brand, and plans are afoot to expand dramatically in the U.K. this year, reports Financial Times.

Ulukaya was making and importing cheeses when he heard about the Kraft plant up for sale. He bought the factory with a $1-million grant from the Small Business Administration and brought over a yogurt master from Turkey to experiment with a recipe of their own.

Ignoring the trend at the time toward highly sweetened yogurts, Ulukaya focused on the number of people telling him they wished for the thicker, more tart style of yogurt they experienced when traveling abroad, as well as the overall trend toward healthier eating.

Meanwhile, another yogurt company, Greece-based Fage, was also trying to make inroads in the U.S. market. Ulukaya attributes his company’s broader success to its personality as a risk-taker. Both companies focused on yogurt made without preservatives or artificial colors and with milk from cows not treated with artificial growth hormones. They also both introduced American yogurt consumers to the wide-mouthed tub packaging.

But Chobani differentiated itself by focusing not on the high-income shopper at specialty stores like Fage did. Instead, Ulukaya got his product into the regular dairy section of supermarkets. “We believed this was a simple, pure product and it should be available for everybody,” he told the paper.

The company launched in 2007 with 300 cases. When he reached 100,000 cases a week, Ulukaya took a risk and quadrupled production. “Those are early decisions, and these are bold decisions. If you’re wrong, it will kill you and drain you,” he told the Financial Times. “But being independent and so connected to your consumers . . . we could make those early decisions.

“We always trusted in our instincts and the messages that were coming directly from the consumers,” he continued. “We’ve never done studies. We’ve never done market research.

“That’s what I believe in as an entrepreneur. You need to see not the small tree over the ground, but you have to see the seed underneath. We have to see things before anybody else has seen it yet.”

Click here to read the complete profile of Chobani and Ulukaya.