Hamdi Ulykaya spent his childhood on his family farm raising sheep and goats and turning milk into cheese and strained yoghurt. He left the family farm to study Political Science at Ankara University. His interest in pursuing business courses inspired his move to the States.
Following his studies, Ulykaya took up a job at a farm close to New York, an industry he was well-versed in. His father visited him from Turkey and tasted the cheese manufactured at the farm, and he was disappointed. He urged Ulykaya to import his family cheese from Turkey. This suggestion began the journey of Chobani yoghurt, a billion-dollar business.
Chobani, founded by Ulykaya in 2005, is a food company based in the United States specialising in strained yoghurt. Chobani is credited with making thick, Greek-style yoghurt with a higher protein content than traditional yoghurt, popular in the States. The yoghurt market is rife with choices, but Chobani yoghurt is trendy.
Curd versus Yoghurt
A prevalent misconception in India is that Curd and yoghurt are two names for the same dairy product. However, that is not true, and the difference lies in
1. preparation methods: Curdling milk with naturally acidic substances such as lemon juice yields curd. On the other hand, Yoghurt is fermented with artificial acids and has more bacteria than curd.
2. Secondly, yoghurt is low on lactose as compared to curd. Hence, yoghurt is a boon for and enjoyed by lactose-intolerant people.
Chobani’s journey started at home in NY
Ulukaya started making strained yoghurt at his home in Upstate New York after being dissatisfied with the yoghurt options available in the United States. He hired a Turkish yoghurt master with whom he developed his recipe. They tested hundreds of recipes using different bacterial cultures at different temperatures and fermentation times to create yoghurt with the desired taste, texture, and natural shelf life. Because the whey is removed, strained yoghurt is thicker, creamier, and tangier, with higher protein content.
Chobani’s expansion
In 2005 Kraft Foods announced the closure of one of its yoghurt plants in Upstate New York. Ulukaya got a direct mail advertisement that said, “Fully equipped yoghurt factory for sale.” He quickly recognised this as a huge opportunity to grow his company. He promptly applied for and received a loan from the Small Business Administration of the United States Government to
purchase the yoghurt plant. He hired several laid-off Kraft employees, preventing an economic downturn in the small community, and started fine-tuning their recipe.
Perfecting packaging took time and a significant chunk of his budget. Until then, yoghurt was sold in narrow-mouthed containers in the US, and he wanted to sell his unique yoghurt in a wide-mouthed container so that people could know something different was being sold. And then, Chobani Greek Yogurt hit the shelves in 2007 and quickly became a regular item on everyone’s shopping lists. He surprised over 2,000 full-time employees in 2016 by distributing shares worth up to 10% of the company’s value when it went public or was sold.
He made some decisions that made Chobani grow financially, like
Product positioning: he ensured his product was directly sold in mainstream grocery stores instead of speciality stores and that it should be placed in the dairy aisle along with the regular yoghurt section.
Slotting Fees: They negotiated with the retailers regarding the slotting fees. Slotting fees are the money retailers pay to have your product featured on their store shelves.
Right Selling Price: They worked hard to decide the right selling price for one cup of yoghurt to fund future growth.
With these conscious decisions, Chobani became a 750-million-dollar company.
What made Chobani click with the market?
Each container is made with live probiotics that are very good for gut health.
They offered no-sugar plain yoghurts.
Strained yoghurt that was high in protein earned respected dieticians’ approval.
No artificial sweeteners in their products; they are naturally obtained from fresh juice.
Variety in flavours for kids
Market and Funding
Within 8 years of starting the company, they had gained 52% of the market share by 2014. They expanded their market coverage to Australia in 2011 and Canada in 2012. Australia was a very profitable investment that is still growing today. Still, Canada could not sustain a long-term and sufficient supply of high-quality milk, so they were forced to close the establishment by 2013, when their temporary import licence expired. By constructing the largest yoghurt plant in the United States in 2012, they directly created over 400 local jobs in Twin Falls, Idaho, and supported regional farmers.
Other products from chobani
Apart from greek yoghurt, they offer oat milk, dairy and plant-based creamers, ready-to-drink coffee and plant-based probiotic drinks. They have cafes too.
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