The Greek Yogurt Chobani Success Story
America's No.3 top selling yogurt brand is Chobani and this is its story.
In 2005, Kraft Foods was selling one of his yogurt companies in Johnstown, NY. Not far away, but far enough, sat a Turkish native, Hamdi Ulukaya, 40-ish. He was just sitting in his office when he saw the ad in the newspaper for the shutdown yogurt plant. A light went on (as in, I've got an idea) that made Hamdi think of creating a new type of yogurt. As he sat there, he thought, "I can do this", yet, he was clueless as to how. He told his friends. They thought he was nuts, and out of his league. Within two days, he decided he was buying the plant. The next five months were all about getting loans to buy it, which came to around a million dollars. Even he thought this might put him in debt for the rest of his life. Was he scared of failure? Totally. He knew nothing about making yogurt!
Once the purchase had gone through, he had an empty plant. He hired five people and painted the walls then turned off the electricity to reduce the bill. Still, clueless about making yogurt, he began researching it and finally consulted a family friend who made it in Turkey. He was a master yogurt maker there and he became the sixth employee. Together, they created a recipe. He named his new company of six people Agro Farma Inc. It was not long before the name changed to Chobani,which means "shepard" in both Greek and Turkish. The recipe from Turkey removes excess liquid creating a thicker and creamy texture. The difference is significant when one is used to eating Yoplait or Dannon. Chobani tends to be higher calories and in other content and a bit more costly. Generally, it takes three pounds of milk to create a pound of this yogurt.
Coming up with a recipe was not a quick thing, it took 18 months, during which time, little product was produced (it was mostly hybrids). As batches were made, they were sold wherever they could and free samples were provided. Their marketing was done with their Chobani truck that went all over the area, such as, fairs, parades, main street, parks. People told others about this yogurt. By now, it was 2007, when the marketing started to use Facebook and Twitter. As business increased, they were selling 200 cases a week. With more money, they started to advertise more mainstream and in 2010, had their first TV ads. The small yogurt start-up was now shipping 1.5 million cases a week! The product continues to grow fast and a new plant costing $300 million is being built in Idaho.
Chobani retail sales per year is $745 million. When Hamadi now looks back, it still is in disbelief. In 2005, he new nothing about making yogurt or manufacturing it, he sacrificed whatever family life he had, he lived in the plant until 2007, he was willing to be in debt. The only thing he was running on was passion at any cost.
That is how any start-up business begins.