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The Yogurt That Ate New York

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Chobani’s New Berlin plant, which houses up to 2.5 million cases of yogurt.  

To found Chobani, Ulukaya had taken on remarkably little debt. He purchased the old Kraft factory with a low-interest loan from the Small Business Association, and even as demand for his product grew, he kept his focus primarily on a relatively narrow market—New York, New En­gland. “I didn’t go crazy,” he said. “I didn’t jump into everywhere in the country. I just wanted to go in line with what we expected from sales and profits.”

As a result, a year after it launched, Chobani was already in the black. “There are two types of business models,” Ulukaya said. “People put together a whole team, and they start losing money until they make it. The other way is that as you’re making money, you add things to cover it. I chose the second one. And that asks for sacrifice. Not only you—everybody has to sacrifice.” Ulukaya even turned down offers from ­private-equity firms, which would have given Chobani the resources to expand more quickly. “I wanted to have the independence,” he said.

From 2009 to 2010, sales of Greek yogurt rose 203 percent in the U.S., while sales of traditional yogurt grew only 3 percent—this despite the fact that Greek yogurt, according to a report from Nielsen, had a 121 percent higher average price than its non-Greek cousins. (It seems entirely probable that Americans were drawn to Greek yogurt not in spite of but because of the higher price, which connotes quality and good taste.) By 2012, Greek yogurt accounted for 35 percent of all yogurt sales in the United States.

As the craze continued, competitors started cropping up, and smaller brands, such as the Seattle-based Greek Gods, grew increasingly popular; Fage is currently expanding one of its New York plants in the hopes of reaching output levels of 352 million pounds of yogurt a year. Yoplait and Danone, the largest yogurt-maker in the world, pose the greatest threats to Chobani. Both companies have debuted new Greek options in the past two years: Yoplait, which is owned by General Mills, with its blended and low-calorie options; and Danone, with its Oikos line.

Mintel, a research group, estimates that Oikos sales, bolstered by an expensive advertising campaign featuring John Stamos, increased 165 percent from May 2012 to May 2013, and the company now has 29 percent of the Greek-yogurt market. But Chobani, which effectively popularized strained yogurt in the States and benefits from being the most familiar brand, continues to hold on to its dominant share of the market at 39 percent.

When I asked Ulukaya if he ever sampled his competitor’s yogurt, he smiled. “When somebody makes a good-tasting, nutritious product, I say, ‘Good, I like that,’ ” he answered. “It gives me something to compare Chobani to—and it gives me the chance to think about how to improve. Unfortunately, the yogurt aisle hasn’t been that good.”

Not that Ulukaya is content to gamble on the gustatory instincts of consumers alone. In the past couple of years, for the first time, Chobani has invested in advertising, including a gauzy, orchestra-scored TV spot set in the verdant hills surrounding the New Berlin plant. It has expanded its offerings from the original wide-mouth cups to Champions Tubes (for kids) and squarish Flips, which allow consumers to blend yogurt with chia and hemp seeds, pistachios, and clover honey, among other ingredients. And Chobani recently won a bid to provide yogurt for school lunches in New York, Idaho, Arizona, and Tennessee as part of a yogurt pilot program being tested by the USDA.

Driving north from New York City, I saw the 200,000-square-foot Chobani plant from a great ways off—a bristling battery of stacks that leak steam over the adjoining farm fields of New Berlin. The factory employs over 1,200 people, many of whom work twelve-hour shifts three or four days a week.

In order to take a tour of the plant, one must wear black plastic steel-toe booties, earbuds, goggles, a snap-on plastic smock, a plastic hairnet, a neon-yellow vest, and—if you have even a smattering of facial hair—a plastic beard protector. All your parts—fingers, toes, stray hairs, hangnails—are sausaged into a prophylactic shield, lest they fall into any of the open vats or otherwise “contaminate the product,” as David Randall, a Chobani employee, told me on the day I visited. Randall is in his late forties, pale, blue-eyed, and unflaggingly earnest, a veteran of Frito-Lay and a couple of pharmaceutical companies. He’d joined Chobani only a few months earlier, but like everyone at the company, he spoke with glowing approval of the origin story. “Truly amazing,” he said several times.

I followed Randall out of reception and into the warehouse, which has the capacity to house 2.5 million cases of yogurt. On this day, it held a mere 1.8 million cases, or 20 million cups—something close, by my back-of-the-napkin calculation, to 4,050 tons of strained milk curd.


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