Chobani Yogurt's Success Starts Where a Giant Left Off

BY Diana Ransom

Hamdi Ulukaya, the founder of Chobani, won the SBA's 2012 Entrepreneurial Success award.

For Chobani Inc. May might as well be national yogurt month.

Not only did the Greek-yogurt maker announce its first-time sponsorship of Team USA athletes during the London 2012 Olympics, it learned that Chobani is rated as the top yogurt brand in the U.S., according to Harris Interactive's 2012 Harris Poll EquiTrend study. Then, this week, the Small Business Administration named the company as its 2012 Entrepreneurial Success award winner.

Here's why the accolades have been flowing in. After launching in 2007 out of a shuttered Kraft plant, the company -- which started with five employees let go from Kraft -- now has more than 1,200 employees. Chobani, based in New Berlin, N.Y., also has roughly $1 billion in annual sales and ships 1.5 to 1.7 million cases of Chobani to grocery stores across the U.S. each week.

Named for the Greek word for shepherd, Chobani founder Hamdi Ulukaya sat down with Entrepreneur.com to talk about the company's modest beginnings and growing pains as it breaks ground at a new, nearly 1 million-square-foot manufacturing plant in Twin Falls, Idaho. Here is an edited version of that discussion:

Entrepreneur: What has been the key to Chobani's success?
 

Ulukaya: Just about anyone can make a good product, but it’s the people that count. In the end, it's the employees who will take it from a kitchen-table idea to the next level. There are a lot of important things in business, but the people portion comes first.

Entrepreneur: What is your biggest challenge these days?
 

Ulukaya: You can find Chobani in every major supermarket, in club stores, convenience stores and airports. But we're not everywhere yet. We have been struggling with keeping up with demand. That's why we're building a new plant and hiring more workers. But, it takes time to build a factory to fulfill that demand. We had some difficulties. But, when we open the plant in Idaho, we'll be in better shape, with more products and more flavors.

Entrepreneur: You're hiring while giant companies lay people off. Why?
 

Ulukaya: I can only speak from what happened to us here. I look at this plant in New Berlin. It formerly operated in almost the same industry and it was closed. What was wrong before?

For me, it proves the need for small businesses. Every small business will give you an entrepreneurial way of looking at things. I guarantee you that for every plant that closes, if you gave it to one small-business person in that community, he or she would find a way to make it work. The small-business attitude is you always find a way to make it work.

Entrepreneur: With the added capacity from the new plant, will you move beyond yogurt?
 

Ulukaya: We never called ourselves a yogurt brand, but, right now, yogurt is still our focus. We are innovating, however. This year, we launched Chobani Champions, a line of yogurt that is packed and sized to appeal to kids. And we're also really excited about Chobani Kitchen, a site that highlights recipes made with yogurt. The notion that yogurt can enliven everything from soups to desserts hasn't reached people at large yet. Right now, 99 percent of the time Chobani is consumed in a six-ounce cup, and it's mostly breakfast.

Entrepreneur: What has winning this award meant to Chobani?
 

Ulukaya: I love it. We've been given a lot of awards and every one of them was special, but I'm particularly proud of this one. We couldn't buy the plant without a SBA loan. If they didn't support us then, there wouldn't be a Chobani story here today. There wouldn’t be 1,200 people working. I hope this is an example for my small-business colleagues: That a small startup can challenge the big guys, and one day they can find themselves in every supermarket.

Entrepreneur: Advice for aspiring entrepreneurs?
Ulukaya: Go for it, if you believe it.

SOURCE: www.entrepreneur.com