Thursday, March 31, 2011

Single-Handedly, It Revives Dairying Here : Chobani About To Be Biggest Yogurt Maker

Hamdi Ulukaya’s Business One Of Fastest-Growing Ever


Hamdi Ulukaya’s Chobani-making workforce has grown from six to 600 in five years.  Behind him is a $100 million expansion now rising in South Edmeston.

Hamdi Ulukaya is holding his breath.
Information Resources Inc.’s last report put Ulukaya’s Greek-style Chobani yogurt brand just 0.01 percent behind top-selling Dannon.
Any day now, he’s expecting the word: 
A mere six years after buying a shuttered cheese plant on Unadilla Creek at South Edmeston...
Six years, where his work force grew from six to 600...
Six years, where his demand for raw materials grew from zero to 3 million pounds of milk a day ... yes, 3 million ...
Six years, from when the first half-pallet, 1,000 individual cartons of yogurt, went out the door, to an anticipated 1 million cases this year.
No, he hadn’t received word by the time this newspaper went to press Tuesday, March 29, but any minute now he’s expecting he will:  Chobani is the largest-selling yogurt in the United States of America.
“This is one of the fastest-growing companies ever,” said Ulukaya matter-of-factly, sitting in his second-floor glassed-blocked office in Kraft’s former Phoenix plant.
Driving the four miles from Edmeston, you crest the hill and there it is in the valley – the original 700,000-square-foot plant with a $100 million expansion nearing completion – a bigger building than most anything around here.
You go through South Edmeston and cross Unadilla Creek, and everywhere there’s busy-ness.  Construction crews finishing the new structure.  Hundreds of parked cars and trucks surrounding the buildings.
Workers in hairnets come and go from the factory line.  In the cafeteria, every seat is filled at every table, and people are lining the wall.  A foreman briefs them on their next shift.
Mustafa Dogan, Chobani’s master yogurt-maker and quality overseer – he drives back and forth daily between here and parent company Agro Farma’s feta plant in Johnstown – tromps up the stairs:  “Where’s Hamdi?”
That’s a question everyone’s been asking over the past half hour, and then he steps lightly up the stairs, a slight man, curly-haired, bright-eyed, upper 30s, if anything a little low-key for someone who’s been riding a tornado.
“You have 600 happy people – I hope they are,” he said by way of explanation.  “But 600 TIRED people.”
How did this happen?  And he tells the story.
Hamdi Ulukaya was raised in Ilic in the Province of Erzincan in eastern Turkey, “very much like here.  Families are close.  Everyone knows everyone.”
For generations, centuries, his family operated Safak, a regional dairy.  There were 20,000 sheep in the company’s herd when he was growing up.
He had six brothers.  He rode horses, played a lot of soccer and got pretty good at it.  Graduating from high school, he got an offer to go pro and raised the question with his mother, Emine.
She didn’t say no.  Instead, she asked a question:  “Is that what you’re going to do all your life – chase balls?”
So he went to university, studying political science, then decided to learn English in the U.S.  He started out in New York City, but soon moved Upstate, from Adelphi to Bard to SUNY Albany, drawn by the proximity to a country life similar to his boyhood one.
In the mid ‘90s, his father, Mehmet, paid a fateful visit.  “He was blown away,” said the son, “especially with the countryside.  So beautiful.  So like where we grew up.”
He loved the States, loved the hospitality of the people he met, but observed, “the cheese could be better.”
His son hadn’t decided on a vocation yet, so he took his father’s advice and began importing Greek cheeses into New York City.  He kept his eye open for opportunity, developed a business plan for Agro Farma, and was enticed by the Montgomery County IDA to build the Johnstown feta plant.  (“My business school,” Ulukaya calls it.)
In 2005, a flyer – “junk mail” – came across his desk, advertising the availability of the Phoenix plant, where 55 workers had just been laid off.  Hamdi visited:  “It was old, no value to anyone.  I just had a gut feeling I could make it work.  As an entrepreneur, you always have to listen to that inner voice.”
He found a place to live in Cooperstown – on Pioneer Street, between Chuck and Ursula Hage’s and John Ramsay’s – which was convenient to both plants, and found himself one morning in South Edmeston with his first six employees. 
“What are we going to do now?” they asked.
“Well, we’re going to start painting the walls,” said the new boss, and they did.  (The six original employees are still with him.)
At first, the plant turned out private-label products for others.  But in August 2007, the first half-pallet of Chobani yogurt went down to New York City.  A week later, all the customers reordered.  Then they increased their orders.
In 2008, the plant was shipping 20,000-30,000 cases a week.  In 2009, it was up to 100,000.  In 2010, 300,000-400,00 cases a week.  This year began at 500,000 cases a week, which Ulukaya expects to rise to the million mark by year’s end.
“I think people were ready for something better and something healthier – not just yogurt, all food,” he mused, and Chobani – strawberry, blueberry, peach, vanilla and plain at first – was just that:  simple, healthy.
The thicker, creamier Greek yogurt was available in specialty stores in cities.  For the first time, though, Chobani made it accessible to the mass market.
From the outset, Hamdi was accessible to the customers, too.  He answered the phone when they called.  When the volume got too great, others answered the phone, but forwarded ones they thought the boss needed to hear.
Soon, the phone crew was consistently hearing, “I never liked yogurt, but this made my day.”  And, “I love Chobani and I’m going to tell all my friends and families about this.”  
A new marketing tool was emerging:  The Internet.  “It went viral,” Hamdi said.
Ulukaya has since moved to Norwich, where the company is headquartered.  He’s negotiating for P&G’s former Eaton Pharmaceuticals plant there.  He’s expecting to announce construction of a second plant soon, although probably not in Upstate New York:  There’s simply not enough milk.
“We’ve become the biggest milk processing plant east of the Mississippi,” he explained.  And the product is available in all 50 states.
As you might suspect, Hamdi Ulukaya’s company couldn’t have grown this fast if he were a micro-manager:  “Let people be free,” he said.  “Don’t put borders around people’s jobs.”
And people have responded.  A woman who answered phones at the Kraft plant for years is now head of purchasing.  Another does all the day-to-day scheduling.  A temp is now a shift manager.
“I’m a perfectionist,” the boss said.  “But I see people before I see anything else.  Be an example,” he advised, “before you put rules and regulations in place.”
The defining factor of his life for the past decade has been work, but he recently bought a country home and some land – “I always wanted to have my own farm” – and hopes to raise horses.
He’s taking up sailing, and gets away to Newport, R.I., whenever he can.  He’s still a bachelor, but a niece, Dilek, has joined him, and heads the company’s Shepherd’s Gift Foundation.
“This kind of story can never happen anywhere else,” he said near the end of an hour-long interview.  “It’s still an entrepreneurial haven,” he said of the U.S.  “They welcome the new ones.”
He weds that New World attitude with Old World perspective:  “Alexander said, give me 10 people and I’ll conquer the world.”  Hamdi Ulukaya did it with six.

Daniel J Fahs, Harpursville, tends the machine that fills the containers with yogurt.

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