Chobani Founder Hamdi Ulukaya on the Journey from Abandoned Factory to Yogurt Powerhouse

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Chobani founder and CEO Hamdi Ulukaya has a tale that practically defines the American Dream.

Ulukaya, a Kurd, was born in eastern Turkey, where his family owned a small dairy farm. He eventually came to the U.S., and in 2005 came across an abandoned yogurt factory for sale in upstate New York. Ulukaya bought it and hired a small team and to make yogurt that was less sugary and less watery than what was generally produced in the U.S.

The product was called Chobani, and it was a hit. Today Chobani is a global player and has more than 20% of the U.S. yogurt market.

HBR editor in chief Adi Ignatius sat down with Ulukaya in this episode of our video series “The New World of Work” to talk about:

  • How Chobani has managed to stay true to its original values, even as it massively scaled up and competed in a sector where quality often has to compete with profitability.
  • What it takes to truly put a company’s people at the center of the corporate mission.
  • His and Chobani’s role in supporting refugees, through employment—and other—opportunities worldwide.

“The New World of Work” explores how top-tier executives see the future and how their companies are trying to set themselves up for success. Each week, Ignatius interviews a top leader on LinkedIn Live — previous interviews included Microsoft CEO Satya Nadella and former PepsiCo CEO Indra Nooyi. He also shares an inside look at these conversations —and solicits questions for future discussions — in a newsletter just for HBR subscribers. If you’re a subscriber, you can sign up here.

ADI IGNATIUS: Hamdi, welcome to the show.

HAMDI ULUKAYA: Thank you, Adi. Good to be with you.

ADI IGNATIUS: It’s great to see you. You’ve told this eight million times, but some of our viewers don’t know the story of the founding of Chobani. Could you give the short version?

HAMDI ULUKAYA: Sure. I had a small cheese factory in upstate New York. I’m from Turkey, the eastern part, in the Kurdish region. Arrived in 1994. Learned English and all that kind of stuff. I’ve settled in upstate New York. Worked in a farm and never thought I would be making what my family was making for generations. Nomads raising sheep and goats, making cheese and yogurt. So I end up making cheese in a small scale in upstate New York.

There, I saw an ad that says there’s a fully equipped yogurt plant for sale, came through as junk mail. And I went to visit the plant the next day, and turns out that this was a very old, almost 70, 80 years old factory, was being closed by Kraft, and they were getting out of the yogurt business and the price was extremely cheap. So through the SBA loan and some help from the local agencies, I bought the plant in 2005 with $700,000. Hired the first four people from the previous 55, and worked on the recipe. I thought, “I have one shot at this. I bet that people, if they had an option of yogurt being more natural, better and more nutritious, and accessible, most importantly, I could make something out of this.” I never knew how far this would go, but that’s 2007 when we launched it.

And then, the first signs of the product being received really well by people made me think that this is going to be really—you know, challenges that comes with making Chobani, are not necessarily selling, because people already have so much desire to buy. So I end up staying in that factory from 2007 to 2012.

In 2012, I built a factory here in Idaho. I am here now, 1.4 million square feet, huge factory. And I’ve always had the image in my head of how far Chobani can go, and what kind of challenges I’m going to face during this time. And try to prepare myself and the company for those challenges.

Of course, you always hear the headlines, but there’s always a lot of stories in the background when it comes to food making, especially natural food making, especially refrigerated, natural food making. And if you are competing with the large multinationals and if you are independent and if you don’t have a lot of resources, this gets a lot harder.

We tried to find a new way of building a sizeable, consumer good company, not following the footsteps of all the large food or the big food, but more an entrepreneurial, new way of finding ways, finding resources to compete, or grow, or develop the brand. So it’s been fun so far, but I have become gray as well, too. So it’s not been easy.

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ADI IGNATIUS: Hamdi and I were talking before we started the live broadcast, and you are the great American success story. I’m Armenian on my father’s side, you’re Kurdish. Basically our grandfathers came from the same–

HAMDI ULUKAYA: Same area.

ADI IGNATIUS: … a relatively small town in what’s western Turkey now. So it is an incredible story. So you create this thing, you realize it’s taking off, then you’re scaling like crazy. You didn’t have a background in business exactly. How did you cope with the challenges and opportunities of massive scale and what that does to your business, your culture?

HAMDI ULUKAYA: You touched the most important things, how do you scale and how do you keep the culture aligned to your beginning missions, beginning purposes? How do you attract talents? How do you get resources? Every single one of those are a challenge by itself.

I found in the food-making, especially in the large-scale food-making, there’s a lot of waste. And in the operational side of things, I saw a lot of waste.

The second part is it’s really eye-opening to see, if you’re not shopping in big cities, in a specialty store, but if you’re shopping in the large mass supermarkets, the quality of food-making, back then, it was really bad. Today, it’s getting better, because there’s a push. Quality food-making, one of the worst in the world. I don’t know all around the world, but at least in Europe, or where we grow up in Turkey, or in some part of South America, the food makers really did not spend a lot of time making good food for people. So that’s why they will have a lot of margins, because the cheap ingredients, cheap food. So it gets harder if you try to make it better food, with holistic ingredients, with natural ingredients, with nutrition dense food. If you try to make it, it gets a lot harder.

I think the biggest challenge I had throughout this whole thing was the stages that you go through in your company. So if you start, it’s a startup, it’s a different company. If you are a $100 million, $200 million company, it’s a different company. If you are trying to distribute all across the country, it’s a different company. If you built another plant and you have multi-locations, it’s a different company. And like you said, I’ve never done this before. I’ve never worked anywhere. I’ve never studied business. So for me, it was a personal journey of figuring out how I can make moves for the company to be aligned for the new realities.

And I come down to one reality. One reality is, it’s all about people. The changes that you make along the way, the people that you bring along the way, but the most important is how flexible you are as an organization, to go from one thing to another thing, from year to year, or sometimes six months. How do you change? How do you adopt a new reality? That has to be within part of the culture. So for that, I go back to the early days and say, “I have four factory workers and myself. None of us have done this before, other than four factory workers worked in that factory. I’ve never done retail. I don’t know if this is going to go anywhere. We don’t have a lot of resources.” But this finding a way, finding solutions, it was a big part of Chobani’s culture. So in a way, we do realize the issues and challenges and problems, but one of the best things to happen at Chobani, is we always welcome it and try to find a way to solve it, or even make it even better.

I think the biggest time I spent is on how I can grow and scale this business, but yet, how do I keep Chobani whole? How do I keep Chobani committed to the earlier promises, earlier commitments? And we had moments. We had some down moments and up moments. And I think that’s the responsibility of the leadership, is to make sure that the people side of it, cult

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