Chobani: Hamdi Ulukaya (2022)

Summary

How I Built This with Guy Raz: Chobani – Hamdi Ulukaya

Released on July 14, 2025

In this compelling episode of How I Built This with Guy Raz, Hamdi Ulukaya, the founder and CEO of Chobani, shares his remarkable journey from a nomadic shepherd in rural Turkey to building one of America's most iconic yogurt brands. The conversation delves deep into Ulukaya's resilience, innovation, and commitment to community, offering invaluable insights into entrepreneurship and leadership.

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Early Life and Journey to America

Hamdi Ulukaya was born in a remote Kurdish village in eastern Turkey, where he grew up amidst shepherds and farmers. This upbringing instilled in him a profound knowledge of cheese and yogurt-making, as well as traits like resourcefulness and determination—qualities that would later prove essential in his entrepreneurial journey.

Isolation and Traditions

"We were kind of people like from Mars, really. We would come to town and buy our flowers and sugars and whatever it is... Then the second we are done, we are on our horses and mules and we are up in the mountains."
—Hamdi Ulukaya [06:29]

Despite living a semi-nomadic lifestyle, Ulukaya recalls his childhood as one of relative comfort and community, enriched by the traditions of his family and tribe.

Emigration to the United States

Driven by political activism and a desire for a better life, Ulukaya decided to leave Turkey in the mid-1990s. Initially planning to study in Europe, a chance conversation redirected his path to the United States.

The Crucial Decision

"This is my last goodbye to life of tribe, my last goodbye to my town... And within two weeks, I was in New Jersey."
—Hamdi Ulukaya [11:54]

Arriving with limited funds and minimal English proficiency, Ulukaya faced immense challenges. He juggled multiple responsibilities—working on a farm, attending English classes at Baruch College, and coping with personal loss after his mother's passing.

Founding Euphrates and Entering the Cheese Business

In 2002, Ulukaya and his brother Bilal founded Euphrates, a cheese-making business, leveraging their deep-rooted knowledge of cheese production from Turkey. However, the initial years were fraught with difficulties, from securing loans to perfecting their cheese in an unfamiliar environment.

Struggles and Perseverance

"Those first two years were the most difficult times of my life... I remember going to the creek and crying by myself."
—Hamdi Ulukaya [37:03]

Despite skepticism from bankers and the complexities of operating an old Kraft-owned factory, Ulukaya's unwavering determination kept the business afloat.

The Pivotal Decision to Enter the Yogurt Market

In 2004, an unexpected piece of junk mail advertised a fully equipped yogurt factory for sale at an astonishingly low price of $700,000. Recognizing the potential, Ulukaya took a bold leap, purchasing the facility and pivoting from cheese to yogurt production.

Embracing Opportunity

"I said, why don't you ask your brothers to send you feta cheese, then you can sell it here. That was the big idea."
—Hamdi Ulukaya [23:21]

This strategic shift laid the foundation for what would become Chobani, redefining the American yogurt landscape.

Launching Chobani and Early Growth

By 2007, Chobani had secured its first retail spot in a kosher grocery store in Great Neck, New York. The real breakthrough came when they entered ShopRite, a major grocery chain, albeit with significant initial costs and risks.

First Major Breakthrough

"I was okay to lose money for probably two months... and then I felt like I could breathe."
—Hamdi Ulukaya [38:13]

The gamble paid off when orders soared, leading Ulukaya to aggressively scale operations, often sacrificing personal well-being to meet demand.

Scaling Up and Overcoming Challenges

Chobani's rapid growth brought both opportunities and obstacles. Expanding production required substantial investments, such as building a new factory in Idaho. However, issues like product recalls and quality control tests the company's resilience.

Facing Adversity

"There was a recall... Banks got nervous and wanted their loan to be paid back. It felt like the company was going to drown."
—Hamdi Ulukaya [83:11]

In 2014, a significant recall threatened Chobani's survival. Ulukaya's steadfast refusal to relinquish control and his commitment to ethical practices ultimately steered the company away from bankruptcy.

Maintaining Integrity and Building Community

Beyond business growth, Ulukaya prioritized social responsibility, notably by hiring refugees and advocating for immigration reform. This approach not only fostered a loyal workforce but also enriched the company's culture.

Commitment to Community

"I have never followed the craft route. I followed the kid from Kurdish mountains... I wanted to open the doors and let people participate in the success."
—Hamdi Ulukaya [90:08]

Chobani became synonymous with community support, transforming it from a mere business into a symbol of positive social impact.

Conclusion: A Testament to Resilience and Vision

Hamdi Ulukaya's story is a powerful narrative of overcoming adversity through hard work, unwavering vision, and a deep sense of responsibility towards society. From a modest beginning in a rural village to leading a multi-billion-dollar enterprise, Ulukaya's journey exemplifies the essence of entrepreneurship driven by passion and integrity.

Final Reflections

"I brought a seed loaded with tradition, love, and knowledge. This land was great soil for that seed to grow into something remarkable."
—Hamdi Ulukaya [92:43]

As Chobani continues to thrive, Ulukaya remains committed to ensuring that his company's success benefits not just shareholders, but also the broader community.

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Notable Quotes:

• "I used to get really upset when I see yogurt on the lid."
  —Hamdi Ulukaya [02:52]

• "If it's not successful, I'm out in a very, very, you know, very bad way."
  —Hamdi Ulukaya [03:17]

• "I'm pretty sure this is why Chobani is extremely successful."
  —Hamdi Ulukaya [90:08]

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This episode serves as an inspiring testament to what can be achieved with determination, cultural integrity, and a commitment to making a positive impact. Hamdi Ulukaya's journey with Chobani not only transformed the yogurt market but also set a new standard for socially responsible entrepreneurship.

Transcript

[Guy Raz]

Wondery subscribers can listen to how I built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. I recently stayed at an incredible Airbnb in Palm Springs and I thought to myself, wow, I could live at this place. Have you ever been enjoying your stay at an Airbnb when you suddenly ask yourself, wait a minute, could I do this too? Find out how much your place is [e-mail] airport host listening on Audible helps your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, and new ways of thinking. Audible has an incredible selection with over 1 million audiobooks, podcasts, and audible originals all in one easy app. Enjoy Audible anytime while doing other things household chores, exercising on the road, commuting, you name it. Audible makes it easy to be inspired and entertained as part of your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Sign up for a free 30 day Audible trial and your first audiobook is free. Visit audible.combilt.com if you run a small business, you know there's nothing small about it. But when decisions begin to feel daunting, one thing that has helped many entrepreneurs is knowing that they have the right platform with all of the tools they need to succeed. Shopify Shopify is the commerce platform behind millions of businesses around the world and 10% of all E commerce in the US get all the big stuff for your small business right with Shopify. Sign up for your $1 per month trial and start selling today at shopify.combilt go to shopify.combilt shopify.combilt hey everyone, it's Guy here. So our team is taking a quick break this week, so we've got an amazing story from the archives for you. My conversation with Hamdi Ulakaya, the founder of Chobani, and this really is one those episodes that people always tell me is one of their favorites because it's a story of a guy who came to this country with no English, no money, and somehow figured out how to build the biggest yogurt brand in America. And since I last spoke with Hamdi in 2022, the company's done some pretty big things which I'll tell you about at the end. So for now, enjoy the show.

[Hamdi Ulukaya]

I used to get really upset when I see yogurt on the lid.

[Guy Raz]

On the lid. You didn't want to see it on the lid. You wanted it to be so perfectly smooth in the cup that it wouldn't touch the lid.

[Hamdi Ulukaya]

Yeah. I would open a cup and if I see yogurt on the lid, that was a bad day.

[Guy Raz]

You were totally obsessed with it, as you should be, because you're trying to make a product that's so good that it's gonna knock people out the first time they try it.

[Hamdi Ulukaya]

Exactly. I have no luxury of, oh, I wish I had done that. I wish I had done that. This is one shot if it's not successful, but I'm out.

[Guy Raz]

Welcome to How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Hamdiulakaya arrived in the US with no money and no plan, bought an abandoned yogurt factory and built Chobani into one of the top selling yogurt brands in the US if you were to walk up and down the yogurt aisle in American supermarkets in the 1980s or even the early 90s, your options were pretty slim. You'd see Dannon, yoplait and supermarket brands. And what we now call Greek yogurt was almost nowhere to be found and mainly in small specialty stores, which is kind of crazy because today Greek style yogurt accounts for 50% of the entire 8 billion dollar yogurt market in the U.S. that's roughly $4 billion of Greek yogurt sold each year in America alone. And the brand most responsible for its rise, Chobani. Chobani's founder, Hamdi Ulkaya, is from Turkey, but Greek is the term Americans use to describe yogurt that has most of the water strained out of it, so it's thicker and creamier than other kinds. It's the type of yogurt that Hamdi ate when he was growing up in a remote part of eastern Turkey. And when he emigrated to the US in the mid-1990s, he had no intention of turning the thick, creamy yogurt of his childhood into a billion dollar brand. And the story of how Hamdi came to do exactly that is one of the most improbable and yet inevitable stories we've ever told on the show. Improbable because Hamdi barely had any money when he got here. He spoke almost no English. He had no background in business. He'd grown up in an isolated community of shepherds and farmers. But that is one of the things that makes his success, well, almost inevitable. Because those shepherds and farmers, they knew everything there was to know about cheese and yogurt. And from an early age, Hamdi learned how to make it himself. He also learned how to be incredibly resourceful and as it turns out, incredibly determined, even stubborn when he had to be. He would need those traits to navigate the many hairpin turns he encountered while building chobani, starting with a feta cheese business that almost drove him into the ground. Hande Ulukaya grew up in the 1970s and 80s near a tiny town in a Kurdish region of eastern Turkey. He lived in the mountains with his family in a semi nomadic community.

[Hamdi Ulukaya]

The nomads were really isolated from the everyday life. Yeah, we kind of. We were kind of people like from Mars, really. We would come to town and buy our flowers and sugars and whatever it is, and then the second we are done, we are on our horses and mules and we are up in the mountains. Right. So we don't get involved with anything.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And the only thing that we have exposed to stories outside of that little town and the mountains is the people who come back from the big cities, whether for military service that they have done, or they travel for a reason of selling the cheese or bought some grains, and they will come up with stories and what they saw. But we really were very much isolated from the reality of lives.

[Guy Raz]

Hmm. From what I. From what I've read, your dad had quite a successful cheese making business right in town.

[Hamdi Ulukaya]

Yeah. So he was aga. So aga means he's the leader of the tribe. And my father kind of didn't want to follow that tradition, but he was kind of natural leader. Now because you're aga, you don't have other things, like, you know, we didn't have bicycles, for example, we didn't have toys. We ate the same thing. We had the same conditions. We live under the same tents. So it didn't make it too much difference in life, but what it did is you had a reputation. People will trust you, they will value your opinion. And usually you will buy all the other people's cheese and you combine them. And my father would take it to big cities and sell them.

[Guy Raz]

Right. You know, it's interesting because when you hear like semi nomadic, you think, I think people think like the steppes of Asia or Tibet or something. But I mean, when you grew up, when you were a boy, like you were more or less, you know, I mean, you had everything you needed from what I understand. Right?

[Hamdi Ulukaya]

Absolutely.

[Guy Raz]

Yeah, yeah. You weren't living like in a dirt room, sleeping on the ground.

[Hamdi Ulukaya]

No, no, no. We had a, you know, decent life I don't think we call ourselves poor. We never consider ourselves poor. You know, we consider ourselves lucky.

[Guy Raz]

And you had like television, refrigerators and you know, ovens and. Right.

[Hamdi Ulukaya]

I mean, later. Yeah, later. Yeah. When it arrived to town, we would afford to be able to buy TVs and refrigerators. And I remember my mom when, when she got first time, the washing machine, it was just fascinating. We will all watch it, how it does it, you know, gather around. Yeah, yeah, yeah. It was decent life. Absolutely.

[Guy Raz]

You did go off to college, from what I understand, to Ankara University.

[Hamdi Ulukaya]

Yes.

[Guy Raz]

And from what I gather, from what I understand, you were a student there during a particularly volatile time in Turkey, especially for people like you, for ethnic Kurds. And you became a bit of a political activist at the time. You were I guess even involved with some left wing and socialist groups which I guess made you feel like Turkey at the time wasn't the right place for you to live. And so you decided to leave the country.

[Hamdi Ulukaya]

Yeah, exactly. I thought, okay, I'll go to Europe just because everybody else did at the time. And I had a passport luckily. So I was thinking like I would go to France, I would go to Germany or somewhere around in Europe. And I was talking to my friend, a stranger who actually. A stranger, it's a person. When I helped my brother in his stores, he would come every evening around 5, 30, 6 o'. Clock.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

That guy heard me saying to my friend that I'm going to go to Europe. He just said, don't be stupid, go to America. And I remember telling him, why would I ever go to a capitalist imperialist country that has done all these bad things? You know that typical language. He said, you think Europe is good, go to America. And if you don't like it, you can always go to Europe. So I dismissed him. I said, get your eggs and meat and go to your place and I'll see you tomorrow. That night I couldn't sleep. I thought about what that guy said. Now I had no knowledge of America other than what I saw in movies and tv. So I waited that day, the next day, until that guy showed up and I put him on the side and I said, tell me more. How do you know America? How do you go to America? What can you tell me more about? It turns out that he studied in the US and he knew a lady in the center of Ankara that had an agency that would send students to universities across the country for learning English. And he gave me his her numbers and he said, go to this person, go to school, try to learn some language. If you like the land and if you like the way of living, you can stay and further study. And if you don't, you can go wherever you want to go.

[Guy Raz]

So you basically came to the US under this, on this program to learn English, to study and you. And where did you, where did you land? Where did you arrive to?

[Hamdi Ulukaya]

So I go to this lady and she said, okay, so you want to go learn English? I said, yes. And she says, where do you want to go in America? I said, I don't know. So she opened this map and she was telling me, and I remember like yesterday, oh, I have school in Boston, I have a school in Delaware, I have school in New York. And she was going on, I said, okay, stop, New York, New York is good. And then she opened up another map and says, where in New York? I have few schools in New York. And that was the first time I realized New York is not a city, it's a state, right? So she had a school in Albany, she had a school in Manhattan. And I remember saying that, you know, those big buildings in a big town, big city, not in there, but not too far from there either. So she said, okay, I got you. And two weeks later I had received the acceptance form and this whole thing happened within a month. And I went back to my hometown where I grew up. And my mom was there, and I spent a week there with my mother. And probably one of the hardest goodbye of my life. My mom was old now, she couldn't go up in the mountains anymore. That this is the time where you start seeing snow up in the summits of the mountains. And you know, this is the time that the families are coming back. And I dropped her in the hospital where she needed to have a checkup in the town. And we hug and I said goodbye. And I had a nephew and I was taking him to Ankara to his dad. And I was driving. This is one of the few times that I started to learn drive. And I was driving from town to Ankara. And when I left, I saw my mother on the rear mirror. And that picture I remember always my life. And she's having that motherly walk on the streets towards the hospital. And my nephew tells me, uncle, why are you crying? And I say, I'm not crying, it's raining. And it was raining, you know, from the window. That was my last goodbye to life of tribe, my last goodbye to my town. All the life that I had in those mountains, in the tribes, the shepherds, all the conflicts, all the university, everything that was designed to go for me in that life. I just go back to that moment and that goodbye. And within two weeks, I was in New Jersey. That was the last Turkish Airlines landing in New Jersey.

[Guy Raz]

Wow. And I think you ended up starting out at Adelphi University on Long Island. Is that right?

[Hamdi Ulukaya]

Yeah. Turns out that acceptance was Adelphi University in Long Island. And it was one of the most expensive English class. And I had $3,000 in my pocket my brother gave me from istanbul.

[Guy Raz]

You had $2,000. So you arrive with $2,000.

[Hamdi Ulukaya]

Three.

[Guy Raz]

$3,000, and you get to Adelphi to study English. And how did it go? Or how long did you last there? Because I don't think you were there for very long, right?

[Hamdi Ulukaya]

A month.

[Guy Raz]

A month. Okay.

[Hamdi Ulukaya]

Yeah, just a month. Because the $2,000 of it was spent in the first month.

[Guy Raz]

You're running out of money.

[Hamdi Ulukaya]

I was literally running out of money. I couldn't. I had to learn how to speak. I have to learn. I had zero. Like, really? Zero English.

[Guy Raz]

You had zero English.

[Hamdi Ulukaya]

Zero. Zero.

[Guy Raz]

It's amazing. This is 1994. It's not that long ago.

[Hamdi Ulukaya]

Yeah. This is October 1994. And you're like a fish out of ocean. It is. His whole life has dramatically changed so fast. I wasn't even having mental preparation for this.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

23 years old, 22 years old. You know, it's not easy.

[Guy Raz]

It must have been incredibly lonely.

[Hamdi Ulukaya]

Very, very. But I have other worries. What do I do for living? How do I pay for the school? Where do I work? Am I allowed to work? How do I survive? Who do I trust? Who do I talk to? And all that kind of stuff.

[Guy Raz]

Yeah. And I think at this point, you had transferred to Baruch College in Manhattan and you were still studying English there, is that right?

[Hamdi Ulukaya]

Yes, exactly. And few months in, a teacher at the Baruch College gave a homework for language, and she asked us to write something in English, how to make. And I understood that part, and I wanted to write how to make cheese.

[Guy Raz]

Well, the assignment was how to make anything.

[Hamdi Ulukaya]

Just something.

[Guy Raz]

How do you make something?

[Hamdi Ulukaya]

So with the help of someone in that, you know, place where I was living, I tried to write how to make cheese. And then a week after, this amazing lady teacher, she comes to me with a paper in her hand and tries to tell me with a very passionate voice. I don't know if she's angry at me with what I wrote or if she's trying to tell me something I don't understand. So I brought another Turkish student from the other Class and asked him to tell me what she was trying to tell me. So it turns out she had a farm in upstate New York. She had goats and cows, and she loved my paper and she was inviting me to her farm for a weekend so we can make some cheese together.

[Guy Raz]

Wow. Because you, of course, knew how to make cheese because you'd grown up making cheese.

[Hamdi Ulukaya]

I know, it's like.

[Guy Raz]

And she had happened to have the raw materials, but just didn't know how to use them.

[Hamdi Ulukaya]

Yeah. And actually, the part that shocked me that in New York there was farms. I mean, I never even imagined that there were farms or the animals. I mean, I thought that was in our part of the world. I mean, I never thought about it. So I was having a hard time. And I can't wait for the weekend to come. She tells me which bus to take and where she's going to pick me up. And she wrote down everything if I get lost so I can ask people. And then she put numbers and she picked me up from the bus station, Albany. And then from the Albany bus station is another hour drive to the border of Vermont. You know, this beautiful. I mean, as I'm going, I'm just. I can't believe what I'm seeing in these hills, in the mountains. I feel like I'm back home. And it was a simple farm and that they were professionals, husband and wife, one teacher, and one was engineer. And they wanted to have a farm.

[Guy Raz]

And it was their weekend. Like, their weekend home.

[Hamdi Ulukaya]

Yeah, they would come for the weekend.

[Guy Raz]

So, all right, so you get up there and so what do you do? I mean, you're there for the weekend, so what did you do? How do you teach them how to make cheese?

[Hamdi Ulukaya]

We made it from the goat's milk, which is the closest to sheep milk that I grew up. And in the evening, they made sandwiches, they made fire. And we sit around the fire, which is, you know, that's what we used to do, you know, when we were up in the mountains, I had the best time. And the end of the second day, as I was getting ready to go to the bus station, I said, what would take. Like, in that line, I don't know how I said it, for me to stay in the farm and work in the farm and go to school from here. I don't know what she exactly said. I think there were some issues with it. But in month or two months later, she said, you know, if you still want, you can come and stay in the farm.

[Guy Raz]

So she was offering you to go move up there?

[Hamdi Ulukaya]

Yeah. When I came back, I made my mind. There is no, no way. No no way I'm living in the city. I'm moving somewhere up there. Definitely. Because now I know a place like that exists.

[Guy Raz]

You want to be around goats and sheep.

[Hamdi Ulukaya]

Exactly.

[Guy Raz]

And trees and rivers. I get it. I totally get it. So she offers you to move up there, and you took the. We know you took the offer.

[Hamdi Ulukaya]

I jumped.

[Guy Raz]

You jumped?

[Hamdi Ulukaya]

Oh, my God, I jumped.

[Guy Raz]

What were we gonna do for. Was she offering to pay you too? Or were you just gonna figure that out on your own?

[Hamdi Ulukaya]

Well, I don't think they could pay me.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

But I could live and help. Right. So that's kind of how it could. And I. Till I get a job or I move out and all that stuff, but it ends up being that I lived in that farm for a year and a half.

[Guy Raz]

And what did you do?

[Hamdi Ulukaya]

I did everything. I did everything in that farm.

[Guy Raz]

And you're living there by yourself in rural New York? Upstate New York, on the Vermont border. Just you. This, like, this kid from Turkey.

[Hamdi Ulukaya]

That's exactly how you describe this kid from. You know, the Kurdish kid from eastern part of Turkey, living in a farm. And what do I do? So I wake up 5 o' clock in the morning, I gather the cows and I put them on the lineup. I milk them, I water them, make sure that the calves are fed, and then I will drive 60 miles to Albany to go to school in Albany, continue to learn English. Oh, wow.

[Guy Raz]

And you did that every few days?

[Hamdi Ulukaya]

Every day. Every day I drive.

[Guy Raz]

And by the way, Hamdi, did you have any friends? I mean, you're like in your 20s. You're a young guy. Were you just like, milking cow? You're working on the farm, going to school, Working on the farm, going to school.

[Hamdi Ulukaya]

In the last six months, my brother, my younger brother came and joined me. Not much friends, the everyday farmers. I interacted with farmers. And really, I think I got to know America really well because I moved up there and I got to interact with farmers. I got to interact with residents, real people. Not in New York, really. You have people from all over the world. Right. So you have Turks and everybody up there. You know, I was probably the first person from Turkey that I've ever seen.

[Guy Raz]

Yeah. All right. So your brother comes and visits you while you're there, and then I think the following year, 96, your dad comes to visit you in New York.

[Hamdi Ulukaya]

Yes. The simple way of putting it in is my mother sends him to say, go check them out and see what they're doing right. And then he comes and I'm trying to figure out what I'm going to do with my life. I don't know. But one thing is for sure. We have to work. We have to make some kind of income. And he said, seems like there's not good feta cheese in here.

[Guy Raz]

Your dad, when he visited, he noticed that the. What we might call feta cheese. Right.

[Hamdi Ulukaya]

Is not good here. And it was not good. It was pretty awful. Yeah, it was pretty awful at the time.

[Guy Raz]

And. And just to be clear, like, this is something that he would just eat for breakfast every morning. Right. He would have feta or. And. And I mean, olives. Right. This is kind of a traditional Turkish breakfast.

[Hamdi Ulukaya]

Right. And he tasted, and he says, this is really bad. Is there anything good? I said, no, this is it. What we can find. And he said, wow, why don't you ask your brothers to send you feta cheese, then you can sell it here. That was the big idea?

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So I got to work and found an Armenian distributor who carried Middle Eastern products, based in Queens.

[Guy Raz]

In Queens. Okay, so you found. And they were. And you called them to see if they would be interested in carrying your cheese?

[Hamdi Ulukaya]

I called and I went to visit with him. So at that time, I got some samples and stuff from back home. My brother sent it to me, and I went to visit, and I said, we make this cheese. Would you be interested buying it? I said, well, you have to know the law. It has to be 100% sheep milk. Otherwise it will be exposed to duty. It will be too expensive. All these worries and questions, but the answer was, yes, I will consider it. And that was the beginning of my business journey. Until that moment, I had never been involved with business. Yeah.

[Guy Raz]

Can I ask you a question about the cheese? So this is cheese that your brothers were actually making back in Turkey?

[Hamdi Ulukaya]

Yes.

[Guy Raz]

And was the cheese in jars? Was it canned? I mean, how did you. How did they ship it? Was it shipped in coolers or did it not require cooling at all? How did you receive it?

[Hamdi Ulukaya]

Definitely cooler. Yeah, definitely cooler. It has to be refrigerated.

[Guy Raz]

Right.

[Hamdi Ulukaya]

And we made really good money on importing that cheese, at least compared to, you know, working here and there. Right. So we don't have a lot of expenses.

[Guy Raz]

Right. It was just you and your brother and just making sure the cheese arrived, and that's all you were importing, just the feta?

[Hamdi Ulukaya]

That's it?

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

But then my mother got sick and I went to Turkey, and I came back with my mom, discovered that my mom had a very severe liver disease that we had no idea that she had it. Then six months after she passed, I had this time of being again, feeling like numb. It was this time of total loss.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

Because she was the most important person ever been in my life, and she was the most important person in the family. She, you know, my father was a big shot and all that kind of stuff, but really, it was my mother, the reason that I was in New York City, that she made me to be that person, to be independent and come here. And of course, my God, the love that she had and caring that she had. And then she made us. At least I can speak on my own. She made you feel like you were the most special person in the whole universe and made sure that you believed in it. So she was my backbone. She was everything that I was. And now she was gone. So it was very, very massive event, and it was extremely difficult to really stand up and get out of the bed for a long, long time.

[Guy Raz]

Wow. I guess you were eventually able to somewhat recover from that and get back to the business that you were running with your brother, Bilal.

[Hamdi Ulukaya]

Yeah.

[Guy Raz]

But from what I gather, you started to. Maybe both of you started to think, you know, hey, we can probably make more money or grow our business if we made the cheese or we made it here in the U.S. right. How did you start to tell me about, like, that thought process? When did you start to think that that's what you should do?

[Hamdi Ulukaya]

It was another idea of my father of saying, you know, this importing thing is, you know, with the currency going up and down and all the things that are happening, and it's not a very hard cheese to make, and you can even make it with the cow's milk. Why don't you find a place where you can make this cheese here, given there were domestic feta being made here? The problem was it was horrible. Like, literally awful. Like, it was so bad, and say, okay, people are buying this stuff, so if you make it a little bit better, you know, it's endless.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So this is no brainer. The question is, okay, where do you make it? How do you make it? What kind of environment? What kind of place? And how do you put this together?

[Guy Raz]

When we come back in just a moment, How Hamdi starts his own cheese business, but switches to yogurt after pulling a vital piece of junk mail out of the garbage. Stay with us. I'm Guy Raz, and you're listening to How I Built this. I just got back from a trip to Germany And I stayed at an awesome apartment right in the heart of Munich, right on the Marienplatz. And it was like one of the coolest places I had ever stayed at where I could cook and enjoy the city and hear it and feel it and just walk right out into the main square. Right there was a beautiful place. And to be honest, I really didn't want to leave. The next time you're away from your own home, consider hosting your space on Airbnb. Hosting on Airbnb provides you with an extra income stream, plus your earnings could even help offset the cost of your next trip. Your home might be worth more than you think. Find out how [e-mail] host how I built this is supported by Ring. With Ring, you can be there from anywhere with doorbells and cameras that help you see more to exciting features that help you know more to the app that lets you connect more see more at the front door, up high and down low with battery doorbells, head to toe video capture it all, all day and all night and get smarter alerts that know the difference between a person and a package right in the Ring app. I use Ring to check in on my dog when I'm out of the house or running errands just to make sure everything's okay. It's awesome because I can see her wherever she's in the house. With Ring, you can check in and be there from anywhere. Some features require a subscription and are available only on select Ring devices. Exclusions apply. Learn [e-mail] if you've started your own business, you know just how many challenges there are, big and small. I mean, look at how I built this building. This show came with a lot of trials. Late night nights, very, very early mornings. But even though there were challenges getting started, there is something that makes setting up a new business easier. Getting connected with AT&T business it doesn't matter what your business is dealing with, AT&T business helps to make it much, much easier. And that's the point of a provider in the first place. Making building your dream easier. Wake up to the power of AT&T [e-mail] that's business.att.com hey, welcome back to How I Built this. I'm Guy Raz. So it's around 2002 and Hamdi has decided to start making and selling his own fetichees. He gets a local development grant to open a small factory in Johnstown, New York. And now he needs to get hold of some vats for making the cheese.

[Hamdi Ulukaya]

How do I afford to bring the vats? Vat is this stainless steel vessel, let's say £2,000. They can go £10,000 where you pasteurize the milk.

[Guy Raz]

Right.

[Hamdi Ulukaya]

It's like, how do I afford to these equipment? And there was a local bank called MBT in Johnstown. The gentleman there said, you know, you can get the USDA to have a loan guarantee, meaning it gives some kind of comfort to the banks. I guess that's the way to put it in place, that they will lend to the local businesses to start their business or expand their business. And if it goes wrong, then the risk is 90% removed. And they set up the meeting with a gentleman out of Syracuse of the usda, and he came and met with us. And then we heard back after I don't know how long, a month or two, that we were given 90% guarantee or the banks was given 90% guarantee. It was mind blowing. So that basically took care of that part. All I had to worry about is the 10% and working capital and all the unthinkables.

[Guy Raz]

Yeah. All right, so you get the loan, right, to make this happen. And you've got two things that you have to do. You have to start making cheese and then you have to start selling it. So first of all, in the making cheese, because I think the Factory opened in 2002. You called it, it was called Euphrates. This is the company that you and your brother started to make cheese.

[Hamdi Ulukaya]

Exactly.

[Guy Raz]

And did you. So you made cheese, you had a palate by, you know, that year for sale. So I'm assuming the making the cheese part of it was not that hard. It was the everything else that was hard. Or am I wrong?

[Hamdi Ulukaya]

No, in theory, it should have worked. You know, you have the milk, you have the culture, and it should work. I had one of the worst time making the cheese.

[Guy Raz]

Why?

[Hamdi Ulukaya]

You know, turns out the theory and the reality is two different things.

[Guy Raz]

But you knew how to make cheese. You had been making cheese for years.

[Hamdi Ulukaya]

Yeah. The milk is different, right. And then you make the cheese and then how it stays. And after two months or a month or two weeks, the texture is not right. I mean, it's close, but it's not perfect.

[Guy Raz]

You're saying getting the consistency is hard because every milk, every shipment of milk.

[Hamdi Ulukaya]

Is different, every Chevy of the milk different. Now we made cheese with unpasteurized milk. Now you're pasteurizing. And so you have to fine tune that. And you're relying on culture companies, you're relying on, you know, Equipment companies to be able to make that kind of adjustments. So there's a lot of trial and error. We couldn't do any of those things until we had the vats in place.

[Guy Raz]

Yeah. By the way, how many people are working there?

[Hamdi Ulukaya]

5, 10, 10, 12 people. Yeah. I'm making the cheese, I'm packing it, I'm salting it, I'm putting in the pallet pails, you know, 10 pound pails or 20 pound pails, whatever it is.

[Guy Raz]

Where did you find. Where did you find customers to sell all that cheese?

[Hamdi Ulukaya]

So that's a. I start looking at Greek distributors now, because now I'm really making feta. Like, really feta?

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

This is not a table cheese anymore. It's a salad cheese. It's a cheese that they put on their Greek salad. Right. So who are the buyers of this cheese are the Greek distributors? And what they do is they deliver to diners. You know, these diners are all over the Northeast.

[Guy Raz]

There's Greek diners everywhere in the Northeast. Everywhere.

[Hamdi Ulukaya]

Yeah. It's to go places. Right. So in these diners, one of the most popular thing that comes even without you ordering is the Greek salad. And that Greek salad has chunks of feta on it. Yeah. But soon enough, I realized that this is not a huge margin thing.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

You know, you have large manufacturers, even though their product is pretty awful, you have these large manufacturers out of Wisconsin that make millions of pounds.

[Guy Raz]

Right.

[Hamdi Ulukaya]

They ship it all around the country. And, you know, you look at the diners, the quality is not the number one thing, really. I mean, it is, but it's not. You say, yeah, it says, I get it. But I put the onions in there and I put black olives in there, and I put black olives and I put the olive oil. No one cares about the feta by the time you.

[Guy Raz]

Yeah, yeah, I get it, I get it. But so. And were you going literally from diner to diner or were you working with like a big distributor who would then do that for you?

[Hamdi Ulukaya]

Yeah. So not big, but the distributors. You can't go diner to diner.

[Guy Raz]

Yeah. It's not possible. You can't scale that. Right.

[Hamdi Ulukaya]

Yeah. So the first eye opening for me was I called this distributor out of Syracuse and says, can I come and show you some feta? I said, sure, come. And I go and I show him. He says, okay, I'll buy it from you. And I'm like, wow. You know, I feel like this is cool. I said, how much you buy is two pallets a week? No. Every other month. Oh, God. I Mean, two pallets every other month is not even fraction of. It's nothing, basically. So how many of these people I have to have to be able to even pay for my expenses? It is at this point I'm saying what an f I did now, like what I get myself into.

[Guy Raz]

Yeah, I read something you said. You said that the years, those two years from 2002, when you started the factory Euphrates in 2004. So the first two years you said was the most difficult time of my life.

[Hamdi Ulukaya]

Yes, it was literally most difficult times of my life. And I have gone through some difficult life before that. But this was really, really hard. There was no way I could survive. There's no way this could make to the other side. There's no way every day this business was gonna die. Every day, every day, Every day. I don't have resources, I don't know the knowledge. I don't have experience. I'm new to the country. I got myself into this. I'm already not complete since my mother's dad. I mean, it's a lot of emotions. And I remember there was a little creek next to the plant and I will go there and I will cry and cry and cry by myself and then I will come up after I'm done inside the factory and start making cheese. But it was that two years made me who I am today. But also it was one of the most difficult times of my life.

[Guy Raz]

Yeah, that two year period, you got through it, but you did start to turn a profit after those two years. A small profit, I think.

[Hamdi Ulukaya]

Yeah. So I realized that I'm not going to be able to sell the fatah amount that needed to pay all my expenses in this place to one person or two person or five person. I have to get it as much as I can. So that means that I have to go between Boston or New Hampshire or Maine to all the way down to Florida and East Wise, maybe Detroit and Chicago and find all these small distributors that would buy one or two pallets a month. I slept on the roads with the van and meet all these amazing small distributors. Family owned smell distributors.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I end up getting them, hundreds of them.

[Guy Raz]

Yeah, because I think your sales were. I think you hit about $2 million in sales by 2005, but you had like 40 employees. So no one is getting rich, you know, of 2 million in sales and 40 employees.

[Hamdi Ulukaya]

No, I didn't think that this would make me rich or you would get rich out of this.

[Guy Raz]

Right.

[Hamdi Ulukaya]

All I wanted to do is survive, you know, and two years, 2004. You get it and say, okay, I think I survived. I think I survived.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

Like, middle of 2004, I felt like I could breathe. Yeah.

[Guy Raz]

Yeah. Wow. But that year, something pretty pivotal happened. A property came. Came up for sale, I guess, not too far from there. What. Tell me the story of how did you find out about this property? What was it?

[Hamdi Ulukaya]

So here's the thing. I'm really a messy person. Even today, I'm pretty messy in my office and my desk.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So once, maybe a month, maybe every couple of weeks, I decide that I'm going to organize my desk. I'm just going to go through all the documents, all the papers, all the letters, you know, and you open the envelope. Sometimes you don't even open the envelope. You look at the. Where is it coming from? And you know, this is. Somebody's trying to sell cars. Somebody tried to sell mortgage. Somebody tried to sell credit card, whatever that is, you know, those junk mails, and you just tear them off and put them in there. And every once in a while you see an interesting envelope. So I come to this one and I open the envelope. I don't know where it comes from. Of course it's interesting. I open it, I look at it. It's literally an ad. It says, fully equipped yogurt plant for sale.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

And you can tell that it's really, really old. I mean, the picture is. Also says 1920. You can tell it's an old. And of course, you know, no interest. So just like the other ones that I don't remember what it was, I throw them into the garbage. I continue, and you're going through like 20, 30 minutes, and I still don't know why I went back to that garbage and I picked up that page. Now my tea remaining is in there. My, you know, my cigarette that it was. Put it into a tea. Teacup that is also in there. And I look at that picture again, and I'm staring at it, and there's a big number on top that turns out that it's a real estate agent from Utica. And I called, the person answered and said, yeah, this is a yogurt factory. It's an old one. It's craft. And they closed it and they're selling it as is. And I asked the price. I said, what's the price? He says, $700,000 for a yogurt factory? Yeah.

[Guy Raz]

Okay.

[Hamdi Ulukaya]

And I'm looking at this whole thing, and he said, even if it's the worst condition, how could this be $700,000?

[Guy Raz]

What, you mean it was underpriced?

[Hamdi Ulukaya]

So cheap. It's very cheap. So I thought he meant $7 million.

[Guy Raz]

You thought based on the. Based on the photo you saw on the postcard, that it was $7 million because. Just because of the equipment.

[Hamdi Ulukaya]

Yeah, because I know pretty much what things cost from the experience of putting a smaller version into our plant. It's 20,000 square feet. This one says 67,000 square feet. So it's three times bigger.

[Guy Raz]

And it was owned. And it was owned by Kraft at the time they were selling it.

[Hamdi Ulukaya]

Yes. Okay. Yes. So it was enough. Interesting. So I said, can I come and see it tomorrow? And I picked one of the guy from the plant who was working in the production. And it took us two and a half hours to find it. It was just back roads and country roads. It's not like next to the highway.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I saw it from the distance, this old place. And I get there, and you go up and then someone. Name is Rick Lake. Rich Lake. Says, hi, I'm the production manager. The plant manager is not here. I was told to give you a tour. And he takes me to the plant. And it's basically every time he goes into places, he turns the lights on. It's not a working factory anymore. It was until maybe four months ago. Five months ago.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So that's basically the last week of the plant. All employees are 55 people. In the last six months. They're just, I guess, closing down slowly. Bringing down, shutting things off.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

I am not seeing the buildings anymore. I'm seeing. I'm reminding this sad feelings that only would come to our town, where I grew up, if somebody died in the Euphrates River. And for months, for weeks, like, there was this heavy feelings all over the town, like, people.

[Guy Raz]

You felt that when you got to.

[Hamdi Ulukaya]

The town, you felt it. Yeah. You felt it like this. Wow.

[Guy Raz]

Like a funereal feeling.

[Hamdi Ulukaya]

Yeah. I felt like somebody died because they.

[Guy Raz]

Were about to lose their jobs.

[Hamdi Ulukaya]

They were not only losing jobs, they're losing a place. It's been there for 70 years. It was a sign of life, really. That steam came out of that place, was a sign of life. Everybody's grandfather worked there, mother worked there, father worked there. It was just walking in that plant, was walking in a cemetery. It was that kind of.

[Guy Raz]

And by the way, from what I understand, this was a place that made cream cheese. Philadelphia cream cheese was made there.

[Hamdi Ulukaya]

Exactly.

[Guy Raz]

And yogurt, too.

[Hamdi Ulukaya]

Yes. Breyer's yogurt. Yeah.

[Guy Raz]

And I'm curious because from what I Understand, from what I've read, it was really old. I mean, it was like crumbling paint, and it was not in great shape. It didn't look good.

[Hamdi Ulukaya]

Yeah. And there's a smell. Old smell.

[Guy Raz]

Like, old. Just kind of stale or, you know, kind of.

[Hamdi Ulukaya]

Yeah.

[Guy Raz]

Old cheese smell.

[Hamdi Ulukaya]

Yeah. Everything is old. The biggest important things that the real estate agent keep telling me is that it is as is. We don't take any liability. Whatever the things that you find is good and bad, it's all yours.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I left that place after a couple of hours. And then when I left, I called Mario Papa, who was my attorney in Johnstown, and I call him up and say, mario, I find this place. I didn't think that I would be interested walking in, but now I just left. It's a really amazing place. It's got everything. I can make yogurt there, and I want to buy it. And I'm like. I'm just like. You know, when you see something and you just call and you don't make sense, you throw all the words that you know into it, and you're excited and all that kind of stuff. This guy's like, wait, wait, wait, wait, wait, wait. Just wait. Hold on, hold on. He tells him, tell me what you think. Who owns the company, who's closing it, what kind of place? And the guy said, hamdi. This is the largest food company in the world.

[Guy Raz]

Kraft.

[Hamdi Ulukaya]

Yeah, yeah.

[Guy Raz]

One of them.

[Hamdi Ulukaya]

Getting out of yogurt business. They're closing the factory. Who the f. Are you? You think that you can make something out of this?

[Guy Raz]

Which is a fair question. I mean, if the biggest. One of the biggest food companies is getting out of the yogurt business, at least there in that factory, why would you think you could make it work? He was asking you. Fair question.

[Hamdi Ulukaya]

Yeah. Makes no sense. Very fair question. And I said, no, no, they don't make good yogurt. I can make good yogurt, and I know how to make good yogurt in Turkey, and people love it. I've seen it in New York and all that kind of stuff. And he said, 700,000, right? I said, yeah, it's cheap. 700. I said, you don't have $700,000.

[Guy Raz]

He said that to you? He said, you do not have.

[Hamdi Ulukaya]

Yes, exactly.

[Guy Raz]

You do not have $700,000.

[Hamdi Ulukaya]

You will never have $700,000. And if anything, you haven't paid me in the last six months. I have bills. It just basically said. And it was true. I had not. So he said, you just made it I know it's been painful for the last two years. You just can't breathe now. Don't do this to yourself. I know you get excited about things, but just breathe.

[Guy Raz]

Which is very good advice. I mean, it's good advice because he's trying to look after you. He knows what a grind it was the previous two years to make the cheese factory, the cheese plant, barely profitable. And he knows that you're in for a nightmare if you try to do something new now.

[Hamdi Ulukaya]

Yeah. He thinks that this is the stupidest thing. And I took his advice very seriously. He was right.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I am in my office maybe a few weeks after, I have this regional Bank. It's called KeyBank. And, you know, they're salespeople. They go from businesses to businesses in the communities and say, what can we do? Do you need anything? You know. You know how they are. And there's these two gentlemen shows up. One, his name is Pat Bucci, and then he has another person next to him. His name is John Ryder. And I said, pat, I just went to this place and I saw this yogurt factory, and they're selling it for $700,000. And, you know, I called Mario. Mario thinks it's a stupid idea, but I thought, you know, if I get this place, I could make some really cool yogurt out of this place. And I keep talking about it, and he says, hamdi, you know, we are partnered with SBA Small Business Administration, and if we get their backing, we can come up with a plan. I mean, of course I have to go look at the plant and look at the equipment and all that kind of stuff. We could make this happen. It's a small chance, but it's possible.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

It's worth pursuing. He says, why don't you make a business plan, and I'll send you some applications and you fill it and we can look at this now. I said, business plan. I've never done a business plan. How do you make a business plan? Yeah. In the last couple of weeks, I put a business plan together, a couple of pages. He helped me how to do it. And then few weeks later, we went to. Few days later, we went to the plant and see it. And we kept in contact with the real estate agent to tell the. To make the story short, they got you the loan. They got me the loan.

[Guy Raz]

Wow. Can I ask you a question about the business plan for a moment? I mean, your plan clearly was to make yogurt, but what were you gonna do that was different? How are you gonna. I Mean, if Kraft wasn't making it work, what was the thing that, like, when people said to you, hey, Hamdi, what are you gonna do? What'd you say?

[Hamdi Ulukaya]

So here's a little bit of background. You know, I don't know if it's. I mentioned we eat so much yogurt in Turkey, right? So, yeah, breakfast, lunch, dinner. I mean, you can't imagine a meal or time or occasion that you don't somehow consume yogurt, right? But compared to what it was here, the yogurt was 10 times worse. It was literally horrible. Like, it was awful stuff, right? And I thought, it's milk and culture. There's no cost side of this. It's just milk and culture. It's just knowing how to make it. And I thought, people will love it. Why would it not? If there is a better yogurt that is made, I thought, people will love it. If they're buying this shit, they could buy that stuff. If they're buying that stuff. Yeah, they would buy that thing. That was my data point. And then the second data point for me was, you know, if you meet with people and people ask you, where are you from? And you say, from, I'm from Turkey. The next thing they say, oh, I was in Turkey or I was in Greece. And within few minutes, the first thing comes up is the yogurt that they had in in Greece and Turkey, you know, with honey and walnut. And that was one of the best thing ever. So there is a disconnect between how people are talking about it and how the market conditions are.

[Guy Raz]

So you have the confidence that this can work. You get the money to buy the factory. And from what I understand, that summer of 2005, you spent a lot of that time just getting the factory cleaned and painted and repaired.

[Hamdi Ulukaya]

Yeah, exactly. So within that, I have four factory workers that I hired, actually. The manager, who was the plant manager, who was closing the factory. I asked him, I said, if one day I wanted to bring this factory back, who are the people you would recommend for me to hire? And he recommended. He says, you gotta get Maria because she knows all the vendors. You gotta get rich. Because he knows all the production equipment. You have to have Mike Allen. Mike is the guy. The guy knew exactly where all the pipes were, where the lines were, because there was no drawings. This was so old. No one had the blueprints of the plant. So I had to convince my Callum to come back, which I did. And then the wastewater side of things, that was Frank. He knew how to turn that back on. So I had those four people with me in the summer of 2005, and they're questioning me, they're looking at me, says like, who is this guy? How are we going to. And I can tell the way that they are interacting with me that they're not overly excited, they're not overly, you know, drunk with it, but they're cautious. At least they have a job. And they're looking at me and saying what kind of, you know, ideas and improvements that he's going to make. So I'm managing that human psychology at the same time, while I am not saying I don't have any ideas, but at least I'm not sitting around and doing nothing.

[Guy Raz]

All right, one important point, and just to. And I think a lot of people know this, which is the reason why what we call Greek yogurt is thicker, is because it's separated from the whey. Because milk is 99 or 97% water. Right. And then when you turn it into yogurt, there's still a lot of water in there. So you've got to literally put in a centrifuge, like spin the yogurt right. Really quickly to get the water out. But you did not have like. That's a very expensive piece of equipment. I don't think it was in that factory. Right. Because this factory wasn't making Greek yogurt. It was making regular American style watery yogurt.

[Hamdi Ulukaya]

You're 100% right. In a. Commercially, this cannot be done with the cheesecloth. It needs to be centrifuge separator. And these separators are, I would say, close to a million dollars by the time.

[Guy Raz]

Million dollars. And by the way, you just spent $700,000 buying this production facility.

[Hamdi Ulukaya]

Yeah. So there's no way in hell I have million dollars to buy something like this. I only have maybe a couple of hundred thousand that I can spare, and that includes everything. So I need a used version of this. So I'm going on Internet looking at everything I can and see if I can find something that is used. So I found one in Madison, Wisconsin and I called the person, they said they have it, I wanted to go see it. So I went to Chicago drive from Chicago to Wisconsin. And in that drive, basically I came up with the name Chobani. Choban means shepherd in Turkish and chopani, in a little bit of different way of saying, it also means shepherd in Greek. But the meaning of the word is always pure, simple. You know, someone who helps someone who leads someone. It's a very beautiful word. In all dimensions.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I was so excited with the name. I couldn't wait until I get back to Chicago to go to my room and see if that chobani.com was available.

[Guy Raz]

And I guess it was because you got the domain.

[Hamdi Ulukaya]

Yeah.

[Guy Raz]

And so now you've got a name and you've got a separator to make the Greek style yogurt. So what else did you need to do? What happened next?

[Hamdi Ulukaya]

So I spent a limitless amount of time about the cups. You know, what the cups is going.

[Guy Raz]

To look like, the cups for your yogurt, that you were going to sell.

[Hamdi Ulukaya]

Cups for more yogurt. I was so convinced that if I am going to make this yogurt and is going to make it in the shelf, it cannot be in the cups that is available in this country. It needs to be some European cups. But the cups are as simple as it sounds. If it goes into yogurt, it needs to be FDA approved. So you can't just get the cups from anywhere. It needs to be FDA inspected. Plant. And I found out that there is a plant in Bogota, Colombia that I went and they said, we will make it for you, we will sleeve it for you and we'll ship it for you. And I said that was good because none of the packaging companies here would make it for me.

[Guy Raz]

And this was going to be initially Chobani was just single serving yogurt. It wasn't like it in the big tubs that you buy it in now. Initially it was just a small cup.

[Hamdi Ulukaya]

Exactly. Small cups. Yeah. And then I wanted to have a foil that every flavor has its own foil design on top of it. And at that time, you know, for now, it's very, very normal. It's not a big thing. But at that time, people said, why, you know, people never do those things. And don't you, don't you waste, don't you, aren't you wasting your money? Aren't you making yourself competitive and all that kind of stuff? My view was I spent so much time making this yogurt and I think it's, it's one of the best that I've made. And people will not, you know, see the difference if I put them in the same cups. So if I can't catch data eye, have them to try it once. The yogurt will finish the work.

[Guy Raz]

Got it.

[Hamdi Ulukaya]

And that will be the conversion.

[Guy Raz]

And the recipe is simple. It's milk and a culture. But I guess when you talk about perfecting it, it was about how long you sort of you heated it, you know, and how long you sort of let it kind of rest. I mean, because the basic ingredients, it's two things. It's milk and culture, Right?

[Hamdi Ulukaya]

That's exactly right. And unless you make the flavor ones. But the basic thing is very simple. Milk and culture. Yeah. And you don't want to use preservatives, and you don't want to use any. Any other ingredients. So it was just trial and error until you find it. It was.

[Guy Raz]

Yeah. And really, it was about. It was about experimenting with temperature, time, and incubation. And then you've got to blend it to make it creamy. Right.

[Hamdi Ulukaya]

Right. After you strain it, the. It particulates, you know, you have small particles.

[Guy Raz]

Lumps.

[Hamdi Ulukaya]

Yes, lumps. And you need to smooth that without breaking the texture. Right. So that's extremely important as well. I used to get really upset when I see yogurt on the lid.

[Guy Raz]

On the lid? You didn't want to see it on the lid. I wanted it to be so perfectly smooth. In the cup. Exactly. It wouldn't touch the lid.

[Hamdi Ulukaya]

Exactly. I would open a cup, and if I see yogurt on the lid, that was a bad day.

[Guy Raz]

Right, right. You were totally obsessed with it, as you should be, because you're. You're trying to make a product that's so good that it's gonna knock people out the first time they try it.

[Hamdi Ulukaya]

Exactly. I wanted to make it something that they look at from every dimension. This is something that they've never seen before. And probably halfway through, it would have made the job, because this is huge. Standards. I'm going, yeah, but I have no luxury of, oh, I wish I had done that. I wish I had done that. This is one shot. But if it's not successful, I'm out. And I'm out in a very, very, you know, very bad way.

[Guy Raz]

When we come back in just a moment, how Chobani starts growing so quickly that Hamdi can barely keep up. And then how it almost goes bankrupt. Stay with us. I'm Guy Raz, and you're listening to How I Built. Are you struggling to stay focused, and are you looking for something that can actually help you really hone in on your work? Remarkable. The paper tablet might just be what you're looking for. So what exactly is a paper tablet? In short, it's everything you love about paper, but with the power of modern technology. Remarkable. Just released their third generation paper tablet. Remarkable Paper Pro. It's thin, minimalist, and feels and sounds just like writing on paper, but comes with powerful digital features. Like handwriting conversion, a built in reading light, productivity templates, and more. I started using the Paper Pro to take notes and it really helps me get my thoughts down without needing to grab a paper notebook. Not sure if it's for you. No worries. You can try Remarkable Paper Pro for up to 100 days with a satisfaction guarantee. If it's not the game changer you were hoping for, you will get your money back. Head over to remarkable.com to learn more and grab your Paper Pro today. Trust isn't just earned, it's demanded. Whether you're a startup founder navigating your first audit or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or more complex. That's where Vanta comes in. Businesses use Vanta to establish trust by automating compliance needs across over 35 frameworks like SoC2 and ISO 27001. Centralize security workflows, complete questionnaires up to five times faster, and proactively manage vendor risk. Vanta not only saves you time, it can also save you Money. A new IDC white paper found that Vant customers achieve $535,000 per year in benefits and a platform pays for itself in just three months. Join over 9,000 global companies like Atlassian, Quora and Factory who use Vanta to manage risk and prove security in real time. For a limited time, our audience gets $1,000 off [e-mail] that's V A N T A dot com built for $1,000 off. Hey, welcome back to How I Built this. I'm Guy Raz. So it's 2007, the yogurt factory is up and running, and Hamdi has found the first retail location for his Greek style yogurt, a kosher grocery in Great Neck, New York.

[Hamdi Ulukaya]

When I made that first yogurt, it took us all night. Kyle and I, one of my colleague who led the sales side of things, we were in the plant probably until like one or two o' clock in the morning and we made four flavors each about 50, 60 cases and we shipped it to this person and I'm waiting for some kind of response, how is that going to come? And when I received the second order, I called the person and I said, what do you see? If you could share me some observation? He says, you know, he didn't say this is flying off the shelf. He didn't say, this is amazing. He said, okay, well looks like people are buying it. And some people came back and bought again. So yeah, Send me some more. And that was encouraging.

[Guy Raz]

Yeah. And then I guess pretty soon after you got into that kosher store in Great Neck, you got into your first grocery chain, which was shoprite, which is a chain of stores on the east coast. And that must have been a pretty big deal, right?

[Hamdi Ulukaya]

Yes. That is the biggest event in the history of Chobani. Now, in order to be able to make it to shoprite or that kind of conventional stores, you have to pay what they call it, listing fee.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And every cup, I don't know what it is now, but I think at that time was $30,000 for each cup to be on the shelf.

[Guy Raz]

Just let me understand this. So when you go to a small kosher grocery store in Great Neck, New York, you just send them a pallet and that's it. But if you want to get into a big grocery store like Kroger or shoprite, you actually have to pay them a fee to stock your products. And it can be a lot. It could be tens of thousands of dollars per product that you sell.

[Hamdi Ulukaya]

Exactly.

[Guy Raz]

And by the way, all grocery stores do this, right? Target, Walmart, they all do this.

[Hamdi Ulukaya]

Most of them.

[Guy Raz]

And they do it because they can. Right.

[Hamdi Ulukaya]

Basically, that's the only way that's a revenue generation for them. And for a small startup, it's a big block. If you want to play on the mass supermarket chains, you can pay, I don't know if you have four SKUs, four products that you put on the shelf. So four times 120, $150,000 and $150,000. Massive money. And if it doesn't work within three to six months, it comes off the shelf. So he has to perform to stay. There's no obligation.

[Guy Raz]

So it's a huge risk.

[Hamdi Ulukaya]

It's a huge risk.

[Guy Raz]

But here's the thing. It seems to me the next logical step would be to go to Whole Foods and to try to get into Whole Foods, which is easier in a lot of cases because there's a lot of autonomy and the buyers are regional and they don't have the high stocking fees or I think any fees. So why wouldn't you just go down that route?

[Hamdi Ulukaya]

So I did not have huge interest on natural channels. I wanted this product to be in a mass channels where ordinary people.

[Guy Raz]

You didn't want this to be like an elite product.

[Hamdi Ulukaya]

Exactly. I was very convinced once I can make this to main channel and people tasted it, this is going to go up. You know, everybody was going to happy. All I needed was one example.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And then the shoprite guy said, how are you going to pay for the. For the list mp? And this is a true story. The guy said, well, we need to get paid. And we had no money. And we said, can you take percentage of that 150,000 from each invoice when we ship it to you? And the guy said, yeah, that's fine, but what if it doesn't sell? You know, I have no invoice. I have no. What am I going to cut it from? I personally said, if it doesn't sell, I will give you the factory.

[Guy Raz]

Wait, so let me just say. So he's saying, well, what if it doesn't sell? You're saying my factory is the guarantee?

[Hamdi Ulukaya]

Yeah, I said, I'll give it back. And the guy laughed. And I think he found out that this is pretty crazy and bold, and he made a decision to take it. And then about two weeks later, I had a phone call from him. He asked Kyle to call me, and he called me and he says, I don't know what you're putting inside this yogurt. I don't want to know, but I cannot keep it on the shelf.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

When he called me, that was the combination of three years of doubt, hard work, finding solution, being on the road, trying to figure out things, and all that kind of stuff, hassle. That call really summarized the whole thing for me.

[Guy Raz]

How is that possible, Hamdi? You got. How do you just put it on the shelves? The thing is that you put on the shelves and you still have to get people to notice it, because you go into a grocery store Today, there are 25, 30,000 products. How did people even know about was the cup?

[Hamdi Ulukaya]

It was just.

[Guy Raz]

It was just the label. It was bright. Yeah. It was just. It looked different.

[Hamdi Ulukaya]

Yeah. And then I priced it below my cost. At that time.

[Guy Raz]

You knew you were going to lose money.

[Hamdi Ulukaya]

Yes, I was okay to lose money for probably two months.

[Guy Raz]

Okay. And by the way, how many shop rights were you in? Like five, ten?

[Hamdi Ulukaya]

No, no, it's all of them. I think it was over 100. 120. Something like this. Yeah. You get into system wide. Yeah. But I had a simple napkin calculation. If I reach to 20,000 cases, I will break even. And everything after that, it would be, you know, profitable.

[Guy Raz]

And a case is how many cups of yogurt?

[Hamdi Ulukaya]

12.

[Guy Raz]

Okay.

[Hamdi Ulukaya]

Yeah.

[Guy Raz]

So you were taking a gamble that people would just find out about this as shoprites and buy it.

[Hamdi Ulukaya]

Exactly. And when he put it into an ordinary shelf, like a common shelf where everybody shop on yogurt aisle I received an order and it said 25,000 cases. And I'm looking at this order, and I'm Saying, Is this 25,000 or is it 2,500? I'm not sure. And I called Kyle. I said, is this accurate or is. They're missing 1 0? He says, no, that's accurate. And I said, is this for a month or. He says, no, that's for the week.

[Guy Raz]

Yeah. I'm wondering, Hamdi. I mean, this is the thing, right? It sounds great. You're selling all this yogurt, which is exciting, but then you have to actually fulfill those orders. Like, how are you actually able to make all that yogurt?

[Hamdi Ulukaya]

So that is so, you know, you say you get this all good news that he wants to cases the other 1,000 cases. And then you look at your blueprint, you look at available equipment and the volume, you look at all the limitations that you can think of, and they all cost money. Right. And how are you going to. How are you going to meet the demand?

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So you're converting, you know, cooler space into a filler room. We converting toilets into the offices. Whatever needs to be done outside of jeopardizing the quality of the food we're trying to find.

[Guy Raz]

I read that you were. You were like, every. People were like, sleeping in the factory because you. You literally had to fulfill these mass. Mass orders. And you just did not have, I mean, the people and the facilities to actually do it. Unless you just operate it 24 hours a day.

[Hamdi Ulukaya]

It is. I mean, you're talking about Thanksgiving, Christmas, Fourth of July, weekends. Anyone who has a minute to spare, they're back in the factory. And it's not even. I'm asking. They're doing it by themselves. You have to realize, guy, this is a plant that was the last factory that got closed. Right. So you have a large corporation closed and left. You know, they're looking at me and says, what are the chances? And then they see the orders are coming, and this is like, what the hell is going on? Like, is this ever possible that this could happen? So everyone went from complete disastrous mindset or soul set to exciting place where everyone gets so elevated. We were just high in a way.

[Guy Raz]

Right. And you were chain smoking just to get through the day.

[Hamdi Ulukaya]

Yeah. And I was taking Tylenol Advil like nuts. I was.

[Guy Raz]

You were not taking care of your health?

[Hamdi Ulukaya]

No, I was physically mess. Most of the nights. I'm sleeping on the floor on my office there. There is an office, I guess on chairs. We're eating pizza. Pizza Every day. I mean, it's pretty horrible lifestyle.

[Guy Raz]

All right, so you obviously, this thing is taking off, and then you start to get more accounts, and there's BJ's and then Costco. But you had to. I mean, now you really have to bring lots of people in. And one of the things that you did was there was, I guess, like this refugee resource center, like, in that part of upstate New York.

[Hamdi Ulukaya]

Yeah.

[Guy Raz]

And they had people who just needed work. And you were like, great, we need people to work. Tell me how you, like, connected with them.

[Hamdi Ulukaya]

So this is how it happened. Utica is about 30 minutes drive from where the plant is in South Edmonstone. And I lived in Utica.

[Guy Raz]

Utica, New York. Yep.

[Hamdi Ulukaya]

Yeah, I lived in an apartment in Utica. And I hear that people are settling in Utica as refugees from around the world, and they're having a hard time to find a job.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I called the refugee center and I said, what is the problem? And she said, these are people have a right to work legally settled, and they don't speak the language. They don't have, you know, transportation or people don't want to touch it because it's an unknown. And, you know, all the other social issues. I immediately said, we can solve these problems. I drive from Utica to plant every day. So why don't we get some box cars and buses that people can come with, and we will hire some translators and we will train them at the work, and we'll make this work. And people had concern and said, why are you sure you know how people are going to take this? I said, I'm pretty sure I know my people. And that was started very slow. And the people who started working there brought their brothers, their sisters. It became a community. And I never thought that was at refugee work. It was people in the community and an opportunity for them to participate as much as everybody else participated.

[Guy Raz]

So you have the people, right? And you've got this plant by 2010. So just in three years, you're doing $260 million in revenue. That's like, by my calculation, that's more than 150 million cups of yogurt that you're selling. How do you go from like, maybe hitting 200,000 to 150 million cups? How were you doing that?

[Hamdi Ulukaya]

Well, one of the best thing that I had is the price architect that I put in place. It was giving me enough profit to be able to invest back into the company.

[Guy Raz]

So you could finance the growth entirely through the sales of the yogurt. You could finance. Because making more yogurt means buying more milk, means buying more containers. Like, you got to pay for all that. And that is usually when a business goes out to investors or private equity, you know, to bring in a big chunk of cash to scale. You were able to do that just from the sale of the yogurt.

[Hamdi Ulukaya]

Exactly. And having a micro attention on the cost, keeping it extremely simple, you know, at that time, you know, not only 250 million until $600 million. I run that company on QuickBooks.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

And everything. Everything in Chobani was internally financed. We never had an outside investor.

[Guy Raz]

Right.

[Hamdi Ulukaya]

So I had over a billion in sales in five years. And making really, really good margins, good profit. Every penny. I had not even taken a penny from the company. I just put it back into the company and invest in equipment.

[Guy Raz]

Yeah, yeah. But here's a question, Hamdi, right? You're this guy from a village in rural Turkey, right. And it's a Kurdish village. You barely spoke English when you came to the U.S. all right, here you are now. Okay, So a couple things I'm assuming start to happen. First of all, the big brands, the Dan' ans of the world, start to see this and are like, we got to get into the Greek yogurt business. But the second thing that I imagine is you've got people coming up to you and saying, hey, Hamdi, you're going to get crushed by Dannon and you'll play the General mills soon. You got to bring in outside capital. You've got to blitz scale this thing. You've got to bring in a professional team to run it, because you are not equipped to do this. You don't have the experience. You're going to get crushed. And I have to imagine people are saying that to you.

[Hamdi Ulukaya]

They are. And I'm getting a lot of phone calls from private equity people, venture capitalists and all that kind of stuff. I'm getting calls from the ordinary banks. But this is the blessing I had. I was isolated in that small town upstate New York. I have no previous network of people in business. I don't know anyone. And I am kind of unreachable. I have no board, I have no advisor. I have no investors. And the people in the company is factory workers and salespeople and you know, that kind of stuff. So we are kind of from Mars, right?

[Guy Raz]

You just had your head down, just working all the time. You weren't.

[Hamdi Ulukaya]

And I don't even. I don't think it sinks at me that what I have just made it. I Don't even realize what it is until like you just touched it a little bit. That I realized that this is how it is. You built something. The big food is going to come with two things. One, do you want to sell? And in that is a hitting another information. If you don't sell, I'll make the same thing.

[Guy Raz]

Yeah, I'll crush you. I mean, big food companies must be coming to you and saying, look, sell to us, we can make this bigger. You'll make a lot of money. But if you don't do it, we'll just do it on our own. And you know, we've got massive marketing budgets, we've got a huge distribution network. Like, you're gonna be in trouble.

[Hamdi Ulukaya]

Yeah, yeah, that's very scary. And all this time I'm betting on they're gonna be very slow. And they were slow. So by the time they wake up, really, I was at 5, $600 million sales area.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

And they did come and they said, what about selling? And the numbers were with billions they were offering you.

[Guy Raz]

And you could have, just because you owned the company, it was yours. Yeah, it's great, great offer.

[Hamdi Ulukaya]

So now imagine this guy, you know, working in the factory 24 7, living in a one bedroom apartment in Utica that the bed hasn't been, you know, fixed.

[Guy Raz]

Maybe chain smoking, not taking care of herself, drinking a lot of coffee, eating pizza slices. Okay.

[Hamdi Ulukaya]

Exactly. And then somebody says, you can be a billionaire and I can't even spell billion. You know, really, literally, I didn't know how to spell billion. So now that's you yourself having this real moment. Right. No one can tell you what do.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

No one can stop you what to do. I have done no promise to anyone. I have no partners. It's just this thing is in front of me.

[Guy Raz]

So there must have been a pull to just do it. Take the plunge.

[Hamdi Ulukaya]

Hi. Imagine I am in upstate New York. I am mid-30s, right? Maybe at the time, I don't know, close to 40. And I have offered this huge amount of money. And yeah, there's endless what you can do with this money.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I said no to it. And I said no a few times. And why I was more excited about the journey these things was happening than the value was generating from it. And it felt like. Like I'm in this soccer game and in the middle of this soccer game and I love it. And I'm into this game in such a massive way and I'm completely elevated. First time in my life I feel like things are coming out of my being that I didn't even realize it existed. And I feel alive. Like the childhood I used to be is like. I'm wondering what is behind that mountain? What is behind that mountain. I have this enormous amount of curiosity, and I wasn't going to stop it for anything. That in the world, that desire to see where this was gonna go.

[Guy Raz]

Yeah. But you clearly had enough confidence that your brand at that point. I mean, because I think by 2011, you were the number three yogurt brand in the country after Joe playing Danon. But at that time, you knew that there was going to be an explosion of competitors.

[Hamdi Ulukaya]

Absolutely.

[Guy Raz]

And you weren't worried?

[Hamdi Ulukaya]

I was very worried. I was very worried. And when I said no to those things, I knew that I needed to build another factory out west to make more.

[Guy Raz]

Well, to produce more, obviously.

[Hamdi Ulukaya]

Yeah, to produce more and de risk it, you know, be in one location and bring more innovation to it. When people will copy the first thing I do, I would be on my way to the second thing. And third thing.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And I built the factory in Idaho, which I went to Idaho first time. I said, we need to build this factory really fast.

[Guy Raz]

This is a million square foot plant.

[Hamdi Ulukaya]

Yeah. Yeah, it's 1. I think now it's a 1.4. At that time, it was close to 1 million square feet plant. And with 14 lines, we built it less than one year. Wow. So that really. It was in a borderline stupidity. Meaning I underestimated how complex that was going to be. And I underestimated how crucial would that be on the health of the company if I was wrong and if I did something not right.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And one plant or one location or, you know, early companies, you know, journey is completely different than the second phase. And if you don't make that transformation, it's going to be extremely damaging. And it became almost. The problem with that is you do not know how to make separation with your people that you started with when the company grows.

[Guy Raz]

In other words, you had to basically get rid of some people and you. It's hard to do that when. Because they were the loyal people who helped you start it.

[Hamdi Ulukaya]

Exactly.

[Guy Raz]

But you had to make some changes.

[Hamdi Ulukaya]

Yeah, we made changes after we hit the wall. Right. We had a quality issue with mold.

[Guy Raz]

Well, this is in 2013, you guys. I think you had a recall which really was very damaging. Right. It was actually quite damaging for you because you don't use preservatives and you had some containers that got spoiled.

[Hamdi Ulukaya]

Yes. I will never forget that gentleman that came to our Plant in Idaho. He said, hamdi, this is mold. Mold is in the rooms, in the bread. It's everywhere. You know, you open the cup and you see green mold, and it's not nice.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And it was. It was a recall. And as you said, it was very damaging. But we came out, we fixed it, all the issues, and it took us three more years after that to get the bottom of the structural issues, like peoples and all that kind of stuff. But to my bone, to myself, I knew the investment in Idaho was the right thing. What I would question now is the way that I did it. Right. I would have been more prepared, and I would have done in stages. I wouldn't do it in as fast. I would be more cautious. I would put more team members in place and make some changes. Right.

[Guy Raz]

Because the. The mold issue came from that manufacturing plant in Idaho.

[Hamdi Ulukaya]

Exactly right. And there was a time that I will never forget, which is another moment that I will always go back to. You're about to file bankruptcy.

[Guy Raz]

You were about to file bankruptcy.

[Hamdi Ulukaya]

Exactly. I've never talked about this anywhere before.

[Guy Raz]

So that recall was that damaging? You'd gone from.

[Hamdi Ulukaya]

It wasn't that damaging. But what it is is the banks got really nervous and they wanted their loan to be paid back. And that loan was used to build a factory supported by ebitda. Now you have enormous amount of losses because of that factory.

[Guy Raz]

Yep. So the recall happens. All the loans get called in, and you've got to basically come up with a cash. And so you're thinking, we're done. We got to file bankruptcy.

[Hamdi Ulukaya]

Well, there's cash with. People want the world. They want so much from it. And the people who are showing interest, looking at your situation, and they start acting opportunistic.

[Guy Raz]

So they offer less money, they offer.

[Hamdi Ulukaya]

More money, but they want more.

[Guy Raz]

They want more equity.

[Hamdi Ulukaya]

Right, Exactly. And then they use different. Different reasons to come up with those things. A time came, and I remember the gentleman called me, and he said, here's the amount that you will get. Here is the percentage of the company that you have to give away, which is what was almost majority at the time, and you will be out of the company. And I take this. I said, okay, what will happen if I take this? I'll probably regret every day going forward. You are an entrepreneur. You build things and you make one misstep. And then someone comes with the money and say, hey, take it or leave it, or this is our conditions for you to do it. And I look at this and I say, I must say no to You. And I tell you why. Because if I'm gonna die, I'm gonna die now. I'm gonna die one time. I'm not gonna die every day, rest of my life. So I said, I'll take this company to bankruptcy.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

And he said, how do you go from the top of the mountain to bottom of a hole in. Within three to four months?

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

Right. And I'm not expecting that, accepting that. And I said, okay, it's fine. I built it. I'll bury it. And it's a very.

[Guy Raz]

I mean, you're very stubborn. Right. And I mean, that's a good quality, but it can also be. It can also be sometimes not a good quality.

[Hamdi Ulukaya]

Yeah. Ask my wife about that. Yeah. So she would say the same. You have a way. You have a way to make me say things that I've never said before. But I love that, this conversation because. Because we come close to making decisions like that that people normally don't know. It is hard that people make decisions.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

But I had no doubt at that moment. I remember walking from my apartment at the time I had an apartment in New York to an office where I was meeting one of my colleagues and a lawyer and a financial person. And next to the park, I cried. And I saw the tears coming because it's hard. It's hard that you are about to bury something that you give your best to and you built and the options were not good enough for you to be able to save it.

[Guy Raz]

Clearly, you didn't file for bankruptcy. You didn't. But how did you get out of that?

[Hamdi Ulukaya]

A night before, A night before.

[Guy Raz]

Wow.

[Hamdi Ulukaya]

Yeah. One night before we file, the banker called and said, hamdi, we hear that you're going to do this. It's going to make us look so bad. I think they were also acting really out of ordinary at that time, forcing me to do something. And he says, well, why don't we give you so much money and six months, as long as you promise you're going to do an event, that you're going to deleverage yourself in certain things. I said, yeah, sure. But I had no idea this was going to come. I knew this was a route that we were going to end up and this company was going to be a bankrupt and maybe wouldn't exist later on.

[Guy Raz]

Yeah. If you had filed bankruptcy, it doesn't necessarily mean that the brand would shut down. Right. I mean, you could restructure it, but it was unclear what would have happened.

[Hamdi Ulukaya]

I don't know. I mean. But the one thing is, how do you go become one of the fastest growing company in the history because we literally went from zero to billion in sales in five years without taking a penny from our side in that factory. And how do you go about this shouldn't have happened.

[Guy Raz]

It's a story that should never have happened. You should have been buried by the big yogurt makers within a year or two. Yeah, Hamdi, you know, I'm curious, because after that crisis in 2014, TPG, this private equity firm, comes in, makes an investment, and part of that agreement is that a man named Kevin Burns would become the interim president and coo. You were the CEO. You had founded this company from nothing. You built it from a cheese place in upstate New York into what it was. So the achievement at this point was enormous. Now, there was pressure for a new CEO to bring in a professional CEO. At the time, there was an article in the Wall Street Journal. I'm sure it was not easy for you to read, but it was critical of you. It said, he's in over his head. The operations are scattered, and blah, blah, blah, blah, blah. I'm sure that must have been difficult for you to read, but I also wonder whether a part of you was able to say, look, I've done this, I've made this. Maybe we should have a different CEO in here.

[Hamdi Ulukaya]

I think you come to a realization in a certain time and you say, okay, I'm good at certain things, but I'm not good at this. And this and this. I was very convinced that I knew how to start things, how to scale things, but not necessarily put the infrastructure in place to be able to run the company day in, day out without, you know, being involved in the floor every single day.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

So that I saw that value. And that's not because we were not growing. That's not because there was a lack of opportunity, all that kind of stuff, or I was tired or I didn't want to do it. I was questioning myself if I'm capable of taking this company from what it is to next level, because I had never done this before.

[Guy Raz]

Yeah. And you should be. And by the way, you should be asking yourself that question 100%. Yeah.

[Hamdi Ulukaya]

The problem with the CEO things is through this journey of my. From 2009 to 2011, I probably interviewed five, maybe six candidates for CEO. And every time I interviewed a person and I would see a dimension that would not fit Chobani. I would see a dimension that it would be risky. I would see a dimension that it would not be a good working relationship with Me, whatever that might be. I was extremely worried about the culture and what I want this company to be. Now it's coming to a place that business can be really, really powerful force. And it is not about money, it's not about this. But what is the role the company can play in social society? I can't say I had that state of mind in 2009, 2010, 2008. No, right, right.

[Guy Raz]

Because you, in the last sort of seven, seven, eight years, really very much publicly turned kind of made Chobani into a company that was, you know, big advocate of immigration reform, to hire, hiring refugees, you know, supporting refugee admissions into the United States, things like that. That are risky. Because a lot of companies don't want to, for understandable reasons, don't want to take stances on hot button issues because they just want to focus on their brand. Oftentimes that's a good decision. We just want people to buy Coke and Pepsi. Don't ask me what our politics are, but you decided we're going to actually stand for these things that lots of people in America aren't happy about. So why? I mean, it's risky.

[Hamdi Ulukaya]

I look at from the human perspective side of it. I said, why can't we do things that is good for the society and community? And yet I can prove the only reason Choban is extremely successful, if it is, is because of those angles. I didn't follow the craft route. I followed the kid from, you know, from Kurdish mountains. Belief mixed with the farmers in that community and say, you know what? What? Let's open the doors, let's open the windows, let's open the walls that people can come in and participate and be part of the success that you built. But never, ever in my statements, I have said something that I have not implemented into my own place for years and prove that this works before I have a credential to go out and talk about it.

[Guy Raz]

Yeah, Hamdi, there's so much we can talk about. And obviously we're not going to be able to get to everything in the story of Chobani today, roughly, chobani's got about 20, 22% of the yogurt market in the U.S. it's a massive company with lots of different brands. There's talk about eventually taking the company public, which may happen next year or maybe beyond. When you think about the story of this young guy who grew up helping his family there for their flock of sheep and goats, to how you kind of made it to the US and all those people in New York who brought you their farms and let you kind of live there and then you built a company that with a multi billion dollar valuation. How much of that do you think has to do with just how hard you worked in America and how much do you think has to do with how lucky you got?

[Hamdi Ulukaya]

I guess combination of all, I don't know. I sometimes pitch myself to see that this has really happened. I always say I brought a seed. Maybe it was loaded with a lot of tradition, love, you know, knowledge and whatever it is, but this land was a great soil for that seed to become something.

[Guy Raz]

Yeah.

[Hamdi Ulukaya]

And my I have three kids now, a girl and two boys and that's I feel like it's my biggest responsibility to make sure that the next generation, my children and the children's and children and everybody's children find the land the way that we found it and if anything it's improved. But I think it's in there. It's in under enormous amount of stress and we cannot take this as, you know, as like granted. We just have to make it work and we need to work harder to make sure that this stays alive.

[Guy Raz]

That's Hamdi Ulukaya, Founder and CEO of Chobani. About a year after we ran this interview, Chobani acquired the ready to drink coffee company La Colombe for $900 million and this year it bought the plant based frozen meal company Daily Harvest from for an undisclosed amount. Chobani also announced that it would be spending over a billion dollars to build a huge factory in Central New York, not far from where the company got its start 20 years ago. Hey, thanks so much for listening to the show this week. Please make sure to click the Follow button on your podcast app so you never miss a new episode of the show. And please sign up for my [e-mail] or on substack. This episode was produced by Josh Lash with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Alex Chung, JC Howard, Carla Estevez, Sam Paulson, Casey Herman, Kathryn Cipher, Kerry Thompson, Andrea Bruce, and Elaine Coates. I'm Guy Raz and you've been listening to How I Built this.

[Hamdi Ulukaya]

Foreign.

[Guy Raz]

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