165 - The Dairy Empire Built on Junkmail | Chobani

Summary

Podcast Summary: Making It with Jon Davids - Episode 165: The Dairy Empire Built on Junkmail | Chobani

Release Date: January 21, 2025
Host: Jon Davids
Guest: Hamdi Ulukaya, Founder of Chobani

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Introduction: From Junk Mail to a Billion-Dollar Brand

The episode kicks off with Jon Davids introducing Hamdi Ulukaya, the visionary behind Chobani. Highlighting Ulukaya's journey, Davids emphasizes how a simple piece of junk mail led to the creation of a $2 billion dairy powerhouse.

Hamdi Ulukaya [00:00]: "This guy turned a neglected factory into a $2 billion foodie powerhouse."

John Davids [00:05]: "His name is Hamdi Ulukaya. He's the founder of Chobani."

The Humble Beginnings: Transitioning from Feta Cheese to Yogurt

Hamdi Ulukaya initially ran a feta cheese business, which was moderately successful but not thriving. The turning point came when he encountered a flyer advertising a yogurt plant for sale by Kraft.

John Davids [00:59]: "So the Chobani story starts all the way back in 2005."

Hamdi Ulukaya [01:12]: "The price tag is $1 million."

Recognizing the potential, Ulukaya decided to pivot from feta cheese to yogurt, leveraging his dairy expertise to explore new horizons.

Securing the Investment: Overcoming Financial Hurdles

Ulukaya faced the challenge of financing the purchase of the yogurt plant. With Kraft offering a $900,000 loan, he needed to source the remaining $100,000.

John Davids [01:35]: "But he decides he wants to buy it. Just one problem. He's gotta find a Milli. Guy needs a million bucks."

Through personal savings and support from friends and family, Ulukaya managed to gather the necessary funds, marking the beginning of his yogurt venture.

Hamdi Ulukaya [01:53]: "They'll chip in $900,000. He just has to scrounge up the rest."

Crafting the Perfect Recipe: Two Years in the Kitchen

With the factory secured, Ulukaya embarked on developing a Greek-style yogurt recipe that mirrored the authentic taste he grew up with in Turkey. This meticulous process took two demanding years.

Hamdi Ulukaya [02:11]: "Hamdi starts by formulating his recipe."

John Davids [02:27]: "The stuff is finally tasting good. Thick and creamy, just a little tangy."

The resulting product, named Chobani—derived from the Turkish word for "shepherd"—was poised to make a significant impact in the dairy aisle.

Strategic Go-to-Market: Packaging, Pricing, and Placement

Ulukaya made several critical decisions to ensure Chobani's success in a competitive market:

1. Mid-Pricing Strategy: Positioned Chobani between American and European yogurt brands, making it competitively priced yet premium.

2. Aisle Placement: Decided to stock Chobani alongside other mainstream yogurts rather than in the gourmet section, increasing visibility and accessibility.

3. Distinctive Packaging: Introduced a wider cup design that stood out on shelves, signaling differentiation.

Hamdi Ulukaya [02:39]: "Chobani will be stocked beside other yogurts, not in the gourmet section."

Hamdi Ulukaya [03:09]: "A wider cup, signaling that the stuff inside is different."

Rapid Growth: From Local Launch to National Success

Chobani debuted in a Long Island grocery store in 2007, selling out quickly and generating high demand. This swift success attracted major retailers like Shoprite, Kroger, and Whole Foods.

John Davids [03:23]: "Sells out fast, almost immediately. They can't keep it on the shelf."

By 2010, just three years after its launch, Chobani's sales surged to $100 million, confirming its position as a market leader.

Hamdi Ulukaya [03:48]: "Surge to $100 million."

Innovative Marketing: Building a Brand Without Traditional Advertising

Contrary to typical marketing strategies, Chobani refrained from substantial advertising expenditures until achieving over a billion dollars in sales. Instead, the brand focused on organic growth through community engagement and social media.

John Davids [04:06]: "Chobani didn't spend any serious money on marketing until sales were well past a billion dollars."

Key marketing initiatives included:

• Early Adoption of Social Media: Joined Instagram in 2011 and leveraged Facebook to build a robust online presence organically.

  Hamdi Ulukaya [04:27]: "They were very early adopters of social media."

• Engagement with Bloggers and Influencers: Initiated influencer marketing in 2014, long before it became mainstream.

  Hamdi Ulukaya [04:50]: "I entered the influencer business in 2014."

• Creating Myth and Magic: Developed compelling brand stories that resonated with consumers, fostering a loyal tribe both online and offline.

  Hamdi Ulukaya [05:01]: "They created myth and magic around the brand with strong stories."

Building a Customer Community: The Power of Organic Growth

Chobani's strategy centered around cultivating a vast customer community without heavy reliance on paid advertising. This approach included:

• Social Media Engagement: Active presence on platforms like Instagram and Facebook, engaging millions of followers organically.

• Content Creation: Utilizing podcasts, newsletters, and blogs to communicate brand values and connect with consumers.

• Influencer Partnerships: Collaborating with bloggers and influencers to amplify brand visibility.

John Davids [09:32]: "It's social media, it's podcasts, it's in-store sampling, it's events, it's influencer marketing."

Hamdi Ulukaya [09:56]: "I want to see you with a community of a million people from all over the world who care about your brand."

Lessons Learned: The Importance of Action and Adaptability

A recurring theme in the conversation is the significance of taking decisive action and being willing to pivot when necessary. Ulukaya's shift from feta cheese to yogurt exemplifies the need to adapt based on market demands and personal strengths.

John Davids [07:03]: "You've got to take action. You've got to start."

Hamdi Ulukaya [12:50]: "Don't look for logic. Don't look for rationale."

Davids shares parallels with other successful entrepreneurs, emphasizing that initial actions may not always yield immediate success but are crucial for learning and eventual triumph.

John Davids [07:22]: "The first action they take is not the winning action, right?"

Bootstrapping to Success: Building a Multi-Billion Dollar Brand

Chobani's remarkable growth story is a testament to Ulukaya's resourcefulness and determination. Starting with a modest investment of $100,000—sourced personally and through close networks—Chobani scaled to a multi-billion dollar enterprise.

Hamdi Ulukaya [13:56]: "A million dollars?"

John Davids [13:57]: "Only 100,000 of it was his. $100,000. 900,000 on loan from the government. This guy builds a multi-billion dollar business."

Conclusion: Embracing Creativity and Community for Sustainable Growth

The episode concludes by highlighting the critical role of creative thinking and community building in Chobani's success. Ulukaya's innovative approach to product development, marketing, and brand engagement serves as an inspiring blueprint for entrepreneurs aiming to build impactful and enduring businesses.

Hamdi Ulukaya [13:30]: "Don't strain."

John Davids [14:13]: "Let me know what you guys think."

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Key Takeaways:

1. Be Open to Pivoting: Transitioning from one product to another can unlock new opportunities.
2. Leverage Community Over Advertising: Building a loyal customer base through engagement can drive organic growth.
3. Strategic Pricing and Packaging: Thoughtful decisions in product positioning can make a significant market impact.
4. Take Decisive Action: Starting and adapting based on real-time feedback is crucial for entrepreneurial success.
5. Bootstrap When Possible: Limited resources can lead to innovative solutions and sustainable growth.

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For more insights and detailed strategies on building successful brands, subscribe to Making It with Jon Davids and explore related episodes.

Transcript

[Hamdi Ulukaya]

This guy turned a neglected factory into a $2 billion foodie powerhouse.

[John Davids]

And it all started with a piece of junk mail. His name is Hamdi Ulukaya. He's the founder of Chobani.

[Hamdi Ulukaya]

That's the yogurt brand bringing Greek style to the dairy aisle.

[John Davids]

And this business is so good, it's got me salivating. I'm going to tell you all about it today. So much you can learn. Welcome to the podcast. My name's John Davids, but my friends. You can call me JD From.

[Hamdi Ulukaya]

If you're a fan of this show.

[John Davids]

Make sure to subscribe and tell a friend of course.

[Hamdi Ulukaya]

Leave your comment on Spotify, Apple, and.

[John Davids]

Make sure to get my best stuff.

[Hamdi Ulukaya]

To your [e-mail] now let's talk about the $2 billion foodie powerhouse.

[John Davids]

You're listening to Making it with John David. So the Chobani story starts all the way back in 2005.

[Hamdi Ulukaya]

Hamdi's busy building his cheese business.

[John Davids]

He's got a feta cheese business and things are going okay, but not great.

[Hamdi Ulukaya]

And that's when he spots a flyer in the mail. There's this yogurt plant for sale close by.

[John Davids]

Kraft is actually selling it off. It's a hundred years old and it's for sale.

[Hamdi Ulukaya]

Now, he's already got a business, but.

[John Davids]

He kind of is curious and interested in what this is all about. So he goes ahead and keeps looking.

[Hamdi Ulukaya]

The price tag is $1 million.

[John Davids]

Now, Hamdi loves his yogurt and he.

[Hamdi Ulukaya]

Knows his way around dairy cause of the feta cheese business.

[John Davids]

So he decides he wants to buy it. Just one problem. He's gotta find a Milli. Guy needs a million bucks. Now, it turns out the government, Uncle Sam is happy to loan him the money.

[Hamdi Ulukaya]

They'll chip in $900,000. He just has to scrounge up the rest.

[John Davids]

So that's what he does. He digs and digs. He pulls from his savings. He goes to friends and family. He pulls together $100,000. He gets the factory. Kraft throws him the keys. And now it's time to make some yogurt. He's going to make his dairy dreams come true.

[Hamdi Ulukaya]

Hamdi starts by formulating his recipe.

[John Davids]

It's going to be Greek style, the kind he grew up eating in Turkey. He just needs to get that taste just right.

[Hamdi Ulukaya]

After two grueling years in the kitchen, that's how long it takes him to actually formulate this recipe.

[John Davids]

The stuff is finally tasting good. Thick and creamy, just a little tangy.

[Hamdi Ulukaya]

He calls this yogurt Chobani, which comes from the Turkish word for shepherd. And now he's got to break into the yogurt aisle.

[John Davids]

So let's talk about the go to market.

[Hamdi Ulukaya]

Our dairy man makes some key decisions early on. Number one, Chobani is going to be mid priced in between the American brands and the European brands.

[John Davids]

A little cheaper, a little more expensive. Chobani is going to be dead center. Number two, Chobani will be stocked beside.

[Hamdi Ulukaya]

Other yogurts, not in the gourmet section. That's where a lot of the early retailers and grocers would have thought to put it. Nuh. Hamdi wants it with the other yogurts.

[John Davids]

Number three, Chobani will be sold in.

[Hamdi Ulukaya]

A wider cup, signaling that the stuff inside is different.

[John Davids]

A very important packaging decision that stands out even today. So in 2007, this yogurt lands in.

[Hamdi Ulukaya]

A Long island grocery store and it.

[John Davids]

Sells out fast, almost immediately. They can't keep it on the shelf. Hamdi's hustling to keep the shelves stocked.

[Hamdi Ulukaya]

But it's not easy. Customers are scooping it up right, left and center. Indie grocers keep banging on his door.

[John Davids]

And then Shoprite calls next. Kroger wants it next.

[Hamdi Ulukaya]

Whole Foods wants it.

[John Davids]

By 2010, just three years later, sales.

[Hamdi Ulukaya]

Surge to $100 million.

[John Davids]

Chobani is a hit.

[Hamdi Ulukaya]

The only thing more delicious than the yogurt is the marketing.

[John Davids]

Now, I already told you about the packaging, the pricing, the placement, where he.

[Hamdi Ulukaya]

Put it in the grocery store, all.

[John Davids]

Genius moves, but there's actually a lot more to it.

[Hamdi Ulukaya]

Chobani didn't spend any serious money on marketing until sales were well past a billion dollars. That was a Super bowl ad they ran.

[John Davids]

I think that was in 2013. They hit a billion dollars before they.

[Hamdi Ulukaya]

Put any serious money into marketing and advertising.

[John Davids]

Instead, they leaned hard on their customer community.

[Hamdi Ulukaya]

They were very early adopters of social media.

[John Davids]

Chobani joined Instagram in 2011, just a.

[Hamdi Ulukaya]

Few months after the app launched.

[John Davids]

They pushed hard on Facebook, engaging with.

[Hamdi Ulukaya]

Local shoppers, gaining millions and millions of followers organically. They leaned hard into bloggers and influencers. Before it was cool.

[John Davids]

Again, we're talking about like 2007, 8, 9, right?

[Hamdi Ulukaya]

I entered the influencer business in 2014.

[John Davids]

And I was early to it.

[Hamdi Ulukaya]

I was super early.

[John Davids]

I can't even imagine what it was like for a brand doing it.

[Hamdi Ulukaya]

In 2009. They created myth and magic around the brand with strong stories.

[John Davids]

People could feel feel this yogurt was different. Hamdi built a tribe in real life and Online, dominating the yogurt aisle one creamy cup at a time. Quick break.

[Influicity Representative]

So I can tell you about Influicity. That's the little marketing agency I started in my apartment about 10 years ago.

[John Davids]

Well, fast forward.

[Influicity Representative]

It is not so little anymore. Influicity works with some of the biggest brands in the world, building customer communities that drive revenue. We do this through influencers, podcasts, paid media, social media content, AI and so much more. You can learn [e-mail] and hey, while you're there, check out our case studies.

[John Davids]

We have a lot of them.

[Influicity Representative]

That's influicity.com so I shared this story.

[John Davids]

On my LinkedIn, my TikTok, Facebook, Instagram.

[Hamdi Ulukaya]

Millions of you saw it.

[John Davids]

And I gotta tell you, for the most part, people really like Chobani. They like the brand. Some people were saying that it's not.

[Hamdi Ulukaya]

Greek, yogurt is Turkish, or it's not Turkish, it's Greek.

[John Davids]

I couldn't really tell. But it is marketed as a Greek yogurt. Some people even said that they remember.

[Hamdi Ulukaya]

That first grocery store in Long island.

[John Davids]

And they were some of the first shoppers. So kind of cool that people go.

[Hamdi Ulukaya]

All the way back to the beginning.

[John Davids]

Of this brand, which is now a mega blockbuster brand. So I gotta just call out the.

[Hamdi Ulukaya]

Creative thinking of Hamdi.

[John Davids]

I mean, every step of the way.

[Hamdi Ulukaya]

From spotting the factory with that piece.

[John Davids]

Of junk mail, to financing the factory, spending two years actually making the yogurt, getting it out there with the price.

[Hamdi Ulukaya]

Point and the packaging and the marketing.

[John Davids]

And all that kind of stuff.

[Hamdi Ulukaya]

Creative thinking as an entrepreneur, as anybody who's responsible for growth, revenue, growth, sales, growth.

[John Davids]

You know, I share stories about people who take action. Think about all the videos, all the podcasts I've done.

[Hamdi Ulukaya]

Isaac Oluafe, Todd Graves at Raising Cane's, Louisa Schneider at Rowan. You just gotta do it.

[John Davids]

These people move, they have ideas and they take action. And generally speaking, that first action they.

[Hamdi Ulukaya]

Take is not the winning action, right?

[John Davids]

Hamdist had a feta cheese factory before he had Chobani. Todd Graves was running a single store of Raising Canes before it turned into this big national chain. Isaac Oluafe was fiddling around as a real estate agent before he became a.

[Hamdi Ulukaya]

Multimillionaire real estate investor in his early 20s.

[John Davids]

You've got to take action. You've got to start. You got to understand that even if you're not seeing success right away, you're learning every single day. Think about all those failures you've had.

[Hamdi Ulukaya]

All the ads you've run that have flopped, all the business ideas you've started.

[John Davids]

You know, whatever you do, if you're a C suite executive, if you're an entrepreneur, you've got to take action. You can't be afraid.

[Hamdi Ulukaya]

And action leads to learning whether you win or fail.

[John Davids]

We can see that in so many stories. Chobani is a great example. And let's talk about some of the tactics that Hamdi used from a merchandising standpoint to signal that this stuff was different, to have you stand out. I mean, standing out on the grocery.

[Hamdi Ulukaya]

Store shelf is really, really hard, especially.

[John Davids]

Where the cold foods are in the.

[Hamdi Ulukaya]

Fridge and the frozen foods.

[John Davids]

Packaging, pricing, branding.

[Hamdi Ulukaya]

Think about how Hamdi used the intangibles.

[John Davids]

To signal so much about the brand. Now, I know that early on there was also a lot of sampling, but you have to imagine that customers are discovering this product.

[Hamdi Ulukaya]

Maybe they heard about it from a.

[John Davids]

Friend, but really, they're walking into the store, they're seeing it on the shelf.

[Hamdi Ulukaya]

How are you going to communicate to.

[John Davids]

Them right away that this stuff is different?

[Hamdi Ulukaya]

And you might do that via your.

[John Davids]

Website, via your ad copy, via your.

[Hamdi Ulukaya]

Newsletter, your social media, your podcast, whatever you're doing.

[John Davids]

It's so important to communicate to consumers right away, hey, we are different.

[Hamdi Ulukaya]

We are distinct. Here's what we are versus everybody else.

[John Davids]

When it came to pricing, Hamdi used that strategically. When it came to packaging, he used it brilliantly. Think about that. Just a wider cup, a wider lid. And I got to tell you, when I was researching the story and I read that point, I thought, oh, yeah.

[Hamdi Ulukaya]

It is wider than all the other yogurts.

[John Davids]

Why is that? It's like stumpy and wide. That was a conscious decision. And it signals.

[Hamdi Ulukaya]

The stuff inside is different.

[John Davids]

All those little signals add up to a big difference. And can we just talk about how.

[Hamdi Ulukaya]

Big this brand got with little to no advertising?

[John Davids]

I gotta tell you, I talk about this all the time. I talk to clients every day at Influicity, and we talk about customer communities and the power of a customer community.

[Hamdi Ulukaya]

What is it?

[John Davids]

It's social media, it's podcasts, it's in store sampling, it's events, it's influencer marketing.

[Hamdi Ulukaya]

It'S newsletters, it's blogging, it's SEO.

[John Davids]

It's all the stuff that you do to create gravity, to create force around your brand so that you just become.

[Hamdi Ulukaya]

Too hard to ignore.

[John Davids]

That's what a customer community is.

[Hamdi Ulukaya]

People hear me use the term community.

[John Davids]

Sometimes, and they think I use it.

[Hamdi Ulukaya]

In, like, some fuzzy Local feel good.

[John Davids]

Like, I'm not talking about that at all.

[Hamdi Ulukaya]

I want to see you with a.

[John Davids]

Community of a million people from all.

[Hamdi Ulukaya]

Over the world who care about your brand.

[John Davids]

That's what I'm talking about when I say customer community. And if you do it right, you can build a brand worth tens of.

[Hamdi Ulukaya]

Millions, hundreds of millions, billions of dollars. In the case of Hamdi and Chobani.

[John Davids]

You have to think about how you're using those assets to create a gravitational force around your brand. And I would think about it like that. Think about your brand as gravity.

[Hamdi Ulukaya]

And people who are walking by it or scrolling by it online or browsing.

[John Davids]

By it when they're doing searches just can't help but notice it because it's everywhere. Through quantity, through volume, and also through value. The stuff you're putting out there is worth something. And notice everything I'm talking about. Now, I'm not suggesting you spend a lot of money, you know, I don't.

[Hamdi Ulukaya]

Want any of you listening to this.

[John Davids]

Any marketing professionals out there saying, yeah, but John, everything you're saying costs money. No, it doesn't have to. It just has to be really good. And you've got to think about volume.

[Hamdi Ulukaya]

As well and layering on, so you've.

[John Davids]

Got a good podcast.

[Hamdi Ulukaya]

Great. What are you doing on social? What are you doing on search?

[John Davids]

How are you showing up where the customers care about you? Think about, again, think about Chobani.

[Hamdi Ulukaya]

What were they doing?

[John Davids]

They were having a presence in the retail store, they were doing sampling, they were early to Instagram, they were early to Facebook, they were early to influencers, early to bloggers. That's a lot of gravity being created.

[Hamdi Ulukaya]

Around the brand with not a lot.

[John Davids]

Of money being spent on marketing. And the last thing that really struck me about this story, and maybe it's the most important takeaway for anybody struggling right now to just find that perfect fit, that product market fit, or that product customer fit, or that customer market fit, or that founder market fit.

[Hamdi Ulukaya]

Wherever you are in your journey, certain.

[John Davids]

Businesses have a bigger TAM than others for no real reason. And when I say tam, I'm talking about total addressable market.

[Hamdi Ulukaya]

The total addressable market of Chobani yogurt was just really, really big when he started this company.

[John Davids]

It just had a lot of Runway.

[Hamdi Ulukaya]

A lot of room to grow, a lot of momentum, a lot of push, a lot of force, a lot of.

[John Davids]

Gravity behind it without explanation. Because we're talking about the same guy here who had a feta cheese factory and I'm sure was trying to do the same thing with feta cheese earlier, but for whatever reason, it wasn't working with feta, so he moved to yogurt. And the same thing happens in the story of Trader Joe's.

[Hamdi Ulukaya]

Think about Joe Coulomb, who had a convenience store, and that wasn't working, so.

[John Davids]

He went to Trader Joe's, changed the concept up. I've told you about that.

[Hamdi Ulukaya]

You can listen to that podcast, too. The whole idea here is to think.

[John Davids]

About what is it that you're really good at and what is it that customers really want. And I can't emphasize this enough. Don't look for logic.

[Hamdi Ulukaya]

Don't look for rationale. Don't spend days and months and years.

[John Davids]

Arguing with yourself and straining to figure.

[Hamdi Ulukaya]

Out, I don't understand.

[John Davids]

If I just do this a little longer, if I just do this a little more. When you find the right fit, it's like a puzzle. It's like a glove.

[Hamdi Ulukaya]

It just works.

[John Davids]

I've seen it happen over and over again. I've been the guy banging my head against the wall, saying, why can't I just get this right? And then I make that one pivot, that one change, and it's like, oof, it worked, right? From convenience store to Trader Joe's, from feta cheese to Chobani. I've done it myself. I've seen it. There are so many examples.

[Hamdi Ulukaya]

Don't strain.

[John Davids]

Don't waste years of your time trying to get something to work if it's just not cranking. You can see it here. Certain businesses work, certain businesses don't. There's no logic, there's no rationale. I don't have the time to spend on it. You got to go with what works. And by the way, guys, this is.

[Hamdi Ulukaya]

A story of serious bootstrapping.

[John Davids]

Let's not let that pass us by without noticing. Are you kidding me?

[Hamdi Ulukaya]

A million dollars?

[John Davids]

Only 100,000 of it was his. $100,000. 900,000 on loan from the government. This guy builds a multi billion dollar business. Wow. Crazy story of Chobani. Let me know what you guys think. Of course you can get me at johndavids. Com.

[Hamdi Ulukaya]

Get on that newsletter. I'll talk to you guys next time.