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

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."

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.

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