The $700 Million Yogurt Startup

Nonfat Chobani is also the highest protein yogurt I've seen, and beats all the other yogurts in as far as nutrition is concerned.

hmmm makes me wanna try some, love my yogurt, im in OZ, wonder if they have any here or if i can get it from some specialty greek deli's ?!

At my local supermarket they sell 32oz cups of Chobani (in vanilla and plain). Because of the bulk, price per oz is only slightly more expensive than the cheapest stuff they have. And it's really nutritious: 16grams of protein and only 13 grams of sugar per 6 oz serving! Significantly more protein than sugar. The lack of fat doesn't bother me. There was an article in the Times (http://www.nytimes.com/2011/07/19/health/19brody.html?_r=1) about strong new research that found that yogurt was the food "most strongly linked to weight loss". It also found that the fat content of yogurt (or other dairy) consumed didn't affect weight change.

Based on this article and the research suggesting a weight-loss effect of yogurt I'm thinking about getting into the yogurt business.

Have you ever tasted unsweetened yogurt? Try it and you'll understand- especially the Greek kind.

Really, I'm not kidding. It's a major acquired taste, that 99% of America has not acquired.

I've spent weeks looking for a regular yogurth not loaded with sweeteners (doable) and thickeners (almost not findable).

As someone who is also from a part of the world which has "real" yogurt, I've also always thought American yogurt is horrible. But it never occurred to me there was a market for more expensive but good yogurt in the US! Ironically, I myself would be one of the buyers!

I guess the lesson here is trust hard data, not your assumptions.

There's also another New York yoghurt maker. Siggi's who makes Icelandic skyr. http://skyr.com/our_story.html

I'm a skyr convert --tho you have to get used to its texture.

It's about $2 per 5.3oz.

Next stop: coffee in USA.

Almost absolutely. We say technical co-founder, but it just means somebody who can build the main stuff. In this case it's creating the right yogurt formula. Somebody making a yogurt will probably go through more iterations than someone creating a web apps.

"If you're doing a yogurt startup, do you need a technical cofounder who is an expert in yogurt?"

It depends on the category, really.

In this case, it's not as if Chobani invented the concept of strained yogurt. Rather, it practiced the time-honored art of geographical arbitrage: it found a product that had a long history of use overseas (Greek-style yogurt), and introduced it to the US in rather auspicious and on-trend times (the low-carb, high-protein craze). That's more a feat of marketing and operations than one of technical prowess or product development.

I'm sure that there were "yogurt experts" on hand to oversee production, ensure the right consistency, flavor, etc. But it doesn't appear as if there were a "yogurt expert" co-founder in this case. I might be wrong.

That's not to say that product wasn't crucial in this case, because it almost certainly was. But I don't think a "yogurt expert" co-founder would have been absolutely necessary, or that a "yogurt expert" presently occupies one of the top executive spots at Chobani the way a product person would at a tech firm.

It sounds like Ulukaya is the technical founder:

"I came from a family of farmers who made cheese and yogurt..."

His dad was urging him to make cheese as early as 1998, and he did in fact start doing that a few years later.

I think the idea of technical and non-technical cofounders applies less to yogurt or restaurants than it does to most of the web startups discussed here. People can be passionate social networking, offering web analytics, and sharing photos without knowing anything about programming or having the skills needed to build these businesses.

I don't think many people decide to start selling yogurt because of a business opportunity. People that start yogurt companies are (hopefully) passionate about yogurt, and I would think they would have some experience in making their own yogurt. Starting a restaurant would be similar.

In summary, I think the main distinction is that the barrier of entry to programming (and engineering in general) is greater than that of making yogurt or cooking. There are many people passionate about computers and their applications that don't know anything about programming, but I would think there are far less people passionate about yogurt (and unhappy with the current offerings) that don't know anything about making yogurt.

They had originally pledged to only source their milk from New York state, but they've grown so big so quickly that they've literally bought every last drop of available NY milk. The farmers can't keep up. As a result, they're going to have to cross state lines soon.

From the small cheese manufactures I've seen it requires a long term love of the process and a resource, something like a family farm without a significant mortgage. The markup on artisan cheese seems pretty incredible.

Not a bad idea. But, I don't think there is great demand + a shortage of cheeses. Many grocery stores already have "gourmet" sections of "fancier" cheeses. If there was any increase in interest I would imagine they would be the ones detecting that, and jumping to capitalize on it. Some branches in metropolitan areas, do and have expanded those sections, for example.

For cultural reasons Americans simply don't seem to like cheeses that are not bagged, shredded and kept in the refrigerator. (American HNers might be surprised to find that a lot of cheeses are not meant to be kept in the refrigerator). Good cheese is like a living organism, it not something dead that needs to be kept cold. It has bacteria that lives on it and it alters and changes its taste. I believe you won't even be able to sell that in US simply because of local food safety laws -- cheeses have to be pasteurized to be sold here.

American Roquefort caves.

Looking at what I can get in supermarkets here in Italy, and seeing what's available when I visit back home in the states, I think there are huge opportunities in this space. I intend to investigate if we ever move back to the US.

This seems like a very poor idea if you are trying to pull off something on the order of Chobani.

The United States already produces over twice the amount of cheese of any other country. It seems to me that you are not from Wisconsin and I would guess not from any of the states where cheese is big. Try going to a supermarket in Vermont or New York...the market for imported cheeses would be quite small.

Another issue may be related to the FDA. It is my understanding that raw milk (unpasteurized) imparts a different flavor/texture to the cheese. I guess we have laws against cheese made with raw milk.

I am not a cheese maker, I've merely read this on food blogs.

I put stuff in my (homemade) greek yogurt, but mostly it's real stuff. Not corn syrup, food coloring and flavor that may have met a fruit at a party once.

That would require cannibalizing your own products, the definition of the innovator's dilema.

Companies that large already have dedicated tinker factories. In GM's case, they have tinker ... reservations.

http://en.wikipedia.org/wiki/General_Motors_Proving_Grounds

I think it's been featured on alot of cooking shows. They launched at the right time as demand was on the upswing and Greek yogurt was getting popular.

Last time I checked Chobani had enough sugar in them, they come with mixed-in fruit. I much prefer Fage total, I call it "real" as in full-fat yougurt, lowest carb/sugar of any other competing products, very high in protein too.

The nutritional content of Greek yogurt is definitely behind some of the craze. But those nutritional benefits aren't unique to Chobani; they're something that all of the Greek yogurts share. Chobani has somehow managed to grow faster than the rest of the sector. For instance, Chobani has crushed Fage, the incumbent market leader. Fage grew 58% last year... which sounds good. But in the Greek yogurt business if you're not growing 100%, you're not even maintaining your market share. Chobani grew 258% last year.

Possibly because it tastes good?

That is my reason for eating it.

I eat it regularly because I like yogurt and it tastes better than any other yogurts I know of. And it's healthy.

Yogurt has been my primary weekday breakfast for at least a decade, probably more. I recently switched to Chobani for one reason: Flavor. It tastes rich and creamy like it should be bad for you, but it's not (true of most Greek yogurt). With Chobani, the actual flavors are not just the typical yogurt ones (blueberry, strawberry, etc...) but also include things like pineapple and mango. Plus the packaging is familiar if you've been eating fruit on the bottom yogurt. there's not a little container off to the side to mix in. That sounds minor, but I don't want to rearrange my fridge because my yogurt needs more realestate.

Most American yogurt is pretty dreadful. When I did an exchange program in Germany in the 1990's, my host family fed me some Swiss yogurt. I'm sure it wasn't "Greek style" or "low-fat", but man it was some of the best yogurt I have ever had in my life. I have been trying various custard varieties ever since in an attempt to get that European style flavor, but all of them are poor imitations.

High-protein, low carb and delicious (creamy texture and flavor) at the same time. I alternate between Chobani, Fage and a couple other brands, but the nutritional profile is about the same for all of them.

I prefer to take my yogurt plain and mix in my own jams, rather than the fruit on the bottom variants. That gives me more variety than the default flavors provided and lets me control the amount that goes in.

In fact, this is very common in Greek. The Turkish word "dolma" means "something stuffed" and it is what they call stuffed grape leaves. Greeks have a very similar dish they call "dolmados". The Turkish word for shoe is "pabuç" whereas the Greek word is "papoútsi".

Also, it's true that yoğurt is of Turkic origin. If you go to Turkey, you will find it in almost all of their dishes. It's odd, though, that Americans don't seem to know anything about any of this. I'm nearly certain that if this Turk would have sold Chobani as "Turkish Yogurt", we wouldn't even know who he was...

Actually "chobani" has been maintained with minimal change in greek, "τσοπάνης": http://www.wordreference.com/gren/%CF%84%CF%83%CE%BF%CF%80%C...

For full reference, Çoban and Yoğurt, actually.

I think it will be interesting to watch. I also think there is value in being so specific in what they offer: they only make Greek yogurt. As a result, they don't have trouble branding themselves as "authentic".

Companies like Dannon who make all sorts of dairy products don't have this advantage.

Any similarly good brands in the UK?

Low fat is not synonymous with healthy.

Someone else made the comment that often "Low-Fat" advertised products are jammed with sweeteners or sodium to replace the lost flavor that fat provides.

I think it's funny that the American consumer has been indoctrinated into thinking "Low [Insert Nutrient of the Month]" == Healthy.

Or possibly it's just how he found out about this person/company. (That's not an "or possibly" as in "or you're an idiot, here's the solution", it's a genuine "or possibly".)