Hamdi Ulukaya

Hamdi Ulukaya
Born (1972-10-26) October 26, 1972 [1]
İliç, Erzincan, Turkey
Citizenship Turkish[2]
Alma mater University of Albany
Ankara University
Occupation Entrepreneur, businessman
Known for Chobani, Founder & CEO
Net worth Increase US$2 billion (March 2016) [3]

Hamdi Ulukaya (born October 26, 1972) is a Kurdish[4][5][6] businessman living in the United States.[2][7][8][9] Ulukaya is the owner, founder, Chairman, and CEO of Chobani, the #1-selling strained yogurt (Greek-style) brand in the United States. On April 26, 2016, Ulukaya announced to his employees that he would be giving them 10% of the shares in Chobani.

Originating from a dairy-farming[10][11][12] family in a small village in Turkey, Ulukaya came to the U.S. in 1994 to study English and took a few business courses as well. He started a modest feta-cheese factory in 2002 on the advice of his father.

His larger success came from taking a major risk: Ulukaya purchased a large, defunct yogurt factory in upstate New York in 2005, in a region that used to be the center of a dairy and cheese industry. With no prior experience in the yogurt business, he has created a yogurt empire, Chobani, with facilities in several states. It was valued at over $1 billion in annual sales in less than five years after launch, becoming the leading yogurt brand in the U.S. by 2011.[13][14][15] The popularity of his Greek-style yogurt also sparked the rise in Greek yogurt's market share in the U.S. from less than 1% in 2007 to more than 50% in 2013.[13] Ernst & Young named Ulukaya the World Entrepreneur of the Year in 2013.[16] The success of his yogurt empire has made Ulukaya a billionaire and developed new employment in several regions. According to Forbes, his net worth as of 2016 is $1.92 billion.[17]

Early life, education, and early career

Hamdi Ulukaya was born in 1972 to a Kurdish[18] family in Turkey. His family owned and operated a sheep, goat, and dairy farm near the Euphrates River in Ilic, Erzincan Province, where they made cheese and yogurt.[19][20][21] The family often led a seasonally semi-nomadic existence tending and herding their flocks. Ulukaya is uncertain of his exact birth date because he was born during one of the family's mountain treks.[21]

After studying political science at Ankara University, in 1994 Ulukaya moved to the United States to study English at Adelphi University on Long Island, New York.[22] In 1997 he moved upstate and transferred to the University at Albany, State University of New York where he enrolled in a few business courses.[22][23]

He ended up taking a job on an upstate farm. During a visit, his father persuaded Ulukaya to import the family's feta cheese from Turkey, after tasting the inferior cheese available locally. When the imported cheese proved popular, Ulukaya opened a small wholesale feta cheese plant of his own, called Euphrates, in Johnstown, New York in 2002.[21][23][24] The venture was modestly successful but by the two-year mark it had just barely broken even.[25] Ulukaya later recalled, "It was two years of the most challenging days of my life."[23]

Chobani

Inception and development

In the spring of 2005, Ulukaya noticed a piece of junk mail advertising a fully equipped yogurt factory for sale in South Edmeston, New York, 65 miles west of his feta cheese factory.[25] The 84-year-old factory had been closed by Kraft Foods.[25][26] Although he initially threw the flier away,[26] Ulukaya toured the plant the following day and decided to buy it, against the advice of his attorney and business advisor.[24] Ulukaya financed the purchase within five months with a loan from the Small Business Administration, plus local business-incentive grants.[21][24][27] He initially named his new company Agro Farma, and hired a handful of the former Kraft employees.[23][27] As a first task they painted and repaired the neglected factory.

Ulukaya decided to make an alternative to American-style yogurt, which he believed was too sugary, watery, and artificial. He preferred the thick, strained yogurt (often called Greek yogurt in the US), which he grew up with in Turkey.[25] His aim was to create a high-quality, tasty, natural, and affordable strained yogurt for the U.S. market. He brought over a yogurt master from Turkey, Mustafa Dogan, with whom he spent nearly two years developing and perfecting his own yogurt recipe.[24] Using different bacterial cultures at differing temperatures and fermentation durations, they tested hundreds of recipes to come up with a yogurt with the desired taste, texture, and natural shelf life.[26]

Strained, or "Greek" yogurt as it is called in the U.S., is much thicker, creamier, and tangier, with a higher protein content, as the whey is strained out. To manufacture strained yogurt, Ulukaya needed a million-dollar commercial machine called a milk separator, which the American-style Kraft factory did not have. He found a used one in Wisconsin and negotiated to buy it for $50,000. On his trip to pick up the separator, the name "Chobani" – a variation on çoban, the Turkish word for shepherd – popped into his head.[21][26]

Ulukaya made Chobani yogurt without preservatives, artificial flavors, artificial colors, or gelatin, and used only milk from cows not treated with growth hormones.[21][24][28] Since he could not afford advertising, he invested time and money on the product's packaging, using a distinctive new bowl-style shape to differentiate the brand,[24][25] and ensuring its design and bright coloring stood out from other yogurts.[26] The first line-up of Chobani flavors included plain, vanilla, strawberry, peach, and blueberry.[21]

Launch

Ulukaya wanted Chobani to be affordable to the average consumer. Rather than marketing to small specialty stores, he aimed the yogurt at the regular dairy sections of mainstream grocery stores and national chains, thus aiding the product's rapid growth and adoption by consumers.[23][25][29]

In October 2007, he shipped his first order of Chobani, a few hundred cases, to a grocer on Long Island. The store repeated the order the following week.[19][26]

Ulukaya's early business approach included strategies the larger companies did not use. Rather than pay stores a slotting fee, which his start-up company could not afford, he paid stores in yogurt rather than in cash to stock his wares. He also negotiated to pay off the slotting fees over time as the yogurt sold.[25][30] He also implemented in-store samples so customers could taste the product and purchase it immediately.[31] Lacking the budget for traditional marketing, after hearing customers phoning in to say that they loved Chobani, Ulukaya had his small team reach out to bloggers, Facebook, and Twitter to have constant and direct communication with consumers.[32] In 2010 he also created a sampling truck, the CHOmobile, which handed out free cups of Chobani yogurt at festivals, parades, and other family-friendly events all over the U.S.[27][33][34] In its first year, the sample truck gave away 150,000 full-size containers of Chobani.[32]

In 2009, the chain stores Stop & Shop and ShopRite began carrying Chobani,[35] and by the middle of 2009, Chobani was selling 200,000 cases a week.[26] Later that same year, a major breakthrough came when the warehouse club stores BJ's Wholesale Club and Costco began carrying the brand.[23][29]

Expansion

After BJ's and Costco began carrying Chobani in 2009, the company doubled its sales every year through 2013.[36] With an eye on Australian and Asian markets, in 2011 Ulukaya acquired Melbourne dairy producer Bead Foods, and began manufacturing and selling Chobani in Australia.[32][37] In mid 2012, he initiated a $88.5 million expansion for the company, acquiring 100 acres next to its upstate New York facility and building an 80,000-square-foot addition. The expansion was partially funded by $1.5 million in New York State grants for economic development.[38][39]

Since strained or Greek yogurt uses three times the amount of milk per cup that unstrained yogurt does, to keep up with Chobani's ever-increasing market, and demands for higher and higher quantities of milk, in December 2012 the company opened the world's largest yogurt factory in Twin Falls, Idaho, a $450 million investment.[40] In 2012 Chobani had more than $1 billion in annual sales,[41][42] and in 2012 it became the world's leading yogurt brand.[13] Ulukaya joined the world's billionaires in the early 2010s.[17]

Ulukaya began adding new product lines to his brand in 2010, beginning with Chobani Champions, a Greek yogurt designed for children. In 2013 he added the Chobani Bite, a small-size yogurt with flavors including chocolate; Chobani Flip, yogurt with a separate section of toppings; and Chobani Simply 100, marketed as the first and only 100-calorie Greek yogurt made with only natural ingredients.[43] In 2014 he launched Chobani Oats, a blend of Greek yogurt, steel-cut oats and fruit; Seasonal varieties, including watermelon and pink grapefruit; Chobani Indulgent, a healthy dessert yogurt; and a 4%-fat plain Greek yogurt marketed as particularly good for cooking and baking.[44]

In 2012, he opened Chobani SoHo, a retail yogurt cafe in Manhattan's trendy SoHo district.[21] The cafe offers various exotic and gourmet dishes using flavors of fresh Chobani yogurt and gourmet toppings, as well as sandwiches, soups, and coffee.[45][46][47]

Following the success of its product in Australia, in 2014 Chobani expanded its distribution to Asia and Latin America, beginning with Singapore, Malaysia, and Panama. The company announced plans for the Caribbean as well.[48] In April 2014, Chobani reached a deal with private-equity firm TPG for a $750-million investment, which funded the company's expansion and the launch of a new line of products.[49]

In March 2016, Chobani announced that it will be incrementally investing almost $100 million into the Greek yogurt plants it has in Twin Falls, Idaho. In 2015 the Twin Falls plant employed more than 1,000 people, almost 100 of whom were hired in the last half of 2015. Chobani planned to add a global research and development facility for the Twin Falls scientific team, plus office expansions and an employee cafeteria. In the summer of 2016, they planned to start production of a yogurt-based dip and drinkable yogurt in the Twin Falls factory.[50]

La Colombe Coffee Roasters

Hamdi Ulukaya drinking coffee.
Hamdi Ulukaya drinking coffee.

In mid-2015 Ulukaya became the majority investor in La Colombe Coffee Roasters, a brand of coffee competing in the relatively new high-end coffee market. After opening Chobani SoHo Café, he tried dozens of coffees before he decided on La Colombe Coffee Roasters for his café. Ulukaya said that he will not have any management role at La Colombe, nor participate in the board.[51]

Business philosophy

Ulukaya has stated that higher wages for employees leads to greater corporate success. Not only does he promote the position that companies can succeed when they pay their workers more, they also have a moral obligation to do so, stating that, "…for the sake of our communities and our people, we need to give other companies the ability to create a better life for more people."[52]

In an interview with Ernst and Young Global Chairman & CEO Mark A. Weinberger, Ulukaya said that businessmen should promote a sense of purpose in their corporate culture to create a climate of positive change in business and the world. He stated that companies should focus on humanity and not just on their bottom lines. "Business is still the strongest, most effective way to change the world," Ulukaya told Weinberger.[53]

In a forum hosted by the Wall Street Journal, Ulukaya joined other key business leaders in a discussion on "Misconceptions People Have About US Manufacturing." He stated that "Manufacturing can rebuild the modern American economy."[54]

When Ulukaya opened his second yogurt manufacturing plant in Twin Falls, Idaho, he put his beliefs into practice. He created a job training program together with the College of Southern Idaho and the Chobani Foundation (formerly known as Shepherd's Gift Foundation.) He has also worked to improve the community in Twin Falls by supporting the Southern Idaho Children's Learning Center, Twin Falls Rapids Soccer Club, and other community programs.[55]

Philanthropy

In 2014 Ulukaya pledged to donate $2 million to the United Nations High Commissioner for Refugees. He wanted to provide immediate relief for those being persecuted in Iraq and Syria and to explore philanthropic avenues for helping refugees around the world.[56]

Hamdi Ulukaya meeting refugees

In May 2015 Ulukaya announced that he will donate a majority of his wealth to help refugees around the world.[57] The donation will be made under the auspices of The Giving Pledge, started by philanthropists Warren Buffett and Bill Gates. The Giving Pledge encourages billionaires to donate at least half of their wealth, either during their lifetimes or in their wills.[56]

Ulukaya visited the Greek island of Lesbos in September 2015 to see first-hand the situation of the mostly Syrian refugees there.[58] In 2015 he launched the Tent Foundation to help refugees.[59] Ulukaya said that he would like to see more companies and entrepreneurs engaged in helping refugees by providing more innovative solutions to solving the crisis, using their expertise to help refugees, and asking companies to hire refugees. At Chobani's plants in Upstate New York and Idaho, Ulukaya has long hired refugees from around the world from regions across Asia, Africa and the Middle East.[58]

In 2015, Ulukaya attended the World Economic Forum in Davos, Switzerland, and launched several new initiatives to help refugees while also encouraging world and business leaders to do more.[60][61]

On September 29, 2015 Ulukaya spoke at the Clinton Global Initiative in New York. He urged business people to do more than "just write checks" to help alleviate the suffering of the displaced.[62]

In October, 2015, Ulukaya was honored with a humanitarian award by the American Turkish Society (ATS) for his personal work in helping to relieve the suffering of Syrian refugees.[63][64] He was given the award both for his donation of $2 million for refugees who fled their country as a result of violence, and for signing the Giving Pledge Act to donate the majority of his fortune to contribute to resolving the global refugee crisis.[65]

In November 2015, Ulukaya was honored by the Children's Aid Society with their Corporate Leadership Award.[66] He was honored in recognition of his passion and his commitment to lasting change in the lives of those in need around the world.[67]

In 2016, Ulukaya was invited to join the Special Olympics International Board of Directors.[68] He is part of the volunteer Board of Directors which determines international policy along with other business leaders, sport leaders, professional athletes, educators and others.[69]

Influence and advisorships

Ulukaya has been noted both for his entrepreneurial skills and also his commitment to making affordable and nutritious foods using only natural ingredients.[70] In addition to receiving awards for entrepreneurship, in April 2014 he was named by President Barack Obama as an inaugural member of the Presidential Ambassadors for Global Entrepreneurship (PAGE) initiative – 11 selected business leaders who will encourage entrepreneurship in the U.S. and abroad.[71][72][73] Also in 2014, the Culinary Institute of America honored him with its Leadership Award (Augie Award) in the Health and Wellness category.[74]

Ulukaya was a member of the Upstate Regional Advisory Board of the Federal Reserve Bank of New York,[75][76] and he is a Vice Chair of the corporate fund board of the Kennedy Center for the Performing Arts.[77] He is n the board of the Pathfinder Village (Community for Down Syndrome) Foundation in Edmeston, New York[78] and The American Turkish Society in New York City.[79]

He has delivered commencement addresses at institutions including the Culinary Institute of America,[80][81] the Sage Colleges,[82] and the University at Albany in New York,[83][84] and has received honorary doctorate degrees from Colgate University,[22] the Sage Colleges,[85] and the University at Albany.[83][86]

From establishing Chobani, Ulukaya has given 10% of his company's net profits to charitable causes, and to individuals and organizations working toward positive long-lasting change.[87][88] In 2010 he established the company's charitable arm, the Chobani Shepherd's Gift Foundation, now called the Chobani Foundation, to manage this philanthropy.[88][89][90][91] Donations have included major grants to support famine relief efforts in Somalia,[89] and to underwrite the New York City Pianos project launched by Sing for Hope.[92][93]

Hamdi Ulukaya pledged to donate most of his wealth, at the time of the pledge at least 700 million dollars, to help the Kurdish refugees, as well as refugees from all around the world.[94]

Honors

Ulukaya's success and entrepreneurship has garnered him numerous awards, honors, and superlatives. These include:

Personal life

Ulukaya lives in New Berlin, New York, not far from Chobani's South Edmeston factory and headquarters.[104] He was briefly married in the late 1990s to New York City doctor Ayşe Giray.[105]

Ulukaya has additional offices in Manhattan and Twin Falls, Idaho.[106][107] His pastimes when he is not working include sailing, traveling, and spending time with his two German shepherds.

References

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