Welcome to those receiving this newsletter for the first time. I started this project because I wanted to highlight interesting stories of immigrants who are making extraordinary impact in their adopted countries. I hope you will find the stories as interesting as I have.
Outsiders Rising: Hamdi Ulukaya
Photo Credit: Forbes Magazine
Hamdi Ulukaya (born 26 October 1972) is a Turkish businessman, activist, and philanthropist of Kurdish descent based in the United States. His family owned and operated a sheep, goat, and dairy farm near the Euphrates River in Turkey where they made cheese and yogurt. The family often led a seasonally semi-nomadic existence tending and herding their flocks. (Interesting fact: even though Ulukaya’s birthday is listed as October 26, he is uncertain of his exact birth date because he was born during one of the family's mountain treks).
Ulukaya is the owner, founder, chairman, and chief executive officer of Chobani (founded in 2005) - the top selling strained yogurt brand in the US. Chobani recently filed to list as a public company (with a valuation of around US$10 billion) on the NASDAQ stock exchange so I thought now would be a good time to profile its founder.
Ulukaya immigrated as a young man to the U.S. in 1994 and arrived unable to speak any English. In an interview with CNN Money, Ulukaya said that he was very serious about Kurdish rights and left Turkey due to the oppression of Kurdish minorities by the Turkish state. In his first few years in New York he studied English and then took some business courses.
In 2002, his father visited him in New York and commented about the poor quality of cheese available. When his father suggested he start manufacturing cheese he told him he had not come to America to sell cheese. He eventually started a business manufacturing cheese but it did not take off as he’d hoped.
Founding Chobani
In the spring of 2005, Ulukaya came across 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. The 84-year-old factory had been closed down by Kraft Foods. He initially threw the flier away until something told him to find it. The day Ulukaya toured the plant he immediately decided to buy it, against the advice of his attorney and business advisor.
He bought the plant for $700,000 and financed the purchase with a loan from the Small Business Administration plus local business-incentive grants. The loan required him to make a ten percent down payment and provide personal guarantees. When asked later why he went against the advice of those around him his response was “I go with my gut feelings a lot.”
Ulukaya decided to make an alternative to American-style yogurt. He preferred the yogurt he grew up on in Turkey. He brought over a yogurt master from Turkey with whom he spent nearly two years formulating and perfecting his own yogurt recipe. Using different bacterial cultures at various temperatures and fermentation durations, they tested hundreds of recipes to come up with a yogurt with the desired taste, texture, and natural shelf life. Strained yogurt is thicker, creamier, and tangier, with a higher protein content because 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 road trip to pick up the separator, the name "Chobani" – a variation on çoban, the Turkish word for shepherd – popped into his head.
In October 2007, he shipped his first order of Chobani, a few hundred cases, to a grocer on Long Island, NY.
Ulukaya utilized guerilla sales and marketing strategies to overcome his capital limitations. Rather than pay stores a slotting fee, which his start-up company could not afford, he paid stores in yogurt to stock his product. Where that arrangement didn’t work, he negotiated to pay off the slotting fees over time as the yogurt sold. He also implemented in-store samples so customers could taste the product and make purchase decisions on the spot. Lacking the budget for traditional marketing, Ulukaya also had his small team reach out to bloggers, Facebook, and Twitter to have constant and direct communication with consumers.
In 2010 he introduced 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. In its first year, the sample truck gave away 150,000 full-size containers of Chobani.
After big retailers like Costco began carrying Chobani in 2009, the company doubled its sales every year through 2013. 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. In mid 2012, he initiated an $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.
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, in December 2012 the company opened the world's largest yogurt factory in Twin Falls, Idaho through a $450 million investment. By 2012 Chobani had more than $1 billion in annual sales and theirs was now the leading global yogurt brand. Ulukaya became a billionaire around that time.
Business Philosophy
Ulukaya has stated that higher wages for employees lead to greater corporate success. Not only does he promote the position that companies can succeed when they pay their workers more, he believes they 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.”
In an interview with Ernst and Young Global CEO, Ulukaya said that business people 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.
When Ulukaya opened his second yogurt manufacturing plant in Twin Falls, Idaho, he created a job training program together with the College of Southern Idaho and the Chobani 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.
A New York Times article in March 2017 highlighted Ulukaya's efforts to work with Idaho colleges to offer technical training for workers to solve the area's labor shortage. The Chobani yogurt plant in Twin Falls is the largest in the world and pays its workers in the area on average twice the minimum wage.
Philanthropy
In 2014 Ulukaya pledged to donate $2 million to the United Nations High Commissioner for Refugees. He has also donated to many Muslim charities associated with Iraq and Syria and has explored philanthropic avenues for helping refugees around the world. He has signed The Giving Pledge, the philanthropic initiative led by Bill Gates - pledging to give away the vast majority of his wealth to causes that make the world better.
Ulukaya visited the Greek island of Lesbos in September 2015 to see first-hand the situation of the mostly Syrian refugees there. On his return he launched the Tent Foundation to help 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.
Conclusion
I have enjoyed learning about Hamdi Ulukaya while writing this week’s newsletter. His story weaves beautifully the worlds of business and philanthropy (especially towards refugees and asylum seekers) - two worlds I am very passionate about on a personal and professional level.
That’s the brief story of Hamdi Ulukaya. A true rising outsider.
Until next time… ✌🏾
Munatsi
Twitter: @Munatsi_
Twitter: @OutsiderRising
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