Chobani creates culture of principles, community

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Hamdi Ulukaya has been painting walls — and not just those of his original upstate New York Greek yogurt plant.
Ulukaya, founder, chairman and CEO of Chobani, sat down with Terry J. Lundgren, executive chairman of Macy’s Inc., for “The Chobani Way: Hamdi Ulukaya’s Principled Journey in Building an Empire” during NRF 2018. There, he wove a story of community, investment and creativity as rich and thick as any of his company’s goods.

Growing up on a dairy farm in Eastern Turkey, Ulukaya had no thoughts of his current trajectory — or even of living in the United States. Interested in public service, he frowned on the pervasiveness of capitalism. But a friend convinced him to continue his studies in the States regardless; he arrived in 2014, speaking no English.

A teacher gave him a writing assignment, and he responded with a piece on how to make cheese. “She said, ‘I have a farm in upstate New York. Come, and we will make cheese together,’” he recalled. “I saw her farm, and the area reminded me of home. Wow, it was so beautiful. I decided to stay.” His family has made cheese for generations, he said, so when his father came for a visit, he suggested Ulukaya make cheese here, too. “I said, ‘I didn’t travel thousands of miles, however far it is from Turkey, to do exactly what I was doing there.’” But, wise man that his father was, that’s exactly what Ulukaya did.

In 2005, he learned of a yogurt factory closing down, and decided to buy it. The fact that Kraft Foods was shutting the doors, even though it had been there for almost 100 years, didn’t deter Ulukaya at all; it simply was cheap. He hired five of the previous 55 employees, and at the first board meeting, one of them asked what they’d do next.

“I said, ‘We are going to Ace Hardware. We are going to buy some paint, white, blue and red, and paint the walls outside.’” It was the only idea he had to move things forward, and to this day, he said, “when we have any ideas at Chobani, we say, ‘Let’s start painting those walls.’”

Over time, the ideas came, and the company has flourished. Thanks to Ulukaya’s vision, Chobani launched in 2007; within a handful of years, it had $1 billion in sales. Chobani has helped Greek yogurt grow from 0.5 percent of the market to more than 50 percent, and to receive placement in grocery stores as a dairy staple rather than specialty item.

“It wasn’t that Americans didn’t want to eat real or better yogurt before,” he said. “It just wasn’t available.”

Ulukaya, who had never worked for anyone other than his father before starting the business, “disliked the business field growing up. I thought it was too selfish, taking advantage of others.” Working shoulder-to-shoulder with his employees, however, he learned to do business on his terms. He decided early on to give 10 percent back to the community. The community wanted a Little League field, so they built one better than the famed one in nearby Cooperstown, N.Y.

With manufacturing and its jobs moving out, residents of the area felt like they had been forgotten, he said.
“But what I’ve found is the most amazing community I’ve ever seen,” he said. He knows “zero” about baseball, and the first time he threw one was for the opening pitch. “But that was the beginning of Chobani and the company culture there.”

More recently, Ulukaya informed his 2,000 employees that they each would receive shares in the company if it goes public or is sold; the stake to be divided is about 10 percent of the company. Some longtime employees, it’s been reported, stand to receive seven-figure stakes.

Speaking of employees, Chobani workers now represent 19 nations and speak 16 languages; 30 percent of the population is refugees, and the two communities Chobani inhabits — that in upstate New York, as well as Twin Falls, Idaho — have unemployment levels below the national average. Chobani also has an incubator program, through which it helps other companies with finances, guidance and resources.

Crazy? Perhaps. But no crazier than a former anti-capitalist immigrant buying a closed-down plant.

Culture, Ulukaya said, is not what’s written on a company’s walls. It is, instead, “the stories within the walls” that dictate what kind of company it is. “Instead of coming up with this breakthrough idea of how you’re going to change people’s behavior, just act,” he said. “Let it add up.”

See a video from Ulukaya’s session at NRF 2018 here. For more from NRF 2018: Retail’s Big Show, visit the official recap.
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