The situation is slightly different than the stock programs at other Capital Region companies such as Price Chopper and Stewart's Shops, which have employee stock ownership plans, or ESOPs, that hold company stock in a retirement account for employees with special tax benefits. It's difficult to know the exact terms of the Chobani stock grants, and how they are awarded, since the company has not explained the exact method they will be distributed. It did promise to provide shares to employees when the company was sold or went public.
The ownership stake in the yogurt company could make some of the 2, full-time employees into millionaires. Top shopping picks. To buy the yogurt factory, I obtained a bank loan backed by the U. Small Business Administration. The loan was sufficient to create a small amount of working capital in addition to the purchase price. The process took about five months, and on August 17, , I had the keys to the factory. I immediately hired a master yogurt maker from Turkey, and we spent the next two years perfecting our recipe.
In addition to fine-tuning our own recipe, we worked hard to get the packaging right. American yogurt has always been sold in containers with relatively narrow openings. By late we were ready to go to market. At that point we made several crucial decisions that allowed us to finance our growth once the business took off. First, we insisted that Chobani be sold in mainstream grocery stores rather than specialty stores, and that it be stocked in the dairy aisle, alongside existing yogurt brands, rather than in the gourmet or natural food aisles.
Although many Americans had never heard of Greek yogurt until Chobani launched, at least one rival brand had been selling Greek yogurt in specialty stores since the mids. But because it had limited distribution, it remained a tiny niche product. We wanted Chobani to be accessible to everyone. Insisting that Chobani be stocked in the dairy aisle—rather than the gourmet section—is probably the single most important decision we made.
Second, we negotiated with retailers over their slotting fees. So we negotiated to pay off the slotting fees over time as the yogurt sold. Third, I worked really hard to determine the right unit selling price to fund future growth. I spent a lot of time figuring out our cup costs, ingredient costs, and labor costs, and I made a simple model to calculate the exact price that would allow us to break even once we hit 20, cases a week in sales. A lot of new companies would have launched at a lower price and tried to raise the price later.
I avoided that by figuring out an initial price that made long-term sense. Within a couple of weeks after Chobani got into ShopRite, we started getting orders for 5, cases. Over the next 18 months we found ways to increase the capacity of our factory without making big investments. Eventually we retrofitted our filling machine—the big constraint on our plant—so that it could handle , cases a week.
We also limited our capital investment by relying on manual labor instead of automation: For instance, the finished cups of yogurt were hand-packed in cartons. During that time I rarely left the factory—I slept there most nights.
We were extremely careful with cash. Too many start-ups hire people in anticipation of growth; we waited until the business was bigger. Every Friday I met with our finance guy. I made sure that our employees and our milk suppliers were paid on time, but we let a lot of other bills go a little longer.
Because we had set up the business to be profitable early, every cup of yogurt we sold gave us more free cash. Our model had other advantages: Yogurt is perishable, which limits inventories; and supermarkets pay us promptly after delivery, whereas most of our suppliers give us a month or two to pay.
That really helped our cash flow. A few months after our first sale, I began getting calls from potential investors. In early we attended a convention in Anaheim called Expo West, where natural products manufacturers meet buyers from big retail chains. Most of them said we would need much more cash if we really wanted to grow. This was all new to me. Our employees represent the communities where we live.
They champion our culture of respect, diversity, equity, and inclusion. For information on all our products, please visit our Chobani Care page at care. Our Mission Chobani is a food maker with a mission of making high-quality and nutritious food accessible to more people, while elevating our communities and making the world a healthier place. Making Good Food For All In support of this mission, we are a values-driven, people-first, food-and-wellness-focused company, and have been since Hamdi Ulukaya, an immigrant to the U.
Once upon a time there was a shepherd In , Hamdi took a loan from the Small Business Administration, bought an old yogurt plant, and brought a small group of passionate individuals together to make the real, wholesome yogurt that he remembered from his childhood.
Perfecting our craft For the next two years, Hamdi devoted himself to the craft, carefully building his team to ensure quality from the ground up. Beyond yogurt In , Chobani started unveiling a series of innovations in four new categories beyond yogurt: oatmilk, dairy and plant-based coffee creamers, ready-to-drink cold brew coffee and plant-based probiotic drinks.
Meet Our Management Team. Our culture.
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