Once upon a time there was a shepherd boy, a Kurd living in Turkey. His family owned live stock and made feta cheese and Greek yogurt which they sold to support themselves. It was a semi-nomadic life, moving the cows between Summer and Winter pastures. Our shepherd boy doesn’t know his exact birthday as he was born while the family was on the move to warm weather mountain pastures.
His family and he himself were well aware of Turkish oppression of the Kurds. So when he was old enough his father suggested he go to study and learn to speak English in America.
Our shepherd, Hamdi Ulukaya came to the U.S. in 1994, studied English and took a few business courses as well. He first attended Adelphi College on Long Island and then transferred to the State University of New York in upstate Albany.
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. The venture was modestly successful but by the two-year mark it had just barely broken even.
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 (105 km) west of his feta cheese factory. The 84-year-old factory had been closed by Kraft Foods. Although he initially threw the flier away, Ulukaya toured the plant the following day and decided to buy it.
“On the drive home I called my attorney, who is my main business adviser. I told him I wanted to buy the factory. He thought it was a terrible idea. He had three good arguments: First, because I’d be buying it “as is,” I really had no idea how well it would function. Second, Kraft is a pretty successful company, and if it was giving up on this facility, this town, and the yogurt industry, maybe it knew something I didn’t. Third, and maybe the strongest objection, where was I going to get that kind of money? He was right: At that point, I had nowhere near enough money for such a big purchase.”
Enter a couple of bankers who pointed him to the Small Business Administration. Our shepherd quickly wrote a business plan, put down 10%, personally guaranteed the obligation and voila, Ulukaya owned a yogurt plant that Kraft didn’t want anymore.
“The factory was a sad place, sort of like a cemetery, in a very small town. Fifty-five employees were preparing to shut it down. A lot of equipment was included, but it was old. The best thing about the place was the price: less than $1 million. Some of the individual machines would cost more than that if purchased new.”
He immediately hired a master yogurt maker from Turkey, and spent the next two years perfecting his recipe. He hired four employees who’d worked at the Kraft plant, and because they had nothing to produce, kept them busy repainting and repairing the factory for a few months.
By 2007 he was ready to go to market with a new brand of yogurt; he named it Chobani, Turkish for “shepherd.” It was a crucial part of the business plan that Chobani be sold in mainstream supermarkets, in the dairy aisle as opposed to the gourmet foods area; no boutique specialty stores. And it had a different European container – not tall and thin like watery, sugary American yogurt of the time but in a flat, wide container making it stand out and letting the customer know this product was different from the yogurt they were used to buying.
“Often when a start-up launches a product, there’s an agonizing wait to see if customers will buy it. We didn’t have that problem. Within a couple of weeks after Chobani got into ShopRite, we started getting orders for 5,000 cases. The first time we received one, I kept double-checking to make sure it didn’t say 500. It quickly became clear that our biggest challenge wasn’t going to be selling enough yogurt—it was going to be making enough yogurt.”
Today the company produces millions of cases of yogurt a week in it’s New York and Idaho plants and the business is still growing. More importantly, Chobani pays employees above the minimum wage and offers full-time employees health benefits and other benefits. Early on, Mr. Ulukaya established a 401(k) plan for employees and pushed them to participate. Chobani also offers paid maternity AND paternity leave.
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.” The Chobani yogurt plant in Twin Falls, Idaho is the largest in the world and pays its workers in the area on average twice the minimum wage
“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”
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.”
Chobani has gone out of it’s way to hire refugees from centers close by his plants. He has donated $2 million to the U.N. High Commission to help refugees and visited the island of Lesbos to see for himself the refugee situation.
Giving away millions to his employees
Having built a company now worth billions, the shepherd announced last year that his 2,000 employees would be given an ownership stake that could make some of them millionaires. He gave 10% of his personal shares to his employees, based on their length of tenure with the company. The average share award was valued at $150,000.
“I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all these people.”
The shares given to Chobani employees are coming directly from Mr. Ulukaya. The shares can be sold if or when the company goes public or is bought by another business. Employees can hang onto the shares if they leave or retire, or the company will buy them back. Nice.
This sort of transfer of shares to employees is rare in the food industry.
Technology start-ups often pay employees partly in shares to help recruit them or to compete in a company’s early days for in-demand workers. Early employees of Google and Facebook became overnight multimillionaires thanks to such compensation.
But unlike many of those tech companies, Mr. Ulukaya is giving his employees a piece of the company after its value has been firmly established. He KNEW how much he was giving away. It wasn’t just paper that might be worth something someday.
Classic American immigrant success story right? Well not to our right wing and Trump supporters. You see, Chobani has about 300 refugees working in its Idaho plant as well as a number of refugees it hired out of a refugee center in the vicinity of its upstate New York facility.
Visiting a refugee center in Hamburg, Germany
Mr. Ulukaya and the company have been taunted with racist epithets on Twitter and Facebook. Fringe websites have published false stories claiming Mr. Ulukaya wants “to drown the United States in Muslims.” And the mayor of Twin Falls has received death threats, partly as a result of his support for Chobani. Breitbart and Steve Bannon (who ran the Trump campaign and is now in the White House) joined in the attacks.
Alex Jones, he of Infowars fame, targeted Chobani when, last summer, three children assaulted a 5-year-old girl. The story spread through right-wing media that the attackers — 14, 10 and 7 — were from refugee families. The false narrative pushed by Jones included the involvement of Syrians, rape and urinating in the victim’s mouth. Jones linked it — along with some unrelated cases of tuberculosis — to Chobani.
All of it was untrue.
Chobani sued Jones and Infowars for defamation – and won. The key component of the settlement agreement required him to retract inflammatory comments about refugees and the company he made and apologize on his Infowars website.
It marks another blow to Jones, who previously apologized and issued a retraction to a Washington, D.C.-based pizzeria for his broadcast’s role in pushing a false story about a child sex ring that involved Hillary Clinton. He has also characterized the Sandy Hook massacre as a conspiracy, saying it was all faked.
“You just ran into a Texan,” Jones had said. “So you get ready because we’re never backing down and our audience is never backing down.”
Until Jones did. Again.
Worst thing they can imagine. A Muslim immigrant who has made jobs in small town America and actually treats his employees like human beings.
Buy Chobani. It’s really good!! I had one this morning!
And happy Fourth!! And especially to you Mr. Ulukaya!