Chobani: Yoghurt To Feed The World's Tired And Huddled Masses

PURPOSE OVER PROFIT

Chobani: Yoghurt To Feed The World's Tired And Huddled Masses

Turk Hamdi Ulukaya dishes out Greek yoghurt that is all the rage in the United States. Arriving in the land of milk and honey where he has made his pile, the Chobani brand is now associated with humanitarian welfare, with special emphasis on the plight of the refugees.

Hamdi Ulukaya arrived in the United States from Turkey in 1994 with only USD 3,000 in his pocket, and spoke no English. Today, he is a billionaire, running America’s top-selling yoghurt brand: Chobani.

His journey embodies the classic American immigrant success story; from a young boy who grew up on a sheep farm in the mountains of Eastern Turkey, to becoming a business icon in a new country that offered him not just refuge, but opportunity too. 

Hamdi studied political science at Ankara University and became an activist. He published a political newspaper, took part in demonstrations but it was his leaning towards towards the Kurdish-rights movements got the attention of the Turk police. One day, Hamdi got hauled in for questioning despite never causing or inciting any kind of trouble.

It was then he decided to leave Turkey. 

In the US, he started a small business making cheese; at the same time learning English. One day, in late fall 2004, Hamdi stumbled upon an advertisement – it was for a fully equipped yoghurt plant in upstate New York that was up for sale at $700,000.

He decided to buy the plant despite not having any prior experience in running a business.

I had no idea what to do in the beginning. I wasn’t too shy to say I don’t know. What’s important is what you are going to do to learn and master these things

With little money he had from the cheese business, Hamdi managed to get a loan from the Small Business Administration and bought the plant in 2005.

“Kraft was closing the yoghurt plant. I wanted to buy it, and it didn’t make sense to many people. My lawyer said: 'If the plant was (worth) anything, they wouldn’t have closed it'. But I trusted my instinct."

“When I first got the keys, the first thing we did is to paint the plant. I had no idea what to do in the beginning. I wasn’t too shy to say I don’t know. What’s important is what you are going to do to learn and master these things,” says Hamdi.

He developed a yoghurt recipe inspired by his heritage, growing up in a dairy-farming family. Soon, he turned the modest start-up into a yoghurt powerhouse.

Chobani was an instant success when it hit the shelves. Today, it pulls in more than USD1.5 billion in revenue annually. Based on The Statistics Portal, Chobani is among the leader is US's Greek yoghurt industry in 2016, valued at approximately USD3.7 billion - beating key competitors such as Danone and General Mills.

Hamdi's business expanded rapidly. Chobani's workforce, which began with only five employees in 2007, has grown to about 2,000 people today. He has since added manufacturing facilities in Twin Falls, Idaho. 

In my view, it is not the shareholder-first. It is the workers first! You have to make sure that their wages are well, the environment is friendly, and their families can be taken care of.

Among many things, Hamdi is well known for creating a purposeful and socially-impact driven culture in his company called ‘The Chobani Way’.

This includes paying workers in his factories over twice the minimum wage; he also runs an equity sharing program in which employees collectively own 10 percent of the business.

“In my view, it is not shareholders first. It is the workers first! You have to make sure that their wages are well, the environment is friendly, and their families can be taken care of.”

“People take pride and ownership in the brand and their work - when they have an equity stake,” says Hamdi.

In April this year, during a TED Talk Conference in Vancouver, Canada, Hamdi says the CEO playbook (which is basically the idea that a CEO should maximise profits for the purpose of benefitting shareholders) practised for decades is broken.

He believes that it is time, and more crucial than ever, for leaders to practice the ‘anti-CEO’ playbook’ - whereby leaders uphold the values community, responsibility, gratitude and accountability - over profits. 

“Don’t just look at financial reports and decide to close a factory. Try and understand beyond financial studies or spreadsheets. Try to understand the human side of things and what it means."

“We often hear companies going to communities asking for tax exemptions, or for resources. Don’t go to communities and ask what they can give you. Instead, go to communities and ask what you can do for them. This is one of the key (aspects) in this anti-CEO playbook."

“Many CEOs today say; ‘I’m responsible to make profits, my responsibility is to my shareholders’ - that’s not a good idea.”

“I think a good idea is that you should be responsible to your stakeholders first. They are your community, your people, your consumers,” says Hamdi.

What is the anti-CEO playbook by Chobani's Hamdi Ulukaya

Hamdi does not stop at only giving a generous wages, profit sharing and creating a purpose-centric culture in his company, he advocates for the rights of refugees through the Tent Partnerships for Refugees programme.

“We started the tent programme in 2016. It’s about bringing the business communities to create solutions to critical human issues we are facing today.”

“These people (refugees) are like you and me, but they lost everything. They were forced to leave, they are stuck, they can’t go back. But they can’t go forward because there are so many limitations.

“It is our responsibility to help them move forward and let them be human again. We have no other option but to remove  the obstacles to allow our brothers and sisters to get back to life,” says Hamdi.

To date, Tent Partnership has over 100 members, including companies such as MasterCard, Unilever, Starbucks, Western Union, LinkedIn that have provided support for nearly 200,000 refugees across 34 countries.

In 2017, Hamdi was named by US-based Time magazine 100 Most Influential People.

“Hamdi Ulukaya puts the xenophobes to shame. At a time when some accuse immigrants of stealing jobs, the Chobani CEO—a Kurd born in Turkey who moved to the U.S. in 1994—is creating them, big time,” writes Kenneth Roth, Executive Director of Human Rights Watch.

Chobani's Hamdi Ulukaya - Advocate for the Rights of Refugees

Recently, Hamdi made a trip to Malaysia to participate in a discussion alongside Permatang Pauh Member of Parliament Nurul Izzah Anwar on refugees’ right to work and the economic benefits that host countries are likely to see as a result of including refugees in the workforce.

He tweeted: “Hiring refugees will change your business for the better, refugees work hard, think outside the box and make your workforce richer in experience, talent and passion.”

Thirty percent of Hamdi’s employees in Chobani currently are refugees, from over 20 different countries.

“I am from Turkey, and one of the best things that Turkey has done is letting nearly four million refugees come into the country; not only care for them but also allow them to work and go to schools and access to government infrastructures like the hospitals.

“You can see the economic impact in Turkey. Now you can ask; ‘What will happen if you don’t do it?” asks Hamdi.

Research by think tank Institute for Democracy and Economic Affairs (IDEAS) finds that granting refugees in Malaysia the right to work would have positive impacts on both economy and public finances.

It’s in our culture, in our religion to be good human beings. If you don’t let them be a part of the society, are you going to force them to go back? What’s going to happen? There’s going to be more grief, more challenges and more separation.

The report: “The Economic Impact of Granting Refugees in Malaysia the Right To Work” estimates if the refugees were given the right to work, they would contribute over RM3 billion to Gross Domestic Product (GDP) by 2024 through higher spending.

“It’s in our culture, in our religion to be good human beings. If you don’t let them be a part of the society, are you going to force them to go back? What’s going to happen? There’s going to be more grief, more challenges and more separation.

“There is magic when integration happens. So, I hope countries like Malaysia will allow refugees the right to work and build a life for themselves and their children so that they may contribute back to the society. That is a beautiful thing to do, in my opinion,” says Hamdi.

As we end the interview, Hamdi shares that the name of his brand ‘Chobani’ means ‘shepherd’, and after spending over 10 years perfecting his Greek yoghurt, he admits he does have a secret recipe but won’t be sharing that recipe anytime soon.

“I don't even tell my mother (the recipe), I am not going to tell you!” says Hamdi with a laugh.

“But if you come to New York, I might show you some!” he adds with a smile.

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