The Yogurt Company Growing as Fast as Google and Facebook

June 13, 2013 by  


By Patricia Sellers

Hamdi-Ulukaya-pan_17387
Hamdi Ulukaya

How do you get from zero to $1 billion in revenue in five years?

Google (GOOG) did it by organizing the world’s information.

Facebook (FB) did it by making the world more open and connected.

A hyper-growth trajectory, you might assume, requires a world-changing idea, brilliant programmers, and a Silicon Valley address.

Not necessarily. Hamdi Ulukaya borrowed $1 million to buy an 85-year-old factory in upstate New York, came up with a new recipe for an ancient product and took on Fortune 500 giants in a consumer category that most experts figured was locked up.

Five years after selling the first case of his Greek-style yogurt, Chobani, in October 2007, Ulukaya reached $1 billion in annual revenue. This kind of growth is unheard of, particularly for a startup, in the packaged-goods business—and rare in the tech world.

But Ulukaya has landed in the league of tech’s fastest-growing companies–and can claim something that Facebook founder Mark Zuckerberg and Google’s Sergey Brin and Larry Page cannot: He owns 100% of his startup.

On Saturday night in Monte Carlo, Ulukaya, 41, was named Ernst & Young’s World Entrepreneur of the Year, copping the grand prize in a competition that pitted him against 48 entrepreneurs whom E&Y designated tops  in their own countries. Ulukaya’s win was a surprise only because many of the 1,000 attendees at the professional services firms’ annual confab guessed that the judges—successful entrepreneurs from across the globe—wouldn’t bestow the top award on a U.S. founder. But Ulukaya, who emigrated from Turkey to America at 22, impressed the judges and everyone else with his up-from-nothing success story.

Over breakfast in Monte Carlo last Thursday, Ulukaya told me about growing up in a tiny village in eastern Turkey, working on his father’s dairy farm and moving to the U.S. hoping to learn English and go to business school. New York City’s hubbub overwhelmed him. So he moved upstate, took some classes at the Albany branch of the State University of New York, and started a wholesale feta cheese business called Euphrates.

Everything changed one day, a decade later, when Ulukaya opened a piece of mail that said: “Fully equipped yogurt factory for sale.” Defying the advice of cautious friends and advisers, he borrowed just over $1 million from the SBA and Key Bank (KEY) to buy the Breyer’s yogurt factory that plant Kraft Foods’ was shuttering. He recruited four workers from the plant and a “yogurt master” from Turkey and started work on creating the best-tasting, highest-quality yogurt.

Ulukaya has no serious business training, no corporate role models (“I never worked for anyone except my father.”) and no investors except for himself. So it’s natural that Chobani’s strategy is based on instinct—the founder-CEO’s. The organization is flat—”no layers,” Ulukaya says. He employs 3,000 people in New York State and Idaho and at a dairy he bought in Australia. His corporate motto: “Nothing but good.” From the start, Ulukaya has allocated 10% of Chobani’s after-tax profits to philanthropy. Chobani’s foundation is small but growing rapidly.

A billionaire at least on paper, Ulukaya says he longs to inspire other entrepreneurs to do some version of what he’s doing—that is, make real stuff in real America. “I want to help bring entrepreneurship back to small towns, or else wealth will be only on the coasts,” he says.

As for the glamorization of the tech and social-media crowd, he adds, “Who says you have to be a certain way to be a cool entrepreneur?”

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