Chobani: Hamdi Ulukaya - Transcripts

November 14, 2022

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As a newly arrived immigrant from Turkey, Hamdi Ulukaya learned to be resourceful, determined, and even stubborn when he needed to be. All those traits would serve him well as he began to navigate the hairpin turns of building a yogurt business from the ground up. In 2005, Hamdi was running a small feta cheese business in upstate New York when he happened upon a piece of junk mail that would change his life: an ad for an abandoned yogurt factory...$700K, as is. He knew if he could get his hands on it, he could bring a new kind of dairy product to the U.S.—the thick, creamy yogurt he’d grown up eating in the mountains of Turkey. With the help of a local bank, Hamdi bought the factory, and sales grew so quickly that he could barely keep up. A few years later, some bad business decisions nearly pushed the company into bankruptcy, but today, Chobani is one of the most popular yogurt brands in the U.S; and Greek-style yogurt has become a staple of the dairy aisle.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

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I used to get really upset but I see your blood on the lips

on the lady didn't hesitate on that you wanted to be so perfectly smooth in the Cup that they'll they wouldn't touch the lit

yes I would open a Cup and if I see a good on the lead that was a bad day

you were totally obsessed with it as you should be because you're you're trying to make a product that's so good that it's gonna knock people out the first time I tried

exactly I have no legs should be off I wish I had done that I wish I had done that this is one shot if it's not successful I'm out

welcome to how I built this show about innovators entrepreneurs idealists and the stories behind the movements they built I'm guy rising on the show today how do you look high and arrived in the U. S. with no money and no plan but in a band and yogurt factory built Shabbat one of the top selling yogurt brands in the U. S. a few years ago I interviewed Eric Ryan on the shelf Eric is the co founder of math itself and one of the ways he came up with the idea for what would be combat that was by simply wandering the aisles of supermarkets he walked up and down the aisle and just look at the products any ask themselves two questions which category is ripe for disruption and do hi Eric Ryan have the ability to make that disruptive product he soon landed on natural and eco friendly dish so and with his co founder Adam Lowry they started to make soap in their kitchen I felt that there was room for a beautifully designed and packaged hand soap that could compete alongside the usual suspects and he turned out of course to be right now there are lots of examples like this stories we've told on the show like dogfish head beer or away luggage or Angie's boom chicka pop all of these brands Sohn opportunity to offer up a better experience within an existing category of products now if you were to walk up and down the yogurt aisle in American supermarkets in the nineteen eighties or even the early nineties your options were pretty slim you'd see Dannon Yoplait and supermarket brands and what we now call Greek yogurt was almost nowhere to be found and mainly in small specialty stores which is kind of crazy because today Greek style yogurt accounts for fifty percent of the entire eight billion dollar yogurt market in the US that's roughly four billion dollars of Greek yogurt sold each year in America alone in the Brandon most responsible for its rice chapati buddies founder Hyundai all chi at is from Turkey but Greek is the term Americans used to describe yogurt that has most of the water strained out of it so it's the current creamier than other kinds it's the type of yogurt that Hamdi when he was growing up in a remote part of eastern Turkey and when he emigrated to the US in the mid nineteen nineties he had no intention of turning this thick creamy yogurt of childhood into a billion dollar brand and the story of how Han became to do exactly that is one of the most improbable and yet inevitable stories we've ever told on the shelf improbable because he barely had any money when he got here he spoke almost no English he had no background in business he'd grown up in an isolated community of shepherds and farmers but that is one of the things that makes his success well almost inevitable because those shepherds and farmers they knew everything there was to know about cheese and yogurt and from an early age how do you learn how to make it himself he also learned how to be incredibly resourceful and as it turns out incredibly determined even stubborn when he had to be he wouldn't need those traits to navigate the many hairpin turns he encountered well building Chobani starting with a feta cheese business that almost drove him into the ground how do you look I grew up in the nineteen seventies and eighties near a tiny town in the Kurdish region of eastern Turkey he lived in the mountains with his family in a semi nomadic community

the nomads really isolated from the everyday life

yeah

we kind of need your kind of people like from Mars really we would come to town and buy out flowers and sugars and whatever it is and then the second we have done we had a lot of horses and and meals and get up in the mountains right so we don't get involved with anything

yeah

and the only thing that he has exposed to stories outside of that little town and the mountains is the people come back from the big cities whether for military service that they have done or they travel for this reason of setting the cheese or boss some grains and they will come up with stories and what they saw but viewed reliever very much isolated from the reality of life's

and from what I it from what I've read your dad had a quite a successful cheese making business right in town

yeah so he was aga so I got means the he's the leader of the tribe and my father's kind of didn't want to follow that tradition but he was kind of naturally there now because you're our guy you don't have other things like you know we didn't have bicycles for example we don't have toys we ate the same thing we we had the same conditions we live under the same tasks so it doesn't make it too much difference in life but what it did is you had a reputation people will trust you they will value your opinion and usually you will buy all the other people's shoes cheese and you combine them and you would my father would take it to the big cities and sell them

right

so you could do that a little bit of business out of it but nothing major like it was I would say a small business

you know it's interesting because when you hear like semi nomadic you think I think people think like the steps of Asia worked or too bad or something but but I mean you you you were when you grew up when you were a boy like you you were more or less you know what I mean you had everything you needed from what I understand right

absolutely yeah

yes she weren't living like in a dark room sleeping on the ground

no no no we had that you know this in life I don't think we call ourself tour we never this we never considered us of poor you know we consider ourselves lucky

M. M. and you had like a television refrigerators and and you know ovens and right I mean

they they're yeah and all that yeah when it arrived to town the with a force to be able to buy TV's individually those I remember my mom anything she got the first time the washing machine it was just fascinated B. B. one moment watch it how it does

you know gather around yeah yeah

the footings it was and

you know

very rich life but it was yeah it was decent life absolutely

M. you did go off to college from what I understand Andriy inverse city

yes

and from what I gather from what I understand you were you were a student there during a particularly volatile time in Turkey especially for

for

for people like you for ethnic Kurds and in you became a bit of a of a political activist at the time you you're I guess even involved with some left wing and and socialist groups which I guess made you feel like like Turkey at the time wasn't the right place for you to live in and so you decided to leave the country

yeah exactly I thought okay I'll go to Europe just because everybody else did at that time and I had a passport luckily so I was thinking like I would go to France that will go to Germany or somewhere around Europe and I was talking to my friend a stranger who actually this strange as a person when I helped my brother in his stories he would come every evening around five to six o'clock this guy with a glass used looking guy you know maybe in his fifties he would come in by small things like eggs and tomatoes and some meat and all that kind of stuff

yeah

that guy heard me saying to my friend that I'm going to go to Europe he just said don't be stupid go to America and I remember telling him why would I ever go to a capitalist imperialists in a country that has done all these bad that's right because it the light language he said getting Europe is good to go to America and if you don't like it you can always go to UT or Europe so I dismissed them I said get your axing me then go to your place and I'll see you tomorrow that night I couldn't sleep I I talked about but that guy said now I had no knowledge of America other than what I saw in movies and TV

yeah

so I waited that day the next day until that guy showed up and I put it aside and I said tell me more how do you know America how do you go to America what can you tell me more about it turns out that he studied in the US and he knew a lady in the center of a career that had an agency that would send students to universities across the country for learning English and he gave me his hers hers have numbers and this is go to this person go to school try to learn some language if you like the look that into like their way of living you can stay in folders study and if you don't you can go whatever you want to go

sick you basically came to the U. S. under this on this program to learn English to study at and you and where did you where did you land or did you arrive to

so I go to this lady and she said okay so you want to go learn English I said yes and she says well do you want to go in America I said I don't know so she opened this map and she was telling me and I'd remember like yesterday I have school in Boston I have a school in Delaware I have school in New York and she was going on I said okay stop New York New York is good and that she opened up another map this is where in New York I have few schools in New York and that was the first time I realized New York is not a city it's a state right so she had a school in Albany she had a school in Manhattan and I remember saying that you know those big buildings in a big town big city not in there but not too far from that either so she said okay I got you and two weeks later I had received the acceptance form end this whole thing happened within a month N. I went back to my hometown but I grow up and my mom was there and I spent a week there with my mother and probably one of the hardest good bye of my life my mom was all night she couldn't go up in the mountains anymore that it's this is the time where you start seeing snow up in the summits of the mountains and Anna and you know this is the time that the families are coming back N. and I drop to the hospital where she needs to have a check up in in in in the town and we hug and and and I said goodbye and I had a nephew and I was taking him to uncle to his for his dad and then and I was driving this is the one of the few times that I started to learn to drive and I was driving from town to Ankara and when I'd left I saw my mother on the rear Miro and that picture I remember always alive and she's having that motherly walk on the streets towards the hospital and my my my my nephew tells me uncle why are you crying and I say I'm not crying it's raining and it was raining you know from the window that was made last good bye to life of tried my last goodbye to my town all the all the life that I had in those mountains the tribes the shepherds all the conflicts of the university everything that was designed to go on for me in that life I just go back to that moment and that's good bye and within two weeks I was I was in New Jersey that was the last Turkish airlines landing in New Jersey

and I think you end up starting out at Adelphi university in on Long Island so right

he turns out that acceptance was at university Long Island and it was one of one of the most expensive English class and I have two thousand dollars in my pocket my brother gave me from the stumble

you too that you so you arrive with two thousand dollars

three

three thousand dollars and you get to Adelphi to study English and how did it go so how long did you last there because I don't think you would ever it for very long right

a month

a month okay

yeah just months because the two thousand dollars of it was spent in the first month

you were you're running out of money

I was those are the other money I couldn't I had to learn how to speak have to learn I had zero like really zero English

zero English zero zero it's amazing how this nineteen ninety four it's not that long ago

yeah as this is looked over nineteen ninety four and you like a fish out of Washington it is this whole life has dramatically changing so fast I wasn't even have a mental preparation for this

yeah

twenty three years old twenty two years old you know it's not easy

it it must have been incredibly lonely

very very but I have other worries what do I do for a living by the way how do I pay for the schools how do I read light work I my allowed to work how do I survive who do I trust who do I talk to and all that kind of stuff yeah so I started doing things like you know you hear from the other students do you do dishwashing you know help here and there have been people hired you and you get by in E. just go to the house today yeah

and I think it's at this point you had transferred to to Peru college in Manhattan and and you were still selling English there is that right

yes exactly N. two months N. a teacher at the bottle college gave a homework for for language and she asked us to write something in English how to make and I understood that part and I wanted to write how to make cheese

her with the assignment was how to make anything

to something some something is how do you make something so with the help of someone in that denote place when I was living I try to write how to make

cheese

and then a week after this amazing lady

teacher

she comes to me with the paper in her hand and tries to tell me with vanity passionate voice I don't know if she's angry at me with what I wrote or if she's trying to tell me something I don't understand so I bought another Turkish students from the other class and and ask him to tell me what she was trying to tell me to turns out she had a farm in upstate New York she had goats and cows and she loved my paper and she was invited me to her farm for a weekend so we can make some cheese together

wow of course knew how to make cheese because you grow

Jeez it's like yeah

and she had it happen to have the the raw materials but just to know how to use them

and they actually did did did the part the shock me that in New York there was farms I mean I never even imagined that server farms or animals and I thought that was in our part of the way I mean I never I never thought about right so I was having a hard time and I can't wait for the weekend to come she tells me which bus to take and where she's going to pick me up and she wrote down everything if I get lost so I can ask people on the ship with numbers and she picked me up from the bus station in Albany and then from the Albany bus station is another hour drive to the border of Vermont you know this beautiful I'm in as I'm going I'm just I can't believe what I'm seeing in these hills in the mountains

yeah

I feel like I'm back home and it was a simple farm and that they were professionals a husband and wife one and teach it and one was engineer and they wanted to have a farm

and it was a weekend like their weekend home

yeah they would come for the weekend

so all right so you get up there and

so what

what would you do if you're there for the weekend so what did you do how do you teach him how to make cheese

we made this from the goats milk which is the closest the shipment that I grow up

yeah

and in the evening they they make sandwiches they made fire and we see that on the fire which is you know that's what we used to do you know when we were in up in the mountains I had the best time and the end of the second day as I was getting ready to go to the bus station I said I'm what it would take effect in that line I don't know how I said it for me to stay in the farm and work in the farm and go to school from here she doesn't know what she exactly said I think there were some issues with that but in Montel two months later she said do you know if you still want you can come in and stay in the in the in the farm

huh she was offering you to go move up there and by the way I'm just I'm just assuming that you when you got there because your your assumption was or no farms in New York but when you got there it kind of took you back to you to where you grew up right because you're like oh all of a sudden I'm around farms and animals and

exactly

goats and sheep in cheese

yeah when I came back I I made my mind there is no No Way no I know where I'm living in the city I'm moving some work up there definitely because now I know a place like that exist

you wanna be around goats and sheep

exactly

entries in reverse

yeah

I could I could I get it I totally get it so so you so she offers you to move up there and then you took the we know you took the offer

a jump you jump of my got a jumped

when what we can do for

for

which he offered to pay you to or we just gonna figure that out on your

I don't think they could pay me

yeah

but I could live and help right so that's that's kinda how it could and I did I get that job all right I'd move out and all that stuff but ends up being that I lived in that farm for year and a half

and what did you do

I did everything I did everything in the front

and you're living there by yourself in rural

yes

New York upstate New York on the on the Vermont border just you dislike this kid from Turkey

that's exactly how you describe this kid from the you know the Kurdish kids from the sympathetic you living it up

and what do I do so I wake up five o'clock in the morning I gather the cows and I put them on the line up my milk them I clean everything I feed them I water them make sure that the caliphs of fat and I will drive sixty miles to Albany to go to school in Albany continue to learn English

oh well and you did that every few days

everyday everyday I drive one then I would do it five o'clock in the morning milking and then when I come back from the school the first thing a six o'clock I would do again same thing with the cows and all that kind of stuff

and and by the way honey did you have any friends I mean you're like in your twenties you're young guy where you just like milking cow you're working on the farm going to school working the farm going to school

in the last six months my brother my younger brother came and joined me not much friends the everyday the farmers I interacted with farmers N. really I think I got to know America redo out because I moved up there and I got to interact with farmers I get to interact with the residents real people not in the York really you have people from all over the world rights yep Turks and everybody up their heads you know I was probably the first person from Turkey they have ever seen yeah

all right so your brother comes and visits you while you're there and then I think the the following year ninety six your your dad comes to visit you in New York

yes

tell me a little bit about that visit because I think this would be a kind of a pivotal visit him he he was sort of personally coming there just to kind of see when you're in your brother had been had been there with you and and he was sort of coming there is not just a busy but maybe also to find out what you can do with your life

the simple way of put it in as my mother sends him to say could check them out and see what they're doing

right

and then he comes and I'm trying to figure out what I'm going to do with my life I don't know and but one thing is for sure we have to work we have to make some kind of income and he said it seems like there's not good feta cheese in here

your dad when he visited he notices that the what what we like how feta cheese right that

is not good here and it was not good it was pretty awful yeah this was for the off at that time

and and just to be clear like this is something that he would just eat for breakfast every morning right he would have felt that or and Dan Thomas olives right there's too much to conduct traditional Turkish breakfast

a tested then says this is really bad is that anything good I said no this is it but you can find SO why don't why don't you ask your brothers to sensu feta cheese you can sell it here that was the big idea

yeah

so I got to work and found an Armenian distributors who carried the distant products based in queens

and queens okay so you found and they were and and you call them to see if they would be interested in carrying your cheese

I called and I went to visit with him so at that time I got some samples and stuff from back home my brother said that to me and I went to visit us and we make this cheese would you be interested in buying it passes while you have to know the law it has to be a hundred percent ship milk otherwise it will be exposed to duty it would be too expensive all these worries and questions but the answer was yes I will consider it and that was the beginning of my business journey until that moment I have never been involved in business yeah

can I ask you a question but the cheese this is cheese at your brothers were actually making back in Turkey

yes

M. and was the cheese in jars was at hand I mean how did you how did they ship it was it shipped in a cooler is or did it not require cool cooling at all

how did you absolutely cooler yeah definitely cooler it has to be refrigerated

right

and we made really good money on importing that cheese hi this compare to you know working here in that right so we don't have a lot of expenses

right it was it was just you your brother and just making sure that she's arrived in and that's all you were importing just that yeah just offensive yeah

but then my mother got sick then I went to Turkey and I came back with my mom to discover that my mom had a very severe liver disease that we had no idea that she had it then then six months after she passed I had this time off being again feeling like numb it was this time off total

loss yeah

because she was the most important person ever been in my life and she was the most important person in the family she you know it might my father was a big shot and all that kind of stuff but really it was my mother the reason that I was in New York City that she made me to be that person to be independent and come here and of course my god the love that she had that cat in that she had and and and and she made us these hi I can speak to my own she made you feel like you are the most special person in the whole universe and and make sure that you believed in it so she was my backbone she was everything that I was and now she was gone so it was it was made very very massive event and it was extremely difficult to to really stand up and get out of the bed for a long long time

well I I I guess you were you were eventually able to somewhat recover from that M. and get back to business as usual you're running kid brother of the law yeah but but from what I gather it M. A. Easter to maybe both of you started to think you know you know Hey we can make more money or a grill are our business if we if we made the cheese or or what we need here in the US right is

yeah

it added that added you start to do tell me about like that thought process when did you start to think that that that's what you should do

it was and others I DO if my father of saying you know this importing thing is you know with the currency going up and down and all the things that are happening and it's not very hard cheese to make and you can even make it with the with the cows milk why don't you find the place where you can make this cheese here given there were domestic feta be made here the problem was it was horrible literally off like it was so bad and say okay people are buying this stuff so if you make it a little bit better you know that did it's endless

yeah

so this is a no brainer the question is okay where do you make it how do you make it what kind of input kind of environment the kind of place and how do you put this together

when we come back in just a moment how how many starts his own cheese business but switches to yogurt after pulling a vital piece of junk mail out of the garbage stay with us I'm guy rise in your listening to how I built this hi bill this is brought to you by northern trust the landscape of modern wealth is complex challenges and opportunities intersect which is why the northern trust institute was created it's a research center dedicated to servicing new insights and the best financial advice the northern trust institute is dedicated to helping you confidently move forward with advice that is grounded in real world outcomes and backed by proven credibility by analyzing behavioral patterns and identifying the strategies that have been most affected for their clients they position you to take action with confidence and achieve the best outcomes whatever your ambitions might be talk with the northern trust adviser to achieve your goals with a bold new approach to managing wealth based on advice that is grounded in research tested and tailored visit northern trust dot com slash institute that's northern trust dot com slash institute American giant chooses to manufacture all of its clothes in the United States with their high quality long lasting goods they make sure their products the local and state out of landfills unlike how most clothes are made today as quickly cheaply and profitably as possible close from American giant metal last not to wear out for example their classic full zip hoodie is a sweatshirt that actually wears even better and softer ten years after you got it I've been a huge fan of American giant for a long time I'm actually wearing their hoodie right now in the studio because I love what they make I love their shirts I love their genes their socks their products are super comfortable there really durable and they're made locally they're made in the United States you can see more of their story and shop the classic full zip at American dash giant dot com slash built and get twenty percent off when you use code built at checkout that's American dash giant dot com slash built promocode built welcome back to how I built this I'm guy rise so it's around two thousand two and Hamdi has decided to start making and selling his own feta cheese he gets a local development grant to open a small factory in Johnstown New York and now he needs to get hold of some bats for making the cheese

how do I afford to bring the vets that is this stainless steel vessel let's say two thousand pounds they can go ten thousand pounds valued pasteurized milk

right

how do I afford to these equipments and there was a local banker called M. B. T. in Johnston the gentleman that said you know you can get the U. S. D. A. to have a loan guarantee meaning

right

he gives some kind of comfort to the backs I guess that's the way to put the ice that they will land to the local you know businesses to start their business or expand their business and if it goes wrong then they risk is ninety percent removed and they set up the time meeting with a gentleman other sectors of the USDA and he came and met with us and then we heard back after I don't know how long a month or two that we were given ninety percent guarantee or the banks was given ninety percent correct it was it was mind blowing so that basically took care of that part all I had to worry about is the ten percent and then a working capital in old unthinkable

yeah all right so you get you get the loan right attempt to make this happen and you've got two things that you have to do to start making cheese and then if it starts selling it so was first on the making cheese because I think you the factory opened in two thousand two he called it was called Euphrates this the company that you know brother started to make cheese

exactly

and did you see made cheese you had a power by you know that year for sale so I'm assuming the making the cheese part of it was not that hard it was the everything else that was hard

R. Iraq now I I you know in tailoring it should have worked you know you have the mail

yeah

you have the culture then it should work I had one of the worst time making the cheese

what why

how it turns out the Terry and the realities to different things

but you knew how to make cheese you bet been making cheese for years

yeah the milk is different right and then you make the cheese and then how it stays in after two months or a month or two weeks the the texture is not the right that many it's close but it's not perfect

using the cans and getting the consistency is hard because every milk every ship in America's different

editions of the myth defend now we've made cheese with unpasteurized milk now your past arise in and so you have to fine tune that and you're relying on culture companies utilize non you know equipment companies to be able to make that kind of adjustments so there's a lot of trial and error we couldn't do all of those things until we had the rats in place

yeah but how many people working there five ten

ten twelve people yeah I'm making the cheese I'm packing it I'm salting it I'm putting in the palette that pales no tampon pails or turn upon pales whatever it is

where did you find where did you find customers to sell all that cheese

so that's a good I start looking at Greek disturbances now because now I'm really making feta back really fast this is not a table cheese anymore it's a salad cheese is a cheese that they put on their Greek salad right so who are the buyers of this cheese are the Greek distributors and what they do is they deliver to the tightness you know diners at orangewood the

northeast as Greek diners a everywhere and then at least yeah

yeah yeah it's it's to do good to go places right so

right

InDesign is that one of the most popular thing that is even comes even without you ordering is the Greek salad and that Greek salad has

chunks of fat on it

yeah but I yeah I soon enough I realized that this is not this is not a huge margin thing

yeah

you know you have large manufacturers even though the product is pretty awful you have these large manufactures out of Wisconsin that make millions of pounds

right

they ship it all around the country and then I look at the diner is the quality is not the number one thing really I mean it is but it's not is it yeah it says I can have it but the I put the onions in there and I put a black olives and I put them black olives and I put the olive oil no one cares about time you

yeah

who cares

yeah I get it I get it and but but so and were you going literally from diner to diner or were you working with like a big distributor who would then do that for you

yes said not big but the distributors you can go down at the time

yeah it's not possible you can't scale that right yeah so

the first eye opening for me was I coldest distributed on the set accuse and says can I come in sure some feathers has sure come and I go and I showed him this is okay I'll buy it from you and I'm like wow you know I feel like David this is cool this is how much you buys two pallets a week now every other month caught having to pallet every other month is not

nothing

fraction of it's not yeah it's basically so how many of these people I have to have to be able to even pay for my expenses it is at this point I'm saying why then after I did now like but I got myself into

yeah I read I read something you said you said that the years those two years from two thousand to when you started the factory Freddie's a two thousand for the first two years he said was the most difficult time of my life

yes it was literally most difficult times of my life and I have gone through some difficult life before that but this was VT really hard there's no way I could survive there's no way this could make it to the other side there's no way everyday despite this business was gonna die

everyday

everyday everyday I don't have resources I don't know all the knowledge I don't have experience I'm new to the country I'd gotten myself into this I'm already not complete since my mother's dad I mean it's it's a lot of emotions and I remember there was a at little creek next to the in a class and I will go then I will cry and cry and cry but myself and then I will come to him into the inside the factory and stuff making cheese but it was that two years made me who I am today but also was one of the most difficult times of my life

yeah that two year period we get through it but you did start to turn a profit after those two years a small profit I think

yeah so I realize that I'm not going to be so I'm not going to be able to sell the fact that amount that needed to pay all my expenses in this place to one person or two person a five person yeah you have to get as much as I can so that means that I have to go between Boston or New Hampshire or Maine to all the way down to Florida and east wise maybe Detroit and Chicago and find all these small distributors that would buy one or two pallets amount

I

I slept on the roads with the van and meet all these amazing small distributors family owned smell disappears

yeah

and I end up getting them hundreds of them

well

yeah

because I think you're so your sales were I think you had about two million dollars in sales by two thousand five but you have like forty employees so no one is getting rich you know offer two million in sales and forty employees now

I didn't think that there was this would make me a Rachel you will get the result of this

right

all all I wanted to do is survive you know and two years two thousand four you get it he said okay I think I survive I think I survived

yeah

the middle of two thousand four I felt like I could breathe tia

yeah well but that year or something pretty pivotal happened a property came came up for sale I guess not too far from there what tell me the story of of what with badge find out about this property what was it

so here's the thing I am really a messy person even today I'm pretty messy in my office and my desk yeah so once maybe a month maybe every couple weeks I decide that I'm going to organize my desk I'm just gonna go through all the documents all the papers all the letters you know

yep

and you open the envelope sometimes you don't even open the envelope you look at the but it's coming from and you know this is somebody's trying to sell cars somebody tried to sell Borges somebody tried to sell credit card whatever that is you know those junk mails and you just tell them off and put them in there and every once in a while you see an interesting amble up yeah so I come to this one and I opened the envelope I don't know but it comes from of course so it's it's an interesting I open it I look at it it's literally an ad is says fully cooked yoga plant for sale

well

then you can tell that's a really really old I mean the pictures also since nineteen twenty you can tell it's an old kind of close enough no interest so just like the other ones that I don't remember what it was I try them into the garbage I continue and you're going to like twenty thirty minutes and I still don't know why I went back to that garbage and I picked up that page now my teeth remaining is in there might you know might cigarette that it was put it into the TTC

kit kat is also in the

and then I look at that picture again and I'm standing at it and there's a big number on top

top

it turns out that it's a real estate agent from Utica and I called the person answered and said yeah this is a yogurt factory it's an old one it's craft and they closed it and they're selling it as this and I ask the price as to what's the price it's a seven hundred thousand dollars

for yogurt factory

yeah

okay

and I'm looking at this whole thing and you say even if it's the worst condition how could this be seven hundred thousand dollars

what you mean it was it was under priced

so cheap very cheap so I thought he meant seven million dogs

do that based on the plate based on the photo use on a postcard that it was seven million dollars because the just because the equipment

yeah because I know pretty much what things cost

yeah

from the experience of the putting a smaller version into our plants yes twenty thousand square feet this one says sixty seven thousand square feet so it's three times bigger

and it was owned and it was owned by Kraft at the time they were selling yes okay yes

so it was enough interesting so I said can I come and see it tomorrow and I pick one of the guy from the plant who was working in the in the production and it took us two and a half hours to find it it was just back roads and country roads is not like hell next the next to the highway

yeah

and I saw it from a distance this old place hi can I get there and you go up and then it's did someone name is Rick lake ridge lake says hi I'm the production manager Bennett is not here I'm I was told to give you a tour and he takes me to the plant

N.

it's basically every time he goes to the places he turns the lights on it's not a working factory anymore it was until maybe four months ago five months ago

yeah

so that's basically the last

week

off the plant

all

employees are fifty five people in the last six months there's just I guess closing down slowly bringing down shutting things off

yeah

I am not seeing the buildings anymore I'm seeing I am reminding this sad feelings that only would come to our town that I grew up if somebody died in the for the server and four months four weeks back there was this heavy feelings all over the top like people

you felt that when you got to the ten south

yeah he felt it

like it like funereal feeling it's

yeah I felt like somebody died

because they were about to lose their jobs

there were not only losing jobs still losing a place is been there for seventy years it was a sign of life really the steam came out of that place was a sign of life everybody's grandfather worked at mother walked that father worked that it was just walking in that plant was walking in a cemetery

and

it was that kind of and

and and by the way the the from what I understand this was a place that made at in cheese Philadelphia cream cheese was made there

exactly

and you over to

yes Bryers yogurt yeah

and I'm curious because from what I understand from what I've read it was a really old music crumbling paint and it was not in great shape and look good

yeah and there's a smell

all smells like cold just kind of stale or you know kind of

yeah

old cheese smell

yeah everything is old the biggest important things that the real estate agent keeps telling me is that it is as is we don't take any liability off anything so you buy it it's all as is you can't come back and say oh this doesn't work that doesn't work whatever the whatever the things that you find is good and bad it's all yours

yeah

and I left that place after a couple of hours and then when I left I called Mario Papa who was my attorney in Johnstown and I called him up as a Mario I find this place I didn't think that I was be interested Walkin in but now I just laughed this is really amazing place it's got everything I can make yogurt there and I want to buy it and I'm like I'm just like you know when they see something they just call and you don't make sense you throw all the wars that you know into it and you're excited and all that kind of stuff just because of where we were we were we were just straight

hold on hold

it doesn't tell me what you think who who owns the company who's closing it what kind of place and the guy said Hamdi this is the largest food company in the world

craft

yeah

yeah in one video

getting out of your good business the closing the factory who the F. are you you think that you can make something out of this

which is a fair question I mean if the biggest one of because it's a very humbling us getting out of your business at least there and in in that factory why would you think you could make it work he was asking you

makes no sense very fair question and I said no no they don't make good your good I can make good yogurt and you know I don't know how to make good yogurt in Turkey and you know people love it I've seen it in New York and all that kind of stuff and he said seven hundred thousand right I said yes cheap sound as if you don't have seven thousand dollars

he said that to you said you do not you don't have a seven thousand dollars

you will never have seven hundred thousand dollars and if anything you haven't paid in the last six months I have built it just basically said he was true I had no idea so is it he just made it I know it's been painful for the last two years he just he just can breed now don't do this to yourself I know you get excited about things but just

just breed which is very good advice I mean it's good advice because he's trying to go after you he knows what a grind it was the previous two years to make the cheese factory the cheese being a plant barely profitable and he he knows that you're in for a nightmare if you try to do something new now

yeah it's it's things that this is the stupidest thing

yeah

and I took his advice very seriously he was right

yeah

N. I am in my office maybe few weeks after I have this digital banking skull key bank and you know their sales people date these go from businesses the businesses and the communities and say what can be done do you need anything and all you know how they are and there's these two gentleman shows up one is name is Pat Gucci and then he has another person next to him his name is John right there and I said Pat I just went to this place and I saw these yogurt factory N. they're selling it for seven hundred thousand dollars and you know I I called Mario mighty things is stupid idea but I thought you know if I get this place I could make some pretty cool yogurt out of this place that you're talking about and this is how the you know we are partnered with SBA small business administration N. if we get their backing we can come up with a plan I mean of course I have to go look at the plant and look at the supplements and all that kind of stuff we could make this happen there's a small chance but it's possible

well

it's worth pursuing as is whether to make a business plan and and I'll send you some applications and you fill it and we can look at this and I said business plan I know not a business plan how do you make a business plan

yeah

in the last couple of weeks I put that business plan together couple pages he helped me how to do it and then a few weeks later we went to see these they live at the plant and see it and we keep in contact with the real estate agent to tell the to make the story short

they got you the loan

the capital

well can I can I ask you a question about the the business plan for a moment I mean your plan clearly was to make yogurt but what were you going to do that was different how are you going to I mean if if give craft was making work what was the thing that but when people said you Hey honey what again do what would you say

so his the little bit of background you know I don't know if it's easier have I mentioned V. eat so much job within Turkey right so

yeah

breakfast lunch that I meet you can imagine a meal of time occasion that you don't somehow consume yogurt

right

but compared to what it was here D. yogurt was ten times worse it was literally horrible like it was awful stuff

right

and I thought it's music and culture does not cost side of this is just making culture it's just knowing how to make it and I thought people will love it why would it not if there's a better yogurt that is made I thought people would love it if they're buying this **** they could buy that stuff is they're buying that stuff

yeah

they would buy that thing that was my data points and the second data point for me was you know if you meet the people and people ask you where you from is it from your I'm from Turkey the next thing they say oh I was in Tokyo I was in grease and within two minutes the first thing comes up is the yoga that they had in in increasing turn out you know with honey and walnuts and that was one of the best thing ever so there is a disconnect between how people are talking about it and how is the market conditions are

so you have the confidence that this can can work you you get them the money to buy the factory and from what I understand that summer of two thousand five you spent a lot of that time just getting the factory like cleaned and painted and repaired

yeah exactly so then that I have for factory workers that I hired actually the the manager who was the plant manager who was closing the factory I I I asked him I said if one day I wanted to bring this factory back who are the people you would recommend for me to hire and he recommended he says you gotta get Maria because he knows she knows all the vendors you gotta get the rich because he knows all the production equipment you have to have Mike Allen Mike is the guy the guy knew exactly where the older pipes where where the lines were because there was no drawings this was so

old

no one had you know the the the blueprints of the plant so I had to come is my calendar come back which I did and then the base with a side of things that was Frank he knew how to turn that back on so I had those for people with me in the summer of two thousand five

right

and they're questioning me they're looking at me says like who is this guy how are we going to and I can tell the way that they are interacting with me that they're not overly excited they're not overly you know drunk with it but they're cautious at least they have a job and they're looking at me and say what kind of you know ideas and improvements that he's going to make so I'm managing that human psychology at the same time while I am not saying I don't have any ideas but at least I'm not sitting around and doing nothing

all right want one important point and eight yeah I just to and I think a lot of people know this which is the reason why we called Greek yogurt is thicker is because it separated from the way right right because because milk is ninety nine or ninety seven percent water right and then when you turn into yogurt there's a lot of water in there so

yeah

you've got to literally put in a centrifuge likes been the yogurt right really quickly to get the water out but but you do not have like that's a very expensive piece of equipment I don't think it was in the factory right because in this factory wasn't making Greek yogurt was making regular what can American styled watery yogurt

your how to percent right it commercially this cannot be done with the cheese cloudiness to be centrifuge separator and the separate there's ours and I would say they are close to million dollars by the time

the million dollars and by the way you just spent seven hundred thousand dollars buying this production facility

yeah so yeah it is there's no no way in hell I have a million dollars to buy something like this

yeah

I only have maybe a couple hundred thousand that I can spare and that includes everything so I need the used version of this so I'm going on internet looking at everything I can see if I can find something that is used to I found one in Madison Wisconsin and I called the person they said they have it I wanted to go see it so I went to Chicago drive from Chicago to miss Wisconsin and in that drive basically I came up with the name Chobani

HA

turbine means shepherd in Turkish and so piety in a little bit of the film way of saying it is also being shepherd in Greek but the meaning of the word is always super simple you know someone who helps someone who leads someone it's it's a very beautiful ward in in in all dimensions

yeah

and I was so excited with the name I couldn't wait until I get back to Chicago to go to my room and see if that job at that Giovanna dot com was available

I guess it was because you got the demand yeah and so now you've got a name and and you've got a separator to make the the Greek style yogurt so we'll see what else did you need to do what what happened next

so I spend a lump sum of time about the cops you know what the cops is gonna look like the cups for your yogurt that you were gonna sell hope because of my yoga I was so convinced that if I'm going to make this yoga that is going to make it in the shelf it cannot be the in the cops that is available in this country has to be some Europeans cops but the cops are as simple as it sounds if it goes into yogurt it is to be FDA approved so it so you can't just get the cups from anywhere and used to be FDA inspected plant and I found out that there is a plant in Bogota Colombia the event and they should be able to make it for you little sleeve it's for you and we'll ship it for you and I that that was good because none of the packaging companies it would make it for me

and this was gonna be initially Chobani was just single serving yogurt it wasn't like it in the big tubs each can you buy it now initially was just a small Cup

exactly small cops yeah and I want to have a foiled at every flavor has his own foil design on top of it and at that time you know I thought that was very bad in Norman is not a big thing but at that time people said why you know people never do those things and don't you don't you waste thank you don't you hate basing your money your money out each making yourself I'm competitive and all that because of my view was I spend so much time making this yogurt and I think it's it's one of the best that made and people will not you know see the difference if I put him in the same cops see if I can catch data I have them tried once the yogurt will finish the work

got it

and that would be the conversion

and the recipe is simple it's it's milk and a culture but I guess we need to talk about perfecting it was about how long you sort of you he did it at you know and and how long you sort of let it kind of rest I mean it because the the base ingredients it's two things it's it's milk and culture right

that's exactly right and unless you make the flavor once but the basic thing is very simple American culture and you don't want to use preservatives either want to use any any other ingredients so it was just trial and error until you find it it was

yeah and really it was about it was about experimenting with temperature time an incubation and then you've got a blend it to make it creamy right

right after you strain it the it's it's it's it's particulates you know you have small particulates laps yes lumps and you need to soon with that without breaking the texture right so yeah that's that's extremely important as well I'm I used to get really upset when I see your coat on the let it up

on the list I didn't want

I

wanted to be so perfectly smooth in the Cup exactly wouldn't touch the live exactly

I would open a Cup and if I see your good under let that was a bad day

right right you were totally obsessed with it as you should be because you're you're trying to make a product that's so good that it's gonna knock people out the first time they try it

exactly I wanted to make it something that that they look at from every dimension this is something that they've never seen before and probably half way through it would have made the job because this is huge than this I'm going

yeah

but I have no legs should be off all I wish I had done that I wish I had them this is one shot if it's not successful I'm out and I'm out in the vanity of vanity in a very bad way

when we come back in just a moment how Chobani starts growing so quickly that hobby can barely keep up and then it almost goes bankrupt stay with us I'm guy rise in your listening to how I built this you don't ride an elevator for the music or take an airline for the movie so when it comes to audio entertainment it makes sense to choose audible audible is the home of storytelling with all of your audio entertainment in one app find the best of what you love or discover something new let your imagination soar with audible's audiobooks podcasts and originals and as an audible member get full access to their growing selection of content you can download or stream there included titles all you want I double his books narrated by all sorts of different voices even mine by the way an audible you can listen to me read my own book how I built this check it out plus tons more audio books and podcasts on audible today let audible help you discover new ways to laugh be inspired or be entertained new members can try it for free for thirty days visit audible dot com slash build or text built to five hundred five hundred that's audible dot com slash build or text build to five hundred five hundred the track audible free for thirty days I double dot com slash build

stressing shop she was just well past stressing

this holiday the fine welcome back to how I built this I'm guy rise so it's two thousand seven the yogurt factory is up and running and Hamdi has found the first retail location for his Greek style yogurt a kosher grocery in great neck New York

when I made that first yogurt it took us all night kind of night one of my colleague who led the sales side of things we were in the plant probably until one or two o'clock in the morning in the morning and we made four flavors H. about fifty sixty cases and we shipped it to this person and I'm waiting for some kind of response how is that going to come and then I received the second order I called the person and I said what do you see if you could show me some some observations as

yeah

you know he did and said this is flying off the shelf at the say this is amazing so look what looks like people are buying it and some people came back and bought again so yeah send me some more and that was encouraging

yeah and then I guess pretty soon after you were you got into that kosher store in great neck you got into your first grocery chain which was shoprite which is a chain of stores on the east coast and that's that's a there must be a pretty big deal right

yes that is the biggest event in the history of Chobani now in order to be able to make it to shoprite or that kind of conventional stores you have to pay what they call it the listing fee

yeah

and every Cup I don't know what it is now but I think at the time was twenty thousand dollars for each Cup to be on the shelf

just let me just let me understand this so when you go to a small growth kosher grocery store in great neck New York you just send them a pallet and that's it but if you wanna get to a big grocery stores like Kroger or shoprite you actually have to pay them a fee

yeah

to stock your products and it's it could be a lot can be tens of thousands of dollars per per product that you sell

exactly

and by the way all grocery stores do this right target Walmart they'll do this

most of them

and they do it because they can right basically

adjust it that's the only way yes this is Debbie degeneration for them and for a small start up it's a big block if you want to play in the mass in a supermarket chains you can pay I don't know if you have four SKUs for products that you put on the shelf so four times in a hundred twenty hundred fifty thousand dollars

yeah

and how many fifty thousand dollars massive money N. if it doesn't work within three to six months it comes off the shelf so he has to perform to stay right there is no obligation

so it's a huge it's a huge risk disease risk but but here's the thing it seems to me the next logical step would be to go to whole foods and to try to get whole foods

yeah

which is easier in a lot of cases because little there's a lot of autonomy and the buyers are regional and and and they don't have the the high stocking fees or I think any fees so why would you just go down that route that route

so I did not have huge interest on nationalist channels I wanted this product to be a mass channels that ordinary people shop

you don't want this to be like in a leaked product

exactly I was very convinced once I can make this the main channel and people taste that that this is going to go up you know everybody was going to happen all I needed was one example

yeah

that the shop like I said how are you going to pay for the for the distance and this is a true story the guy said what we need to get paid and we had no money M. B. set can you take a percentage off that hundred fifty thousand from each invoice and we ship it to you and the guy said yeah that's fine but what if it doesn't sell and I have no invoice I have no but unlike a colorful I personally said if it doesn't sell I will give you the factory

ways all in unison six he's saying well what if it doesn't sell you're saying my factories to guarantee

yeah I said I'll I'll give it back and I laughed and I think he found out that this is pretty crazy and bald and he made a decision to take it and then and about two two weeks later I had a phone call from him he asked Kyle called me and he called me and he says I don't know what you're putting inside this yoga I don't want to know but I can I keep it on the shelf

well

when he called me that was the combination of three years off without hard work finding solution being on the road trying to figure out things and all that kind of stuff has that's call really summarized the whole thing for me

how is that possible handy you got how do you just put it on the street the thing is that you put on the shelves and you still have to get people to notice it because you're going to grocery store there twenty five thirty thousand products how did people even know about it

it was the cop it was just

it was just the the label it was bright yeah it was just it's look different

yeah and then I priced it below my cost at that time

you knew you were going to lose money

yes I was okay to lose money for probably two months

okay and by the way how many shop rates were you in like five ten

no no it's all of them I think it was over a hundred and hundred twenty something

that's at the wow so

yeah you do get into a system wide yeah but I had that simple napkin calculation if I had reached the twenty thousand cases I would break even and everything after that it would be you know profitable

and the case is is how many cups water two twelve okay so you're taking a gamble that people will just find out about this shop rides and buy it

exactly N. when he put it into an ordinary shelf like a common shop and everybody shop on a yoga tile I received an order and he said twenty five thousand cases and I'm looking at this order and I've said is this twenty five thousand was a two thousand five on that I'm just I'm I should I call Kyla set is this accurate or is they didn't missing one zero says now that's accurate

well

I said is this for a month this is not just for the week

yeah I'm wondering I mean this is a thing right it's a great sounds great you're selling all this yogurt which is exciting but then you have to actually fill those orders like how how are you actually able to make all that yogurt

so that is

so

you know you say you get this all good news that

Dan was twenty one more stop

this is the other one thousand cases and then you look at your blueprint to look at the valuable equipment and the volume you look at all the limitations they can take off and they all cost money right and how are you going to how are you going to meet the demand

yeah

so get converting you know color space into filler room to convert in toilets into the offices to be whatever needs to be done outside of jeopardizing the quality of the food just trying to find

I read that you were you were like every people like sleeping in the factory because you you literally had to fill these mass mass orders and you just did not have

I

mean the people and the facilities to actually do it unless you just operate twenty four hours a day

it is I mean you're talking about thanksgiving Christmas chart for the July weekends anyone who has a minute to spare they're back in the factory and it's not even I'm asking they're doing it by themselves you have to realize guide this is a plant that was the last factor they got close right so you have a large corporation closed and left it out there looking at me this is one of the shots and then they see the orders are coming and this is like

what the hell is going on

is this ever possible that this could happen so everyone went from complete disaster this mindset or it's all set to exciting place where everyone gets so elevated we were just hide it away

right and you were chain smoking just to get through the day

yeah I was I was I was taking Tylenol Advil like god not so I was I was at

well not happy we're not taking care of your health

not I was physically mass most of the nights I'm sleeping on the floor on a my office that there is an office I guess on chairs with eating pizza every day I mean it's it's pretty to the hotel lifestyle yeah

I'm all right so you obviously this thing is taking off and then you start to get more counselors BJ's and then and then cosco but you had to I mean now you really have to bring lots of people and and one of the things that you you did was there was a I guess like a this refugee resource center like in that part of upstate New York

yep

and they had people who just needed work in you are great we need

we need

we need people to work tell me how you like connect with them

so this is how it happened Utica is about thirty minutes drive from where the plant is inside at this and and I lived in Utica

Utica New York yep

yeah I I lived in a map in Utica and I hear that people are said that in Utica as refugees from around the world and they're having a hard time to find a job

yeah

and I called the refugee center and I said what is the problem and she said these are people have a right to work legally settled and they don't speak the language they don't have enough transportation or people don't want to touch it because it's an unknown and you know all the other social issues I immediately said we can solve this problems I drive for me to get the plant every day so why don't we get some cars and buses the people can come to it and we will hire some suggested this and we will train them at the war and will make this work and people have concerns said why are you sure you know how people are going to take this as a I'm pretty sure I know my people and that was started very slow N. and the people who started working that brought their brothers their sisters it became a community and I never thought that was a refugee work it was people in the community and an opportunity for them to participate as much as everybody else participated

so you have the people right and you've got this plant by two thousand ten so just three in three years you're doing two hundred sixty million dollars in revenue that's like by my calculation it's more than a hundred and fifty million cups of yogurt the you're selling it how do you go from like two maybe hitting two hundred thousand two hundred fifty million cups how how do you how were you doing that

well one of the best thing that I had is the date that the prize architect I put that in place it was giving me enough profit to be able to invest back into the company

so you could finance the growth entirely through the sales of the other you could finance like is making more younger means buy more milk means buying more containers like you can pay for all that and and that is usually when the business goes out to investors or private equity you know to bring in a big chunk of cash to scale you were able to do that just from the sale of the yogurt

exactly and having a micro attention on the cost keeping it extremely simple you know at that time you know not only two hundred fifty million to six hundred million dollars I found that company and quickbooks and everything everything in Japan it was internally finance we never had that and outside investors

right

so I had over billion in sales and in five years in the making really really good margins good profits every penny I had not even taken a penny from the company I just put it back into the company and invest in the company

yeah

yeah

but here's a question how do you write your this guy from a village in rural Turkey right N. CHSTE Kurdish village you barely spoke English and you can the US are here you are now okay so couple things I'm assuming start to happen first of all the big big brands the data ends and you know of the world start to see this and are like we got to get to the Greek yogurt business but the second thing that I I imagine is you've got people coming up to you and say Hey Hamdi you're going to get crushed by Dan and then you'll play the General Mills soon you got to bring in outside capital you've got a blitz scale this thing you got to bring in a professional team to run it because you are not equipped to do this you don't have the experience you don't you're gonna get crushed and I I have to imagine people are saying that to you

they are N. I'm getting a lot of phone calls from private equity people over that yeah that just capitalists and all that kind of stuff I'm getting calls from the ordinary banks but this is the blessing I had I was isolated in that small town upstate New York

yeah

I have no previous network off people in business I don't know anyone and I am kind of unreachable I have no board I have no advice that I have no investors and the people in the company is factory workers and sales people and you know that kind of stuff so we are kind of from Mars

right you just had your head down just working all the time you weren't

and I don't even I don't think it sinks at me that what I have just made it I don't even realize what it is until like you just touched a little bit that I realized that this is how it is you build something the big food is going to come with two things one do you want to sell and in that is a heating and others in the information if you don't sell out make the same thing

yeah I'll crush you I mean you're you're a you're a big food companies must be coming to you and say look sell to us we can make this bigger you'll make a lot of money but if you don't do what's do on our own and you know we've got massive marketing budgets week we've got a huge distribution network like you're gonna be in trouble

yeah that's very scary and all this time I'm betting on they're going to be very slow and they were slow so by the time they wake up really I was at five six and the million dollar sales area

wow

and they did come and they said what about selling and the numbers were with billion

they were offering you and you you could have just because you own the company is yours

yeah

great great offer

so now it sits imagine this guy you know working in the factory to enforce seven living about one bedroom apartment in Utica that this the bad hasn't been you know fixed maybe chain smoke

not taking care of myself treats eating pizza slices okay

exactly and then somebody says you can't be a billionaire and I can indeed it's spelled billion you know really literally I didn't know how to spell so now that's you yourself having this real moment right no one can tell you what to do

yeah

no one can stop you what to do I have done no promise to anyone I have no partners it's just this thing is in front of me

so there must have been it and at pull to just do it take the plunge

Hey imagine I am in upstate New York and I am mid thirties right maybe at that time I don't know close to forty and I have offered this shoes amount of money and

yeah

this is what you can do with this money

yeah

and I said no to it and I said no a few times

and why

I was more excited about the journey the distance was happening then the value was generated from and it's just like I'm in the soccer game M. and the middle of the soccer game and I love it and I'm into this game in a such a massive and I'm completely elevated the first time in my life I feel like things are coming out of my being that I didn't realize it existed and I feel alive like the childhood I used to be is like I'm wondering what is behind that month and what is behind that month and I have this enormous amount of curiosity and I wasn't going to stop it for anything that in the world that that that desire to see what this that but this was going to go

yeah but you clearly had enough confidence that your brand at that point because I think like twenty eleven you were the number three yogurt brand in the country after Joplin Dannon but at that time you knew that there was gonna be an explosion of competitors absolutely and you are worried

I was very worried I was very worried and when I said no to those things I knew that I need to build another factory out west

to make more you well to produce more obviously I should do this more

and de risk it it'll be in one location and bring more innovation to it when people will copy the first thing I do I would be on my way to the second thing that third thing

yeah

and I built the factory in Idaho which I went to buy the whole first time

I said we need to build the specter of really fast just a million square foot plant yeah

yeah the one I thinks now is one point four at the time it was close to one million square feet plant

now

and it's forty lines to be built at less than one year so that V. Li it was it was in the borderline stupidity meaning I under estimated how complex that was going to be and are under under estimated how crucial would that be on the health of the company if I was wrong if I did something that's right

yeah

and one plant or one location or you know early companies in our journey is completely different than the second phase and if you don't make that transformation it's it's gonna be a extreme damage and it became almost the problem with that is you do not know how to make separation with your people that you started but it's been the company grows

in other words you you had to basically get rid of some people and you it's hard to do that one because they were the loyal people who help you start it

exactly

but you had to you had to make some changes

yeah E. we made changes after you hit the wall right we had a quality issue with mold

well this until twenty thirteen you guys I think you are a recall which really was very damaging right it was actually quite damaging for you because you you you don't use preservatives and

yet

you know and you had some containers that got spoiled

yes I will never forget the gentleman who came to our plant in Idaho he said handy

this is mauled

mauled is in the rooms in the Brad it's everywhere and you know you open the copping you see green mold and it's not nice yeah it was it was a recall and as you said it was very damaging but we came out we did fix that all the issues and it took us three more years after that to get the bottom off the structural issues like peoples and all that kind of stuff but to my bone to my cell I knew the investment in Idaho was the right thing what I would question now is the way that I did it right I would have been more prepared than I would have done in in stages I within the within that fast I would be more cautious I would put more you know team members in place to make some changes

right because the the the the mold issue came from that manufacturing plant tonight exactly right

and there was a time that I will never forget which is another's in a moment that I will always go back to you're about to file bankruptcy

you were about to file bankruptcy

exactly I never talk about this anyway before

the word so that that recall was that damaging you've gone from

it wasn't that damage India but what it is is the banks got really nervous and they wanted they long to be paid back

yeah

and and that long was used to build the factory supported by it but they're not you have enormous amount of losses because of that factory

yep so the recall happens all the loans get called in

yeah

and you've got a basically come up with the cash and so you're thinking we're done we get it we have file bankruptcy

what this cash

yeah

with people want the world they want so much from here and the people who are showing interest looking at your situation and the stop acting opportunistic

to they offer less money

they offer more money but they want more

they want more equity right

exactly and then they use different different reasons to come up with those things at the time came and I remember the gentleman called me and he said his the amount that you will get hit is the get a percentage of the company you have to give away which is about what was almost majority at that time and and you will be out of the company Hey let's take this I said okay what will happen if I take this I'll probably regret every day going forward you are renter printer you built things and you make one misstep and then someone comes with the money and say Hey take it or leave it our this is our conditions for you to do it and I look at this and I say I must say no to you and I'll tell you why because if I'm gonna die I'm gonna die now I'm gonna die one time I'm not going to die every day rest of my life so I said I'll take this company to

to

bankruptcy

well

any say how do you go from the top of the mountain to the bottom of a hole in between three to four months yeah right and I'm not expecting the accepting that and I said okay it's fun I built it I bury it and and

it's a very I mean you're very stubborn right I mean that's a good quality but it can also be could also be a sometimes not a good quality

he asked my wife about that so you should do you have a way you have a way to make me say things

that

I've never said before but I loved that this conversation because because we come close to making decisions like that that people normally don't know it is hard that people make decisions

yeah

but I had no doubt at that moment I remember walking from my apartment at the time I had an apartment in New York to an office but it was made in one of my colleague and a lawyer and and and a financial person and next the park I cried and I I saw this tea is coming because it's

it's it's

it's hard it's hard that you are about

to

very something that you give your best to and you built and the options were not good enough for you to be able to

yeah

save

yeah clearly you didn't file for bankruptcy you didn't but how did you get out of that

at night before the night before

well

yeah one night before before the file at the banker called and said handy we hear that you're going to do this is gonna makes us look so bad I think they were also acting acting really out of ordinary at the time forcing me to do something and this is well why don't we give you so much money and six months as long as you promise you're going to do an event that you're going to deliver it yourself in a certain things I said yeah sure but I had no idea this was going to come I knew this was a and wrote that we were going to end up and this company was going to be a backdrop to maybe will not exist later on

yeah if you have file bankruptcy it doesn't necessarily mean that the brand would shut down right I mean you you you could restructure at times

totally

button it was unclear what would have happened

I I don't know I mean but did the one thing is how do you go become one of the fastest growing company in history because we literally went from zero to bid in this house in five years without taking a penny from our clients in that factory

it's

and how does

that happen is it on it's a story that should never be buried by the big government makers within a year

yeah the

I'm the you know I'm I'm curious because when in in after that crisis right in in twenty fourteen TPG the Sam private equity firm comes and makes an investment and part of that agreement is that a man named Kevin burns would become the interim president and C. O. O.

yeah

you were the CEO you had founded this company from nothing you built it from a cheese place in upstate New York into what it was so the achievement at this point was enormous now there was pressure for a new CEO to bring in a professional seo there is it was at the time it was an article in the Wall Street journal I'm sure was not easy for you to read but it was critical of you it said you know he's in over his head you know there's not the operations are scattered and blah blah blah I'm sure that must've been difficult for you to read but I also wonder whether a party you was able to say you know look I I I've done this I've made this

year

maybe we should have a different CEO in here

I think you come to a realization and a certain time and you say okay I'm good at certain things but I'm not with that this and this and this

right

I was very convinced that I knew how to start things off the scale things but not necessarily for the infrastructure in place to be able to run the company day and day out without fear of being involved in the floor every single day

yeah

so that I saw that value and that's not because we were not growing that's not because there was a lack of opportunity that because that's what I was tired but I do want to do it I was questioning myself if I'm capable of taking this company from what it is to next level because I've never done this before

and you should be about you should be asking yourself that question

on the present

yeah

the problem with the they they did the D. C. O. things is through this journey of my from two thousand nine to two thousand eleven I probably interviewed five maybe

six

candidates for CEO and every time I interview the person and I was C. at the mansion that would not fit Chobani I would see a dimension that it would be risky I will see the mentioned that it would not it would not be a good working relationship with me whatever that might be I was extremely worried about the culture and what I want this company to be now it's coming to a place that business can be really really powerful force and it is not about you know money it's not about this but what is the role the company can play in society

yeah

I can say I had that's the the minute of the nine thousand ten thousand eight no

right right because you in the last sort of seven seventy years really very much publicly turn kind of bait Chobani into a company that was being a big advocate of immigration reform to hire hiring refugees you know supporting refugee you know admissions into the United States things like that that are risky right because a lot of companies don't want to for understandable reasons don't want to take stances on hot button issues because they just want to focus on their brand and oftentimes it's a good decision right you just like we just want people to like coke and Pepsi like don't don't ask me what our politics are but you decided we're gonna actually stand for these things that there's lots of people in America are happy about said what why I mean it's risky

I look at from the human perspective side of it I said why can't we do things that is good for the society of community and yet I can prove the only reason Chobani is extremely successful if it is is because of those angles I didn't follow the craft route I followed the the kids from you know

from

the Turkish Montagnes believe me Alex with the farmers in the community and say you know what that's open the doors let's open the windows that's open the walls that people can come in and participate and be part of the six at the U. built but never ever in my statements I have said something that I have not implemented into my own place for years and proved that this works before I come I have a credential to go out and talk about it

yeah how did that there's so much we can talk about and obviously we're not going to be able to get everything in the story of Chobani today you know roughly two bodies got about twenty twenty two percent of the overall market in the US it's it's a massive company with lots of different brands there you know there there's talk about potentially taking the company public which may happen next year or or maybe beyond when you think about the story of this young guy who is like grew up you know helping his family there for their flock of sheep and goats two you know I kind of mated to the US and and you know all those people in in New York depression their farms in which you kind of live there and and then you build a company that you know with a multi billion dollar valuation how much of that do you think has to do with just how hard he worked in America and how how much do you think has to do with how lucky you got

I guess combination of all I don't know I sometimes catch myself to see that this is really happening I always say I brought a seat maybe it was loaded with a lot of tradition love you know knowledge and whatever it is but this land was a gray soil for the seat to become something

yeah

and my I have three kids now account and two boys and that's I feel like it's my biggest responsibility to make sure that the next generation my children and the children's children's and everybody's children find the land the way that the fondant and is if anything is improved but I think it's in the news it's in on the I've known some amount of stress and we cannot take this as you know as granted we just have to make it work we need to work harder to make sure that this is a life

and I'm the only cat founder and CEO of Chobani I thought it would you agree with me that raw milk is someone who drinks milk would you agree with me that it tastes better than than pasteurized milk

I grew up raw shipment right we never passes okay

yeah

but I wouldn't give it to my kid you wouldn't give it your kids you know rescue high

risk yes I know I know I know but it's delicious I want server to become a guy

if you drink it I'll drink it I'm sure you know what you're doing

Hey thanks so much for listening to the show this week if you want to contact our team our email address is H. I. B. T. at I. D. dot one three dot com if you want to follow us on Twitter or Instagram our account is at how I built this in mind at guy rise on Twitter and on Instagram at guy got bras this episode was produced by Josh slash with music composed by from teen Arab Louis it was edited by Neva grant with research help from clamor shima our production staff also includes G. C. Howard Liz Metzger Alex Chung Carrie Thompson Catherine safer lane coach John Isabella Christmas sini and Carla Estevez I'm guy rise and you've been listening to how I built this

Hey prime members you can listen to how I built this early an ad free on Amazon music download the Amazon music app today or you can listen early in ad free with one three plus an apple podcasts if you want to show your support for our show be sure to get your how I built this merch and gear and wonder we shop dot com before you go tell us about yourself by completing a short survey at one three dot com slash survey

Hey I'm JJ Redick hosted the old man the three my basketball career has taken me honest credible Reid from playing under coach K. at Duke trip to the NBA finals and NBA career spanning fifteen seasons now are bringing that same passion and insider knowledge the old man that three podcast each episode I sit down with NBA legends like grant hill and Gary pace and some of the best in the game today like Luka don church Kevin Durant nothing is off limits on my show we talk player to player friend of friend and share our personal experiences both on and off the court we discuss anything and everything from career ending injuries the psychology of being a good coach and leader Mikael Lustig down church talked about how he needs to grow emotionally as a leader in order to lead the maps to a championship all the old man in the three wherever you get your podcast you can listen ad free on the Amazon music or one three out

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