Chobani's billionaire founder on creating jobs in America
The following is a script from “Chief of Chobani,” which aired on April 9, 2017. Steve Kroft is the correspondent. Michael Rey and Oriana Zill Granados, producers.
At a time when Americans are debating whether immigration and refugees are a good thing or a bad thing for the country, it is sometimes noted that Tesla, Google, eBay, and Pepsi Cola are all either founded by or currently run by immigrants, and, in one case, a refugee. It’s a reminder that foreigners don’t always take jobs from Americans, sometimes they create them. And of all the success stories none seems more relevant to the current debate than the tale of Hamdi Ulukaya, who came here from Turkey 23 years ago on a student visa with almost no money. Today, he is a billionaire who has changed American tastes with his Chobani yogurt, resurrected the economy in two communities, and drawn praise and some hostile fire for the way he’s done it.
He is a familiar, paternal presence on the factory floor, where everyone calls him Hamdi.
Hamdi Ulukaya: Hey brother, how you doing?
He oversees every detail of a product line that barely existed a dozen years ago. Greek-style yogurt -- a thicker, tangier version of the dairy product that Ulukaya popularized here and named Chobani. It’s now the best-selling brand in America.
Steve Kroft: What is the word, “Chobani,” mean?
Hamdi Ulukaya: It means shepherd.
Steve Kroft: Shepherd?
Hamdi Ulukaya: Shepherd. It’s a very beautiful word. It represents peace. And it meant a lot to me because, you know, I come from a life with shepherds and mountains and all that stuff.
His family raised goats and sheep and made cheese and yogurt in a small Kurdish village in Eastern Turkey. During the summer months, they would move to the mountains and graze their flock under the stars. He says he was born on one of those trips but he doesn’t know the date or the year.
Steve Kroft: So how did you come not to know your birthday?
Hamdi Ulukaya: Yeah, in the old days, you know-- the nomads they didn’t deliver babies in the hospitals.
“[Chobani means] shepherd. It’s a very beautiful word. It represents peace. And it meant a lot to me because...I come from a life with shepherds and mountains and all that stuff.” Hamdi Ulukaya
Steve Kroft: Midwives?
Hamdi Ulukaya: Midwives, yeah. They would register when they come back. The registration officer would put everybody in January. Says it’s easy for math. Like, 70 percent of our town at that time, born in-- somehow in-- January. I’m January 20th.
Hamdi Ulukaya: This reminds me of home.
He came to the U.S. at 22, a passionate, idealistic student who had gotten in trouble with Turkish authorities for writing articles sympathetic to the Kurdish rights movement. He was hauled in for questioning and decided it might be a good idea to leave.
Steve Kroft: Did you speak any English when you came?
Hamdi Ulukaya: No.
Steve Kroft: None?
Hamdi Ulukaya: Zero
Steve Kroft: No family, no--
Hamdi Ulukaya: Nothing. Nothing.
Steve Kroft: No friends?
Hamdi Ulukaya: Nobody. No.
It took him a year to find his footing in upstate New York where he spent the next decade finishing his studies, working on a dairy farm and starting a modest feta cheese business here one day he spotted an ad.
Hamdi Ulukaya: It said, “Fully equipped yogurt plant for sale.” And it has a picture in front. It said 1920 on the back. There was small, small picture of various per-- parts of the plant. And I called the number.
The real estate agent said the 85-year-old factory was owned by Kraft Foods which had decided to get out of the yogurt business.
Hamdi Ulukaya: And I asked for the price. And he says $700,000. I mean, you cannot even get a tank with $700,000. How could this be? So I didn’t ask the second time because I didn’t want him to think that I--
Steve Kroft: Didn’t believe him?
Hamdi Ulukaya: Yeah.
Steve Kroft: Or get him to reevaluate the price?
Hamdi Ulukaya: Yeah, he says, “Oh, maybe-- we’re asking too little.”
Sensing an opportunity Hamdi set off to the small village of New Berlin, New York, to have a look. There he found the last employees of the last plant in the area closing it down.
Hamdi Ulukaya: I remember like yesterday. It’s like this sadness in this whole place. Like as if somebody died, like, somebody important died.
Steve Kroft: Two hundred jobs?
Hamdi Ulukaya: Two hundred jobs was gone.
Former employees Frank Price, Maria Wilcox and Rich Lake were among the mourners that day.
Rich Lake: Your whole livelihood’s gone. You don’t really know what you’re gonna do or where you’re gonna go.
Steve Kroft: So in comes this guy. Did you think he was for real?
Rich Lake: Honestly, it was a little farfetched sounding at first. There was a little bit of doubt. At least for me there was. You know, I mean--
Hamdi Ulukaya: It’s OK. I doubted myself too.
He didn’t have any money, but he managed to get a regional bank and the Small Business Administration to split the risk of a million-dollar loan...that put Chobani in business and allowed Hamdi to hire his first five employees four of whom had been let go by Kraft.
Hamdi Ulukaya: And we had no other ideas what we were going to do next.
It would take them two years to come up with a product and figure out how to produce it. Hamdi spent most of his time in the plant, except to grab two meals a day at the local pizzeria owned by another immigrant Frank Baio and his wife Betsey.
Hamdi Ulukaya: This is the only place in my, you know, in my early days of coming here, this is the only place you can come and connect to life again and society and go back to whatever you do.
Frank Baio: And I want to say something, ‘Scuse me if I interrupt you. Before Hamdi showed up in this town, I was the king.
Steve Kroft: What did you think of his plans?
Frank Baio: Well. let’s put it to you this way: I kind of felt sorry because I don’t think he know what was get into it. I mean, I-- you figure for Kraft to shut it down, who the hell is this guy that he’s gonna open up and make it right, make it going?
Almost all of the early Chobani meetings took place here…along with some small celebrations. Betsey remembers one where Hamdi offered this toast.
Betsy Baio: He said, “Here’s to wishing we could ever make 100,000 cases of yogurt in a week and not worry about the light bill.” I said to my husband, “I’m gonna feel so bad when he loses his shirt ‘cause he’s never gonna sell 100,000 cases in a week.”
Actually it would take only a year. The first order of Chobani yogurt –150 cases-- was delivered to a kosher grocery store on Long Island in October of 2007…no one knew if there would be another.
Hamdi Ulukaya: The store manager called me and said, “I don’t know what you’re putting into these cups. I cannot keep it on shelf. Don’t tell me what you’re putting in there.” At that moment, I knew this was-- like, three months in, this was not going to be about if I could sell it. It was going to be about can I make enough.
It would require more machines, bigger facilities, more milk from the surrounding dairy farms, and a lot more people. Between 2008 and 2012 production of Chobani yogurt grew to as much as two million cases a week, revenues reached a billion dollars a year and the number of employees shot up to 600 ... It’s now roughly a thousand.
Hamdi Ulukaya: Anybody in the community who wanted to work for those years would find a job at Chobani. Anybody, we were hiring. And if they were not working for us, they were working for the contractors that were doing job for us. Because the-- my-- my number one thing is I was gonna hire everyone local before I go outside.
Hamdi’s recruiting effort included a stop at a refugee resettlement center in the city of Utica 40 miles away, where he heard they were having trouble finding people work.
Hamdi Ulukaya: They said, “Well, the language is a barrier. And transportation.” I said, “OK, let’s try some. I will hire translators. And we’ll provide transportation. Let them come and make yogurt with us.
Steve Kroft: And they worked out?
Hamdi Ulukaya: Oh, perfectly. And they are the most loyal, hard, working people along with everyone else right now in our plant in here, we have 19 different nationalities, 16 different translators.
By 2012, the capacity of the plant in New Berlin had maxed out. They were running out of people, running out of milk and running out of room. So Hamdi decided to build a second facility -- the largest yogurt plant in the world, in the town of Twin Falls, Idaho, all based on a sketch he’d roughed out on a napkin at Frank’s pizzeria.
Hamdi Ulukaya: And if you look at the plant and the-- and the napkin, it’s basically the similar-- similar design. The piping in this plant is-- if you put it together-- from here to Chicago and we built them less than a year.
There were some initial growing pains: a shipment had to be recalled because of mold contamination and early production delays necessitated an emergency loan. But the business survived and has thrived in large part because of Hamdi’s competitive nature.
Hamdi Ulukaya: I love innovation, I love competing. I hate my competitors.
Steve Kroft: You hate your competitors?
Hamdi Ulukaya: Of course, I do. I wanna beat them up.
Steve Kroft: You want to make Dannon yogurt and Yoplait suffer?
Hamdi Ulukaya: Back to France. Just kidding aside. What I mean is you cannot be in the world of business-- when you don’t have this consciousness of winning. But in a right way.
Today the Twin Falls plant has 1,000 employees with above average wages and generous benefits. It pumps more than $2 billion-a-year into the regional economy, which is now running at close to full employment. It’s allowed Hamdi to hire fellow immigrants and refugees, not instead of American workers but alongside them.
We met two of them in Twin Falls, sisters, and agreed not to use their names or disclose the Middle Eastern country they fled because they fear reprisals from the human traffickers that separated them from their family then abandoned them as young girls on the street corner in Eastern Europe.
Steve Kroft: How did you manage to get out?
Sister 1: Took us a long time. I prefer really not to talk about it because it is really painful--
Sister 2: It’s painful, yeah.
Steve Kroft: Would you have survived if you had stayed there?
Sister 1: No.
Steve Kroft: You’re sure of that?
Sister 1: Yeah. Definitely. I was not sitting here alive if I was not leaving.
Hamdi Ulukaya: They got here legally. They’ve gone through a most dangerous journey. They lost their family members. They lost everything they have. And here they are. They are either going to be a part of society or they are going to lose it again. The number one thing that you can do is provide them jobs. The minute they get a job that’s the minute they stop being a refugee.
Hamdi Ulukaya insists he’s not an activist just a businessman. But the fact that he comes from a Muslim country, supports legal immigration and helps refugees has not been universally popular in Idaho, one of the most conservative states in the country.
During the past election, Chobani was attacked by far-right media, including Breitbart claiming it had brought refugees, crime and tuberculosis to Twin Falls, none of which is true yet both Hamdi and the mayor of Twin Falls received death threats.
Steve Kroft: One publication had a headline that said, “American yogurt tycoon vows to choke U.S. with Muslims.”
Hamdi Ulukaya: Yeah.
Steve Kroft: People targeted you?
Hamdi Ulukaya: Yeah, It was an emotional time. People, you know, hate you for doing something right. I mean, what can you do about that? There’s not much you can do.
The situation has cooled somewhat and Hamdi enjoys the full support of Idaho’s very popular and very conservative Governor Butch Otter.
Butch Otter: I think his care about his employees, whether they be refugees or they be folks that were born 10 miles from where they’re working-- I believe his advocacy for that person is no different. And there’s nothing wrong with that.
We traveled with Ulukaya to Europe, where he has made the international refugee crisis the focal point of his personal philanthropy. He’s donated millions to help survivors like these in Italy.
Hamdi Ulukaya: What’s your name?
...who risked everything fleeing Iraq, Syria and Africa in hopes of finding a better life. He’s also enlisted the support of major U.S. corporations in the cause and pledged to give most of his fortune to charity.
Hamdi Ulukaya: She died?
Refugee: Yes.
Hamdi Ulukaya: And the kids died too?
Hamdi says he had no idea that things would turn out the way they have when he came to America 23 years ago and bought that shuttered yogurt factory in upstate New York. He is now showing his gratitude. A year ago, he gave 10 percent of all of his equity in Chobani to his employees.
Hamdi Ulukaya: It’s not a gift. It’s not a, “Oh look how nice I am.” It’s a recognition. It’s the right thing to do. It is something that belongs to them that I recognize. That’s how I see it.
