A decade ago, Greek yogurt was ascendant in America. In New York state, the hope among farmers and politicians was that their fortunes would benefit as well.
In 2005, Hamdi Ulukaya spent less than $1m buying an old Kraft yogurt processing plant in New Berlin, 150 miles northwest of New York City. Within two years, the native of Turkey was already a success. His yogurt brand, Chobani, was in supermarket refrigerators everywhere, pushing aside older, big-name brands while making Greek yogurt a staple of the American diet. Rich but also healthy, it made its way into recipes for everything from smoothies to muffins and even popsicles.
“Greek yogurt was a very big innovation in the yogurt market,” said Caleb Bryant, senior drink analyst at Mintel. For decades, yogurt was runny and high in sugar. “Then Chobani comes onto the scene and changes the idea of what yogurt can be.” With sales on the rise, New York Governor Andrew Cuomo convened the state’s first Yogurt Summit in 2012. In 2013, after the state became the top U.S. yogurt producer, he changed state law to allow farmers to have up to 299 cows instead of just 199 before they had to comply with certain environmental regulations.
The dairy industry in New York expanded rapidly. Yogurt production in the state peaked that year, tripling what it was in 2007. But in the years that followed, Greek yogurt began to suffer the same fate that’s bedeviled the broader dairy industry — changing tastes.
From April 2017 to April 2018, sales of Chobani products grew only 1 percent while sales by all companies in the segment slipped 2.2 percent. Chobani’s growth is largely coming from Chobani Flip — a mixable yogurt product — and yogurt drinks, according to Bryant. (While the company’s New York facility still produces significantly more total yogurt, those products are both made in its Idaho plant.) Meanwhile, Chobani’s bonds are among the worst performers in the global food and beverage sector.
Timely, incisive articles delivered directly to your inbox.