Can Greek Yogurt Save The Greek Economy?

Mar 19, 2012 8:01 am

It's taking over the $4 billion yogurt industry

Fage and Chobani are the two leading brands in America.
Fage and Chobani are the two leading brands in America.
 
Greek yogurt fans can thank Chobani founder Hamdi Ulukaya.
Greek yogurt fans can thank Chobani founder Hamdi Ulukaya.
 

In this era of economic misery and global collapse, there’ve been very few bright spots in the business world. But perhaps the brightest is the remarkable surge in popularity of Greek yogurt.

Considered to be one of fastest growing food categories of all time, Greek yogurt is now a driving force for the $4 billion yogurt industry in America, which is incredible given that Greek yogurt was just a drop in the milk bucket just five years ago. Today, it represents about a quarter of all yogurt sales and is growing.

I’m not a yogurt guy myself, but my family had been eating the stuff for a while before I relented. If you’ve ever tried the stuff you know Greek yogurt is not like normal yogurt: it’s much thicker, slightly sour, not gelatinous, and the fruit ingredients of the brands my wife prefers—Chobani and Fage (pronounced “fa-yeh”)—are highly evolved. The spike in popularity is largely due to the fact that Greek yogurt has twice the protein of regular yogurt, has more probiotics, and is more filling. And although there’ve been studies that say people are not flocking to Greek yogurt for the taste, I’d say it tastes far superior to the typical fare.

But the emergence of such a hot product is in marked contrast to the miserable collapse of the country of Greece. So, it’s worth asking: will this Cinderella story provide a boost to our troubled Mediterranean brothers?

The short and easy answer is: no.

As it turns out, what makes Greek yogurt Greek isn’t where it’s from: it’s the process in which the whey is strained from the yogurt, making it much thicker. In Greece, what we call Greek yogurt is just known as yogurt, or strained yogurt. And outside of Fage, the producers of most of the Greek yogurt eaten in America—Chobani,

Stonyfield Oikos, Dannon Oikos and Yoplait Greek—have nothing to do with the cradle of democracy.

In truth, the real success story behind the success story is that of Hamdi Ulukaya, a Turkish businessman who started Chobani when he opened his Greek yogurt facility in upstate New York in 2007. After recording astounding annual growth rates, Chobani now pulls in more than half of sales of Greek yogurt in America, beating out those big conglomerates (General Mills owns Yoplait; Dannon is owned by a vast multinational corporation). Now, Chobani is the number one seller of yogurt, not just Greek, but all yogurt, in America. The company, which is privately held, is said to be valued at $700 million.

The irony of a Turkish guy selling Greek yogurt can’t be lost on students of history. There’s animosity between Turkey and Greece, dating back to the Trojan wars, extending to today’s disputed territory in Cyprus. But the two nations, and its cultures, are so intertwined. Mr. Ulukaya selling Greek yogurt in America is not entirely unlike Derek Jeter selling Red Sox baseballs caps in Japan. But I’m not hating on him for it. I’m loving him for it! Turkey has its own tradition of strained yogurt, but it’s not an association most Americans could appreciate.

Ulukaya is a smart guy—Forbes called him the Steve Jobs of yogurt—with a great product. He bought an old yogurt plant from Kraft and then spent a year and a half researching and developing his product, holding out because no big distributor would touch his stuff until a Stop & Shop finally made a deal with him. And he’s outdone the big boys.

Chobani spokesperson Nicki Briggs assures me that we can think of Greek yogurt in the same way we think of French fries or Brazilian nuts. But Apostolos Digbassanis, the trade commissioner from the Greek trade office Consulate General of Greece in New York, would differ. He tells me that, in his highly vested opinion, Fage is better than Chobani, and that it tastes more like the strained yogurt one can purchase in Greece. In fact, he says the Fage sold here tastes the same as the one sold in Greece, where the company began in 1926. I imagine there must be some sour grapes, considering Fage’s market share in the U.S. has plummeted compared to Chobani’s, but Digbassanis was very diplomatic about the whole thing.

I’m not going to play favorites. In my own personal, unscientific taste test, I preferred Chobani, only because, indeed, Fage’s yogurt is too thick for me. And, perhaps, too authentic. But I still like both. Where I will play the hater is on Dannon. You may have noticed its pandering commercial for its Oikos brand during the Super Bowl, starring John Stamos (who’s family was once Stamatopoulos). And their product may be cheaper, but it isn’t on par with Chobani or Fage.

Digbassanis notes that he can appreciate how Greek yogurt has helped improve the “challenged” image that Greece has today. And he adds that there is a Greek exporter of Greek yogurt, called Olympus, as well as several Greek interests exploring the possibility of starting up production on our shores. But they’ll be playing catch up to Chobani.

Noting the disparity in the performance of her product with that of Greece’s status in the world, I asked Chobani’s Briggs if the company ever gives money to Greece or Greek charities as part of its extensive charity foundation. “That’s a great idea,” she replied.

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