Chobani IPO: What you need to know


Chobani, LLC is a producer of Greek yogurt food products that started in a rural area of the state of New York but has now found a home in Twin Falls, ID where they own and operate the largest yogurt manufacturing site in the world. Their products are sold in the US, Canada, Australia and the UK. They are known for treating all stakeholders well – employees, vendors, consumers and local communities. So much so that many of the original employees are still there. From a tiny yogurt maker making products based on the recipe of a yogurt master, to now contemplating a potential $10 billion valuation at IPO, the company has grown exponentially while protecting its sustainable processes. 

TL;DR

  • Chobani was founded 2005 by Hamdi Ulukaya
  • The initial focus a greek yogurt based on a recipe that took 18 months to perfect
  • Total fundraising has been $750 million via debt financing from TPG
  • It didn’t hit shelves until 2007 and went from $0  to currently over $1 billion annually in sales
  • In 2014, Chobani was sued over it’s tagline “How Matters”. The matter was settled confidentially in 2017 and the tagline remains. In 2017, Chobani sued Alex Jones over false allegations he made on his program and website. As a result, Jones issued an apology and retracted his statements. 
  • In May 2021, Chobani received Fair Trade certification. In July 2021, the company was sued over claims that allege that working conditions the dairy workers are subjected to are dangerous. The case is pending. 
  • Hamdi Ulukaya is still the CEO.  In summer 2019, he promoted Peter McGuinness to the position of President and COO.  In December 2020, the company hired its first Chief Business Development Officer and Treasurer, it’s former CFO, Michelle Brooks and hired a Chief Financial Officer, veteran finance expert, Jody Macedonio.
  • The IPO could potentially value Chobani at $10 billion; in 2016, the company was estimated to be valued at $3 billion.

Chobani at a glance

Founder and CEO, Hamdi Ulukaya, grew up in Turkey and his parents owned and ran a goat, sheep and dairy farm where they made both yogurt and cheese. They lived a semi-nomadic existence as they cared for their flocks. Chobani means shepherd in Ulukaya’s native tongue. While attending the University of Albany in Albany, NY, Ulukaya worked at a local farm.  His first foray into having a business was a company he started in 2002 called Euphrates which imported the feta cheese his parents made in Turkey.  The company barely broke even; but it was a great introduction to the food manufacturing industry. 

When he started Chobani in 2005, he had that experience already under his belt. The spark for this was seeing a flyer for a closed, former Kraft manufacturing plant in rural NY that was for sale.  He used a loan from the SBA to purchase it and thus, Chobani was born. He wanted to sell yogurt that was thick like the yogurt he grew up eating, as opposed to the thinner American-style yogurt that was available in stores. 

While Ulukaya speaks of his time running Euphrates as some of the most difficult in his life, it provided the training ground for his success with Chobani.  And this is reflected in the number of awards the company has won including: 

  • Winner of the DBIA Design-Build Project of the Year Award for the Twin Falls plant in 2013
  • Winner of the Food Plant of the Year Award for the Twin Falls plant from Food Engineering magazine in 2013
  • Winner of Nielsen Breakthrough Innovation Award for Chobani® Flip® in 2016
  • Winner of Best Brand Award for Greek Yogurt by American Choice Awards in 2017
  • Winner of the Gold Pencil for packaging by The One Club for Creativity in 2018
  • Winner of the Lausanne Index Prize, Supreme Award in 2020
  • Named The Most Innovative Company in North America by Fast Company in 2021

Chobani is known for being a very values-centric company. The three most defining aspects of their culture are: innovation, giving back, and valuing people. The website has this to say about innovation: “Chobani believes in nonstop innovation that results in nutritious food, accessible to everyone, while supporting and caring for our people and communities near and far.” This innovation has played out as they went from selling their greek yogurt in the iconic bowl-shaped cups to now having products in five categories: yogurts, creamers, non-dairy oat milks, plant-based probiotic drinks, and ready-to-drink coffee. 

The company believes in giving back and advocates for others. According to the website, for Chobani, it’s “always been about more than yogurt”. They are committed to environmental wellness, diversity & inclusion, nutritional wellness, and social wellness. This has led to them achieving Fair Trade certification. And they also have started the Chobani Incubator to help other food startups tackle problems in the food industry. In 2016, the Chobani pledged a 10% ownership stake to its employees whenever the company is sold or goes public based on tenure, drastically increasing the networth of its longest serving employees. Despite receiving death threats, Chobani continued its practice of hiring refugees and immigrants and in 2016, reached the point of having 30% of its employees be immigrants. Starting in 2017, Chobani began a new paid parental leave policy for mothers and fathers for 6 weeks of parental leave for full-time employees who have at least 12 months of tenure. With these efforts to function sustainably and treat employees well, it is no surprise that Chobani’s mission focuses on elevating whole communities. As part of their Impact arm, Chobani has given more than 175 financial grants, donated more than 55 million products and employees have donated more than 24,000 volunteer hours. 

Founder Hamdi Ulukaya remains as the CEO. The company is known for rewarding loyalty. In summer 2019, he promoted Peter McGuinness to the position of President and COO.  In December 2020, the company hired its first Chief Business Development Officer and Treasurer, it’s former CFO, Michelle Brooks and hired a Chief Financial Officer, veteran finance expert, Jody Macedonio. These hires signaled their intentions to explore the IPO because of the depth of the financial expertise of both Brooks and Macedonio.  Interestingly enough, 50% of Chobani’s C-suite is now female.

From entering the market at $0 in sales in 2007, the company has over $1 billion annually in sales. Ulukaya credits the company’s success to running the manufacturing side well and treating people fairly.  Chobani products are sold in stores in the US, Canada, Australia and the UK. The company has grown by expanding the products offered. 

Chobani fundraising to know about

Chobani has only had one round of funding: 

  • Series A: April 2014, Debt Financing, $750 million, from TPG

Path to the Chobani IPO 

The company is regarded as a unicorn but it is not clear when it reached $1 billion in valuation because as a private company, it is not obligated to release that information. In 2016 when the company gave employees a 10% share of ownership of the company, it was estimated that the company was worth $3 billion. Initially, Ulukaya was focused just on growing the company.  His early success caused competitors to approach him at times to see if he was willing to sell but he always said no. He understood that in general, the ways that food startups tended to grow was becoming a subsidiary or selling outright to a bigger company or getting venture capital funding.  Food start ups take these routes because the big threat is that a large food manufacturer will be able to copy their innovation and bring it to market faster with their already established manufacturing and distribution processes.

 In 2013, Ulukaya was quoted as saying, “Chobani is not a yogurt story,” he said. “It’s a manufacturing story. No start-up has done it any other way, so I wanted to do it in another way,” Ulukaya said. “I bet on these guys being lazy, that they’re not going to wake up that fast, and I said, ‘I’m going to be fast. This was not going to be about selling; this was going to be about making.” Ulukaya made a good bet by staying focused and not outsourcing anything. Reportedly he turned down buyout offers from both Dannon and Pepsi. Now, with a continued focus on growth, he looks to an IPO. 

Related: You can learn more about IPOs here.

When is the Chobani IPO date? 

In February 2021, Ulukaya had this to say about contemplating the IPO, “As we create the food company of the future, we’ll look at all options carefully to fuel our ambitious plans, especially with oat milk and plant-based products. An IPO is definitely one exciting direction but whether or not we’re public, we’ll keep disrupting and making things better.”

Chobani filed confidentially for the IPO on July 7, 2021 therefore no SEC paperwork has been released to the public yet. While it’s valuation has not been released to the public, insiders have reported off the record that the valuation could be as much as $10 billion. Their current minor investor is Healthcare of Ontario Pension Plan’s private capital arm. They have not released a statement about the IPO. Founder Ulukaya remains majority owner. 

What investors should know about the Chobani IPO 

All investments have risks.  Let’s explore what type of risks investors might need to consider with a Chobani IPO. Issues specifically facing Chobani are the future of the yogurt industry and the economic downturn caused by the global COVID-19 pandemic. While Chobani has captured more than 50% of the yogurt market and is leading in the greek yogurt category, overall yogurt sales have declined the past few years. Prior to the decline of the past three years, the industry had experienced 10 years of steady growth. The industry is highly competitive. Mordor Intelligence predicts the global yogurt market will grow by 4.5% by 2025. By expanding into more product lines past just yogurt, Chobani is protecting and enabling their growth factor. Chobani successfully navigated the global pandemic and experienced sales growth in both 2019 and 2020.  

Competitors of Chobani include: Dannon, FAGE, Muller Quaker, Noosa, Stonyfield, Yoplait (owned by General Mills) and Mondelez. Dannon, General Mills and Mondelez are publicly traded. The rest are private companies. 

Bottom line

Chobani is exploring a 2021 IPO and filed SEC registration for a confidential underwritten IPO in July 2021. The company is poised to benefit from growth in the yogurt industry specifically and growth in the food industry as a whole. While no one is exempt from risk, if the company can continue to innovate in terms of new product lines and manufacturing processes, there is the potential for growth. 

Julie Pierce Onos is a Massachusetts-based writer and Organization Development expert. She loves the stories that numbers tell us about business, relationships and health. You can connect with her on Twitter at @juliepierceonos.

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