STRONGBRANDS    Professor Tim Calkins, Kellogg School of Management

This week Chobani opened one of the largest yogurt factories in the world. Agro Farma, Chobani’s parent company, celebrated the event with a marching band, Olympic athletes and Idaho’s political leaders.

You can read more about it here:

https://www.idahostatesman.com/2012/12/17/2384277/chobani-getting-ready-to-open.html

The Chobani story remains one of the more remarkable tales in business today. Back in 2005, Hamdi Ulukaya saw an ad for an abandoned Kraft Foods yogurt plant and decided to buy it. He then spent about two years figuring out how to make a good yogurt. He launched the Chobani brand in 2007.

The established players in the industry, yogurt giants Yoplait and Dannon, looked at the idea and dismissed it. I imagine the thinking went a bit like this:

“Introduce a Greek yogurt? Really? That is a ridiculous idea. We know the United States yogurt market and one thing is very clear: people in the United States don’t eat Greek yogurt. Maybe the Greeks eat Greek Yogurt. Look where that got them.”

Chobani is now one of the largest brands of yogurt in the United States with sales approaching $1 billion annually.

This year Dannon began defending but Chobani continues to do well; Dannon is apparently gaining in the Greek yogurt segment but this growth is coming largely at the expense of Fage.

You can learn a lot about defensive strategy from the Chobani story. Perhaps the most important lesson: It is easy to deal with a new competitor when they are new but exceptionally difficult once they are strong and financially robust and able to build one of the largest yogurt factories in the world.

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This week I’m back in Chicago. I’m well behind on holiday preparations and everything else after my trip to Japan and Denmark. So I’m taking off the rest of the year to catch up. Best wishes for the holiday season!

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