Chobani, a Classic Immigrant Success Story, Files for IPO

Chobani, the Greek yogurt marker, plans to become a publicly traded company in 2022. In preparation for an initial public offering (IPO), the company filed paperwork with the Securities and Exchange Commission (SEC).

Yogurt sales are on the rise around the world. Currently, it generates most of its revenue within the United States, although the company is expanding internationally.

In 2020, the company reported revenue of $1.4 billion growth, 5% more than the prior year. Approximately 90% of net sales were generated in the United States.

Chobani’s Immigrant Success Story

Chobani is a classic immigrant success story. Founded by Hamdi Ulukaya in 2005, the company’s humble roots began in a defunct factory in upstate New York. Although Mr. Ulukaya did not have experience in the yogurt industry, he grew up in a dairy-farming family in a small Turkish village.

After migrating to the United States in 1994, Mr. Ulukaya noticed the lack of Greek-style yogurt. He was not a fan of American-style yogurt. Chobani’s first yogurt sales occurred in 2007.

Chobani spent little on marketing in its early days and opted to build authentic connections with a loyal base of customers. 2009 marked a breakthrough when it scored a deal with Costco. That provided a foundation to expand manufacturing capacity and introduce new product lines.

The company’s rise is partly helped by the widespread popularization of Greek yogurt. Over a decade later, the “yogurt king” reflects on Chobani’s early success. “You have to have a mission that aligns with the consumer’s mind,” Mr. Ulukaya stated. “People will take your brand to the next level if they love it, and they are attached to it, and they find something that they like about it.”

Flavorful Products

First known for its classic Chobani cups with fruit on the bottom, the company also gained popularity in its early days with its Chobani Flip Greek yogurt. The Chobani Flip contains one compartment of yogurt and another compartment of crunchy mix-ins like salted almonds, dark chocolate, and graham crackers.

Before Chobani’s inception, Greek yogurt accounted for less than 1% of all yogurts on U.S. store shelves. Today, Greek-style yogurt accounts for about 50% of yogurt sales in the United States. It ranks first of the various Greek yogurt makers.

“We insisted that it become a main item of the daily aisle where everyone shops. Then we were in the factory and worked weekends, evenings, Christmas, and Thanksgiving — every day,” Mr. Ulukaya noted. “And we focused on our product.”

To keep up with changing consumer preferences, Chobani added more yogurt products with reduced or zero sugar. In addition, Chobani has followed the trend for non-diary, plant-based alternatives. It released Chobani Oat, a product line that uses oat milk. To cater to customers who are lactose intolerant, Chobani created a lactose-free yogurt.

The company has diversified and now sells coffee and coffee creamer. In addition, it has launched a line of probiotics yogurts and beverages.

IPO Plans

Chobani publicly filed a Form S-1 registration statement with the SEC. This is an essential first step toward becoming a public company. It highlighted its corporate purpose: “Chobani is driven by a simple yet powerful mission: making high quality, nutritious food accessible to more people while elevating our communities and making the world a healthier place. In short, to provide good food for all,” the document stated.

Chobani plans to list its shares on the Nasdaq Stock Exchange under the ticker symbol “CHO.” The plan is for Mr. Ulukaya to remain CEO following Chobani’s public debut.

Legal and Regulatory Challenges Ahead

Navigating an IPO and managing the day-to-day legal challenges of a food company requires strong legal advisors. This legal help usually comes from a combination of outside law firms as well as the company’s in-house legal department.

Chobani’s general counsel Kathleen Leo brings a wealth of in-house and corporate law experience to the table. Ms. Leo previously served as the chief legal officer of Gilt Groupe, a shopping website focused on fashion items.

Like the yogurt maker’s CEO, Ms. Leo has an employee-centric approach to leadership. In corporate America, Mr. Ulukaya has a reputation for promoting compassionate leadership.

“What I am most proud of is that Chobani is a people company,” Mr. Ulukaya remarked. “We run the company the way we want to run it, with the motive of nothing but good.”

The company has fought several lawsuits in recent years relating to brand labeling. These lawsuits allege that Chobani uses deceptive labels that confuse customers and make its yogurts appear healthier than they are.

The Popularity of Consumer Goods and Food IPOs in 2021

IPO activity in 2021 was strong, and the momentum is likely to continue in 2022. While IPOs occurred across a wide variety of industries, it was prevalent in consumer goods and food companies. Some prominent examples included Poshmark, Oatly, the Honest Company, Warby Parker, Rent the Runway, and Allbirds.

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Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.

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Carpenter Wellington PLLC

Carpenter Wellington PLLC

Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.

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