Chobani and Recalls

Hamdi Ulukaya bought an abandoned factory in New York in 2005 and started Chobani yogurt two years later, figuring he could make a better product than what the American companies were cranking out.

Ulukaya grew things to where he was moving well over a million cases of yogurt per week out of his New York warehouse, getting a solid foothold in the market, and even fielding calls with buyout offers.

So things were going very well.

But in 2013 things took a bad turn. The year started out well enough, as Chobani opened a second facility in Idaho to keep up with demand as well as to gain access to western markets. However the dairy inputs (different cows from a different part of the country) used in Idaho were different than what was used in New York, so the resulting yogurt was different, forcing them to adjust the proportions of the ingredients used. This led to delays and then in September a mold contamination problem at the Idaho plant.

The machine at Chobani swung into action, first recalling their product by contacting individual stores for a week or so before issuing the formal recall.

Public relations-wise, several positive steps were taken. They were active on social media, issuing an apology via Facebook that had the yogurt's defective code as well as a head shot of Ulukaya. They also reached out on Twitter and posted an apology letter to their website's homepage. The letter is well-written and thought out, and leads me to believe they had a template in place in order to be prepared for an event like this.

The homepage also had links to the FDA's report and the customer call center.

So Chobani's troubles (and $15 million loss in 2013) seem to connect more with growing pains and not with bad public relations, since they made wise choices to try and keep the public's trust after the mold contamination.

The company seems to have righted the ship, and now their problems have more to do with competition as well as a slowing of the market.