With sales of $1.4b and a solid market position in the US and Australia, Greek yogurt brand Chobani joins a long list of start-ups going public.
Chobani was founded by a Turkish immigrant in 2007 who bravely invested in a yogurt plant Kraft Heinz was selling in Columbus in 2005.
Like many success stories, Chobani is hardly conventional. Besides its creation of the Greek yogurt category and a laser focus on chain grocery; marketing, sales, insights are combined into one unit to hasten decision making. In 2016 the founder pledged that all employees would receive a stake worth 10% when the business goes public.
Chobani is a very good example of a food business that has ‘profited’ enormously from the swing to health and nutrition. It also has huge mileage internationally as there are many markets where the brand has yet to enter.
I use the word ‘profit’ liberally. Actually Chobani has lost money for the last 5 years. In 2020 the business was $59m in the red.
Chobani is not in exactly the same categories as Oatly, a non dairy milk brand, that went public earlier this year, however they are close. Their target consumers overlap demographically, and share similar health needs.
Oatly’s focus was coffee shop channel where it won recommendation from Baristas. This brand awareness gave it impetus into the supermarket channel, and a premium positioning. Oatly is also more international, not simply because of its Swedish heritage but has developed a strong footprint in Europe and built plants in the US and Asia.
Oatly has also been adept at marketing, and like Chobani (and Tesla) largely eschewed traditional advertising relying on word of mouth and endorsements. This hype pumped up its IPO. However, the stock has since dropped considerably this year. It’s now trading at around half its IPO.
I will not be alone in thinking Chobani and Oatly could sit together as one business. I suspect the new CEO at Danone may be looking closely too as he spies a future growth strategy. Danone’s geographic presence in markets like Russia for example would benefit a brand like Chobani, I wonder?
Chobani’s Nasdaq ticker will be ‘CHO’. I doubt whether the founder knows its Japanese slang for ‘very’? Very in-demand and hopefully not Very over priced?