CHOBANI BUSINESS MODEL INVESTIGATION AMBER JEAN SCHWARZ CONTEXT & DEPARTURE POINTS

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1 CHOBANI BUSINESS MODEL INVESTIGATION AMBER JEAN SCHWARZ CONTEXT & DEPARTURE POINTS

2 A cup of yogurt won t change the world, but how we make it might.

3 Theme The focus of this report is to examine the working of a successful business model in the food and beverage industry. The goal is to identify the key aspects that made Chobani uniquely successful in their early years and what continues to set them apart from their competitors.

4 Context Hamdi Ulukaya was a Turkish immigrant who purchased a old Kraft's yogurt factory in 2005, with the dream of making it into an authentic Greek yogurt factory. Hiring back four employees from the plant and a yogurt master, they spent 18 months designing the perfect Greek yogurt. The concept came from the yogurt that Hamdi s mother, when he was a child she would make Greek yogurt from scratch. Due to it s unique packaging the product was an instantaneous success. Over the years the company has expanded into a second plant, a cafe and numerous products all designed with the concept of simple, nature ingredients. Today it is the top selling Greek yogurt in the USA. Hamdi has a desire to improve the world, which is the foundation of his company and one of key aspects that aids in its success.

5 Chobani was founded on the belief that people have great taste they just need great options - Handi Ulukaya

6 Key Value Proposition Chobani does not have a mission statement, however it is clear to see what their goals and values are. Chobani what s to aid consumers to live the most phenomenal life they can. To do that they produce the purest product possible. Through assuring every step of the process is as beneficial to the whole system.

7 Value Proposition Key Partners -Retail Partners -Delivery Providers -Local Producers -Employees Key Activities -Yogurt Production -Packaging -Delivery -Advertising -Products with easy use packaging -Nutritious and healthy product Key Resources -Branding -Packaging -Acceptance Value Proposition -Variety of flavours and products -Healthy, chemical free products -Products that fit into trending food concerns -Value per dollar -Locally sourced ingredients -Inclusive work place Customer Relations -%100 Product Quality -Online Website -Online Blog Channels -Grocery Stores -Convenience Stores Customer Segment -Retailers -Parents -Foodies -First Timers -Health Conscious Shoppers Cost Structure -Development -Maintenance -Employees -Ingredients -Marketing Revenue Stream -Ads -Products Sale

8 Key Partners A key partner for Chobani are their dairy providers. They specifically sources milk from rbst and GMO free cows, a current trend in food products. To maintain a commitment to positive and humane treatment of cattle, Chobani paying an increased rate to it s farmers. The humane treatment of animals is an ethical and moral imperative. A large part of Chobani s success is the due to the effort and partnership of it s employees. Chobani creates a strong bond between employees and company by providing for them in return through above minimum wage pay, full health care for individual and families, disability insurance, mental health care, vacation and paid time off, gym memberships, free lunches and 401K plan.

9 Key Activities A key activity to providing customers with nourishing, nutritional dairy based products is making it available to customers. Through the locations they are offered, main grocer stores. As well as expanding in products. Packaging such as the Flip allows for variating snack options. As well as the new flavored dips and drinks, customers have a greater opportunity to explore flavours and meals as well as add health and pure foods to their daily lives. Advertising is one of the most influential actions that contributes to revenue stream and customer relationships. Chobani released an advertisement video portraying a same sex couple. This allowed for the company to voice their values of equality.

10 Value Proposition The core value brought to the consumer is trust and security in their products and brand. The products list multiple benefits that appeal to modern food trends and health benefits. - Real Ingredients - Natural Sweeteners - No rbst* - Always Less Sugar - Non-GMO Ingredients Customers also have the benefit of knowing that they are supporting the charitable organization Chobani aids, the workers at chobani and humane treatment of cattle.

11 Hamdi Ulukaya s believes that his company should have a positive benefit for every stakeholder with in the products life cycle. The company focuses on creating a great product that will nutritionally benefit the consumer. While the company also focuses on creating an environment that positively affects their employees and measures that will have a ripple effect to benefit the world. In 2016 Hamdi gave his employees %10 of the companies shares which is estimated at $3 billion. If the company goes public or is sold more average shares will be worth approximately $150,000 while long time employees will receive $1 million. The act also represents the value the company has for it s workers. Employees work mentality changes for a desire to achieve a pay check, to building a successful enterprise when they are made investors in the business.

12 An example of their value to improve livelihoods, Chobani has hired approximately 300 Syrian refugees to work in their factories. Providing them with transportation, translators and salaries that pay above minimum wage.

13 Customer Relationship Customers have an expectation for the company to maintain their promise of 100% quality in every product. In 2013 their yogurt caused consumers to become ill. They aired a voluntary recall of their product. Following the illnesses Chobani and a third party both preformed an aggressive, statistically significant series of tests of the products to determine the cause of the default and correct it. For a relatively low cost the company keeps itself relevant in it consumers life through one of their websites that provides users with receipts that use Greek yogurt as an ingredient. Allowing them more access and varieties of methods to add nourishments to their diet. The difference between purchasing a competitors product and that of Chobani s comes down to personal preference and the value. When it comes to purchasing the product the customer receives the extra benefit of knowing they are supporting the Chobani company and the value the hold.

14 Customer Segment Chobani s beliefs are that everyone is equal and deserves healthy, beneficial and flavourful yogurt. They recent released snack sized products geared towards children. The packaging contain imagery of their heroes, such as spider man and Winnie the pooh. While the brands appeal to parents, and their desire for chemical free and nourishing products and easy use packaging. The characters on the products appeal to the imaginative and joyful hearts of children. Currently there is a trend for natural, GMO free, organic, and chemical free products. These consumers are often, healthy, environmentally and socially minded. These users are growing in the millenniums, parents, and high earing individuals.

15 Key Resources Branding their core values is their strongest resource. Local sourcing of dairy products and fruits and vegetable are essential for achieving their desired values. Pure, wholesome, quality, valued, are all words that can be used to describe Chobani s product. They can also be used to described their worker and the environment they craft in. Chobani has a Mediterranean Greek bar in Soho that opened in It features plain Greek yogurt with seasonal hand picked ingredients for unique values. As their first retail space, it functions as their direct connection between the customers and workers. Allowing fans to directly engage with Chobani personally as a company. Branding through advertising demonstrates their core values of being honest and pure with their real and relatable advertising. Their packaging is what made them first noticeable when they arrived in stores. They are innovative and intriguing, keeping a head of the competitors.

16 I believe that as an entrepreneur, when you share success, it grows. - Handi Ulukaya

17 Distribution Channel Customers are reached through media coverage and advertisement. Most customers interaction are through their local food grocer. Chobani expanded their reach in 2012 by becoming an Olympic sponsor for the U.S. team. Continued it s support in the 2016 Rio Olympics and Paralympic Games. Customers are reached Chobani s products through their local retailers. The products can be found in the dairy section, and pre-made/grab and go sections of food stores.

18 Revenue Stream/ Cost Structure Chobani is the number one seller of yogurt in U.S.A. an aiding factor is their competitive prices. Their prices are average to their competitors, meaning the customer doesn t need to pay for the high quality ingredients used. User purchase the product through retailers either online or in stores depending on the company. Chobani is a private company, therefore their costs are not public record. The company is estimated to be valued at 3 billion to 5 billion dollars. Theorizing one of the larger cost expenses are, the disposing of whey a toxic by product of the manufacturing. Advertising, and man power.

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