Chobani CEO Hamdi Ulukaya breaks down why the yogurt boom is behind the company's historic $1.2 billion investment despite declining milk consumption and economic uncertainty.

Chobani, a prominent name in the yogurt industry, has announced plans to invest $1.2 billion in the construction of what is anticipated to be the largest dairy processing facility in the United States. This significant investment arrives during a period characterized by economic fluctuations and a noted decline in milk consumption. Nevertheless, Chobani's CEO and founder, Hamdi Ulukaya, remains committed to the expansion, driven by the growing demand for high-quality, nutritious foods.

The new plant, set in upstate New York, symbolizes a deep connection to Chobani's roots as the company originally began in this region. The development is informed by a post-pandemic surge in consumer interest in wholesome and locally-produced foods. Chobani's operations in the United States are mainly supported by domestically sourced ingredients, although some machinery required for yogurt production is imported, predominantly from Europe. Despite potential tariff-induced cost increases, Ulukaya is determined not to transfer these expenses to consumers.

A crucial component of this expansion involves labor, with a pressing need for skilled workers both to construct the factory and to support increased agricultural operations. Ulukaya highlights the challenge of finding a sufficient workforce amid a broader industry struggle, compounded by restrictive immigration policies. Notably, the plan would necessitate around 6 billion pounds of milk annually, a significant share of New York's current production, urging local farms to scale up to meet this demand. Ulukaya stresses the vital role of immigrant labor in sustaining the agricultural and construction sectors during this ambitious growth phase.



Chobani betting big on yogurt with $1.2 billion dairy plant

During this time of economic uncertainty, many companies are rattled, worried, and some are even freezing hiring as we've been reporting. But one business actually is hiring and is building what is said to be the biggest dairy plant in the country. That company is Chobani. This week, they announced a $1.2 billion investment to build what will likely be the largest dairy factory in the United States. And with us now to talk about it is its CEO and founder, Hamdi Ulukaya. Hamdi, thank you so much for being here. Thank you. So this is a time, I mean, we keep hearing it. Uncertainty, uncertainty, uncertainty. The markets are up and down. Investors are rattled. I know your company is not public yet, but companies are battening down the hatches and waiting to see before making big moves. But not you. Why make this expansion? Why take this risk at such an uncertain time? Yeah, we look at the world. Of course, what's happening in the world, Adrienne, is real. And it's a fact that it's concerning from one dimension to another. From the Chobani's eye, I started 20 years ago in a small town upstate New York. And I've seen a lot, you know, ups and downs and tough times. But there are timeless truths, is that, you know, people want good food. People want to feed themselves and their children food with the better ingredients. And that was the bet I made a very, very long time ago. And we see, especially post-pandemic, this accelerating in a really, really dramatic way. So more and more people want simple food, high-density nutrition food. And that growth is really pushing us to make decisions like this to invest. And Chobani's made in New York. Your hat says New York made. We made this hat for the event. Actually, we designed it. Oh, from when you broke ground on Tuesday? Yes. They just broke ground on the factory. Oh, nice. I missed it. You had the shovel and the dirt and the whole thing. Exactly. My son was there. That's a beautiful thing. Oh, he made that bracelet? Yeah. You tell him, I don't think it's too shiny. They were saying off-camera, guys. It says Baba in Turkish, and I have it. What does it say in Turkish? Baba means dad. Dad? Oh, lovely. It's eye-catching as it should be for an eye-catching announcement. So when you say made in the USA, it's all made in the USA? The milk, all of it? Absolutely. I mean, you know, yogurt, fresh food, of course, that's another reason to be made in the USA. We have a plant in South Africa when we started. And we built a really big plant in Idaho. And then we come back to home to Rome, New York, which is only half an hour from where we started. Milk is local data farms. You know, fruit, most of the fruits are within the United States. We'd like to bring it more. There are some products that come from overseas. But the most important thing that we get from overseas is the equipment to build the factory. So how are you being affected by these tariffs? So that's going to be effective. You know, you say $1.2 billion to build this plant. Based on what kind of tax numbers or, you know, tariff numbers, it could be a lot bigger. Because you would have to pay more. Excuse me to jump in, but just to see how this all connects. Tariffs on European equipment that you need would cost more to you because the tariffs would likely be passed on to you. Is that right? Exactly. High-speed fillers, where you filled yogurt cups or the creamers, those are coming from Europe. And there's not going to be, you know, short answer for those. So you're going to pay more. That's reality. The second one is labor. You know, we're in upstate New York. There's a lot of projects happening. You know, Buffalo Bills are building a big stadium. It requires a lot of people. Semiconductor companies building more production. So those are the two things that we worry about is, you know, what's the tariff and can we find enough people to work. Just staying on the tariffs for a moment. If you are going to pay more for the equipment that you need to make your yogurt, are you going to pass that along to the consumer? Will that be reflected in the price of your yogurt? You know, I have been very strongly opinionated. I even wrote an op-ed on this. During the pandemic and post-pandemic is this short answer to the, you know, covering the cost with going to prices is not the right thing to do. Not good for business, not good for consumers. So I have been very strongly opinionated to not to pass the prices to the consumer. So we've been really, really steady on this. I look for long-term. You know, if I can afford to build it, which seems like we can, you know, internally. I look at this not something that I would pass on to the customers. You have been outspoken in the past about efforts to hire immigrants and refugees. Every economist will say big picture, long term or even medium term, immigration is good for an economy. But some will say in the short term, it can affect wages for existing workers. How does that interaction work for you? And also as this crackdown on immigration happens and there are fewer workers potentially, how do you think that will affect your ability to grow? I had my first contractor meetings yesterday at my office here in Soho. And we had two, three companies to come and be selecting. The number one topic is people. Do we have people to work to build this construction, massive projects? And it's a reality. It really is a reality. And I hope Washington hears it and people hear it. The second one is the farms. And if you look at farms, the vast majority of farm workers are immigrants. It's the same thing in Idaho. It's here in upstate New York and between. So between the farm workers and the workers for the construction, we need people. We need people who want to work. And those are refugees and immigrants. And of course, you know, you have to have the legal right to work. And those are the policymakers have to make those, you know, make it available. But I can see one thing can hurt dramatically is if we can't find people, we cannot build these places and we cannot make these farm works. And that is going to affect the prices and inflation. So I hope that message goes on really, really clearly. So without immigration, you can't find enough workers? You can't. Wow. That's the reality. Interesting. That's what I want to learn for you, because you have to hire a thousand people to work at this plant and build it. And you have to build it. And guess what? We will need six, almost six billion pounds of milk when we built this plant. That is the one third of the milk that available in New York. So that means the farmers needs to increase their farms and the small farmers needs to come back. It's a massive economic impact. You need farm workers. Thank you so much. Hamdi Ulukaya, thank you very much. Thanks, Tony. I really appreciate it.

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