WHOLE FOODS WON'T SELL CHOBANI GREEK YOGURT AS OF EARLY NEXT YEAR
c.2013 New York Times News Service
Together, Whole Foods and Chobani have become two of the biggest success stories in the food business in the past decade, but now they are parting ways.
Whole Foods said on Wednesday that as of early next year its stores would no longer stock Chobani, primarily because the explosion of Greek yogurt brands has made the chain more selective in how it allocates its prized refrigerated shelf space.
Chobani, which was founded in 2005 by Hamdi Ulukaya, a Turkish immigrant, and has grown to more than $1 billion in annual sales, helped propel the Greek yogurt craze. Now, Greek yogurt is made by companies like Dannon and PepsiCo, and retailers are struggling to keep up with the increasing number of brands.
“Show me something new,” said John Mackey, co-chief executive of Whole Foods, as he walked past the gleaming yogurt case in the company’s new store in Brooklyn on Tuesday.
The Wall Street Journal, which Wednesday reported Whole Foods’ decision to drop Chobani, attributed it to the yogurt maker’s use of milk from cows whose feed is derived from genetically engineered crops, or GMOs, like corn and soybeans.
Whole Foods has said it will require products sold in its stores to disclose whether they contain such ingredients by 2018. But Robin Kelly, a spokeswoman for the retailer, said on Wednesday that the issue was one of several considerations.
Kelly said the company had asked all of its Greek yogurt suppliers to devise new products and flavors that would distinguish what Whole Foods offers.
“We are always evolving our product mix to make sure we are meeting our shoppers’ needs, and in this case with Greek-style yogurt we are making room for more organic and non-GMO” options, she said.
That echoed a statement by the company that said it was seeking “exclusive flavors, non-GMO options and organic choices.”
The chain still carries other brands that use GMO-related ingredients.
“At this time, Chobani has chosen a different business model, so Whole Foods Market will be phasing Chobani Greek Yogurt out of its stores in early 2014 to make room for product choices that aren’t readily available on the market,” the statement said.
Ulukaya said in a telephone interview from Twin Falls, Idaho, where Chobani has a production facility, that his goal was to democratize Greek yogurt.
“I come from a dairy farming part of Turkey and grew up with yogurt and eating this simple kind of food, and when I came here I couldn’t understand why in order to find good-tasting yogurt you have to go to some specialty store to find it,” he said. “So the foundation of my business model and my philosophy is that we are going to make yogurt that is delicious, nutritious and accessible to everyone.”
With 370 stores, Whole Foods does not represent a big part of Chobani’s business.
Whole Foods has not said it will ban products containing genetically engineered ingredients, only that it will require them to be labeled as such.
Ulukaya said he did not know exactly why Whole Foods had decided to end their relationship.
“That’s a question for them,” he said.
GMO Inside, a group that advocates for the labeling of foods containing such ingredients, has been pushing Chobani to give feeds that are made from non-GMO grains to the more than 78,000 cows that produce the milk it uses in its yogurt. But the company has said it cannot find enough of such feed.
Finding animal feed that does not contain biotech ingredients is a challenge, according to organic food makers like Stonyfield and Organic Valley and farmers who raise livestock. Standard feeds typically contain corn and soy, and more than 90 percent of those crops in the United States are grown from genetically engineered seeds.
“The farmers need to be able to find those feeds and feed it to their cows — and the economics around it need to make sense for them,” Ulukaya said. “Now these feeds are just not available.”