Chobani doesn't rule out IPO, unsweet yogurt flavors

NEW YORK Tue Dec 18, 2012 9:15am EST

1 of 4. Chobani Inc. founder Hamdi Ulukaya poses for a portrait in the company headquarters in New York, December 13, 2012.

Credit: Reuters/Lucas Jackson

NEW YORK (Reuters) - Chobani Inc, the private firm behind the top-selling Greek-style yogurt in the United States, does not want to sell itself to a large company, but it has not ruled out an eventual public offering, or new yogurts with herb flavors.

Just before the opening of its third plant, Chief Executive Hamdi Ulukaya said he wants to stay independent, so the five-year-old company can "do what we love to do". But an IPO is not out of the question.

"We have not spent so much time on that one, but who knows what happens in three or four years when it comes to going public," Ulukaya told Reuters last Thursday at his office in the trendy SoHo neighborhood of New York. The loft-like space was home to couches, pillows, artwork and his two large German Shepherds.

Ulukaya grew up working in his family's dairy business in Erzincan, Turkey. He moved to the United States after college, bought a yogurt plant in upstate New York, and a few years later his Chobani brand became a U.S. top-seller.

Greek yogurt, thicker and richer in protein than the yogurt Americans were used to, has reignited the entire yogurt category. Giants including France's Danone (DANO.PA) and General Mills (GIS.N) are also now in on the action.

Ulukaya said his phone rang a lot in the early years, as other food companies and private equity firms expressed interest in buying Chobani, which will generate close to $1 billion in revenue this year. But he "nicely and respectfully" turned them down.

"From Day One that was not my motive. That's not what I want to do. This is a road that I don't want to exit from," Ulukaya said. "Those conversations have ended now. They all understand that we are here to stay."

His personal goal is to create something lasting.

"My dream would be that Chobani is here today and Chobani is here 100 years from now -- making the same commitment, the same products and making a difference in the world," said Ulukaya, who funds several festivals throughout the year.

FIG, YES; CUCUMBER, NOT YET

In addition to selling packaged Chobani at retailers, the company operates a cafe near its office, where consumers can have yogurt mixtures such as dark chocolate, honey, pistachios, oranges and mint or cucumber, salt and mint.

"What we're trying to do is open the horizon when it comes to yogurt, that it's not all sweet," said Ulukaya, who eats "Chobani soup" every day. Still, savory flavors, such as cucumber, mint or dill-flavored yogurts are not yet on the retail horizon.

"I do feel like there's low-hanging fruit ... with consumers as it relates to what they expect from yogurt," said John Heath, vice president of new ventures and innovation. "Right now they see it as a sweet product. But we definitely feel like there is a lot of room in a savory world."

For now, the company is launching Chobani Champions in squeezable tubes and Chobani Bites, which are snack portions in richer flavors like raspberry with chocolate; fig with orange peel and pineapple with caramel. Also on the menu are Chobani Flips that come with crunchy add-ins like granola.

It is still unclear if Chobani will expand beyond yogurt, though Ulukaya does not rule it out.

"We haven't made those decisions yet because we are just at the beginning of yogurt. We believe yogurt in this country is going to double or triple in the next three to five years," Ulukaya said. Also, anything else Chobani sells will have to be made by Chobani, and it will have to "taste awesome."

(Reporting By Martinne Geller in New York; Editing by Tim Dobbyn)

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