US food maker Chobani found an enthusiastic market for its products in Australia. The company is now investing in local manufacturing capabilities for oat-based products. This will enable Chobani to continue to expand into the plant-base category.
19 August 2021
Chobani is the No. 1 selling yoghurt brand in the US and Australia.i
In this case study, Lyn Radford, Chobani Australia Managing Director, explains why the company set up its first international venture in Australia:
- Australian farmers and producers are known for high-quality, safe food.
- Robust food safety standards underpin Australia's reputation as a trusted international supplier.
- Preferential access to Asia-Pacific markets through Australia's network of Free Trade Agreements.
Growing production and local employment
Chobani entered the Australian market in 2011. The company bought Victorian dairy company Bead Foods, the producer of Gippsland Dairy yoghurt. It tripled production capacity and increased staff and services at the Dandenong South facility.
'We've been making Chobani yoghurts here since 2012,' says Radford. 'We were making 25,000 cases a week when we first started producing Chobani. Today, we are producing more than 50,000 cases a day across all our ranges.
'We grew very fast. We now have about 270 staff across the business.'
Chobani is expanding its Victorian operations, adjacent to its current site. The new facility will consolidate four production and logistics plants and offices into one. It is scheduled to open in mid-2022.
A great product starts with great ingredients
Victoria is a natural fit for Chobani as Australia's largest dairy-producing state. Premium milk is paramount to the company's success. Chobani's Greek yoghurt uses a high proportion of milk in the production process, compared to other varieties.
'A great product starts with great ingredients,' says Radford. 'Australia has a wealth of riches in food quality. It's a gold mine of ingredients, especially high-quality milk.
'Food safety standards here are some of the highest in the world. There's a huge amount of trust in Australian-manufactured food products.'
Taking advantage of Australia's wide-ranging FTAs
Food security is a prominent concern throughout Asia-Pacific, a target market for Chobani.
Chobani exports to Malaysia, Singapore, Thailand, the Maldives and China. The Asia-Pacific region will account for two-thirds of the global middle class (3.5 billion people) by 2030 (Source: World Economic Forum). This will push demand for food and beverages.
Chobani plans to expand its footprint with the help of Australia's network of FTAs.
'Australia has so many great FTAs with the Asia-Pacific,' says Radford. 'The FTAs take away the cost of exporting – removing or reducing barriers, such as tariffs. We don't want to be an expensively priced niche player. Our aim is to supply better food for all people.'
Eyeing the alternatives, diversifying the product line
Chobani is tapping into the worldwide trend for plant-based alternatives. The company is investing to manufacture oat-based products in Victoria.
'Oat is our big player right now,' says Radford. 'Plant-based milks will allow us to move into other areas, like ice cream and drinks. There's big demand for non-dairy-based products in Asia. Local production means we can adapt and innovate quickly.'
The new Dandenong South facility will include a high-tech research and development hub. 'This scalability pathway is important for us from an innovation perspective,' she says. 'We feel confident innovating in a market like Australia because of its regulatory environment.'
Savvy market insights from Austrade
Austrade has worked with Chobani as it rolls out its expansion plans.
'Austrade is helping our growth aspirations across the region,' says Radford. 'The experts on the ground are a great resource. They let us know about government grants or legislative changes happening in the market. They helped us source oat suppliers in Australia.'
Chobani has partnered with Australian property developer Aliro to build its new facility. 'We had to get approval from the Foreign Investment Review Board,' she says. 'Austrade helped us navigate that. There were a lot of changes as COVID-19 hit.'
Working with – and for – the community
Chobani is driven by a strong sense of community. The company sources locally made ingredients and packaging, where possible, for its all-natural, preservative-free yoghurts.
Chobani is passionate about strengthening the communities it calls home and making good food accessible to everyone.
Chobani has been supporting Dandenong South Primary School since 2013. It provides yoghurt and fresh fruit to students through the school's Breakfast Club program.
'We believe that all children should have access to a nutritious breakfast,' says Radford.
Chobani also manufactures fresh produce every week for Foodbank, Australia's largest food relief organisation. Since 2012, Chobani has donated the equivalent of over 11 million meals for Australian families. It still works closely with Foodbank to support its mission of putting an end to food insecurity.
The idea of giving back is central to the philosophy of Chobani's founder Hamdi Ulukaya. A Kurdish immigrant to the US from Turkey, Ulukaya created the Tent Partnership for Refugees. It is a network of more than 130 major businesses worldwide pledging to provide work opportunities for refugees. Woolworths is the first Australian company to join the initiative.
Caption: Chobani founder Hamdi Ulukaya (middle) with staff at Chobani's Australian factory.
Encouraging the next generation of food makers
Chobani has run an incubator program to mentor local, socially responsible food startups.
'We brought in 5 small companies on a special 4-month program,' says Radford. 'We took them through all aspects of our business. This gave them the expertise to scale up and contribute to the food landscape. We are committed to strengthening the industry.'
Participants also received a small, equity-free grant to help kickstart their journey. Radford proudly notes a recent mentee has signed a deal with a major Australian supermarket to expand their spice range.
'There's certainly no lack of talent in Australia,' she says.
i Nielsen Total US xAOC, week ending 07.03.21, includes dairy & non-dairy yogurt. Nielsen ScanTrack, Australia Grocery Scan, week ending 11/07/21, includes dairy & non-dairy yogurt).
About Austrade
The Australian Trade and Investment Commission (Austrade) is the Australian Government's international trade promotion and investment attraction agency.
We deliver quality trade and investment services to businesses to grow Australia's prosperity. We do this by generating and providing market information and insights, promoting Australian capability, and facilitating connections through our extensive global network.
To discover how we can help you and your business, visit austrade.gov.au or contact us on 13 28 78 (within Australia).
Disclaimer
Whereas every effort has been made to ensure the information given in this document is accurate, the Australian Trade and Investment Commission does not provide warranty or accept liability for any loss arising from reliance on such information.
©Commonwealth of Australia 2021
