The Rise of the Greek Yogurt Industry in Central New York - NADO.org

These realities have led to an evolution in economic developmentthinking over the years since the “smoke-stack chasing”era of the 1960s and 1970s, to the “small (business) is beautiful”movement of the 1980s and 1990s, when industrial parks becamebusiness or technology parks, and the practice of economicdevelopment was broadened to include more focus on smallbusiness development and incubation in addition to traditionalbusiness attraction and retention activities.In more recent years, emphasis has also been placedon more strategic, bottom-up approaches to generatingjobs, focusing on targeted industry clusters andasset-based development that seek to leverageand enhance a region’s balance sheet and corecompetitive advantages. This reality-based approachmakes a lot of sense, as communitiescan truly spin their wheelsby engaging in a “metoo” strategy of chasingthe flavor of theday without trulypossessing theright asset-mixto compete forthat particularindustry.With this backdrop, the emergence of the Greek yogurt industryin central New York over the past five years is most impressive,if not extraordinary. Two yogurt makers alone—Chobaniand FAGE USA (pronounced Fa-yeh)—have created morethan 1,400 jobs, and have provided an important new outlet forhundreds of dairy farms in New York and surrounding areas. 1(Chobani estimates that it will consume 5 million pounds ofmilk per day by the end of 2012 by itself. 2 )The rise of this industry has provided a much needed economicstimulus to a decidedly rural region, rippling out to thegreater community in terms of additional jobs in transportationand services, and increased local consumer spending fueled bythese expanded payrolls. In economic development jargon,central New York has landed “the big one,” and that is all toorare these days in rural America.As in most cases, there have been a number of contributorsto this success, some of which are state- and communitydriven,and others more a matter of where a region sits on themap. It starts, of course, with a market and the entrepreneurialand business know-how and drive to develop these market opportunities;locational dynamics and logistics (access to supplychains, markets, and workforce); necessary investments in criticalinfrastructure and support systems; and a welcoming businessclimate on the state and local levels.It is also noteworthy that the two major Greek yogurt producersin central New York, FAGE USA, and Chobani, camefrom very different directions. The former is the U.S. subsidiaryof a well-established Greek company that began this story byimporting their product into the U.S. and subsequently decidingto manufacture in Fulton County, 3 New York in order tomeet what they have characterized as the “ridiculously strongconsumer demand” for Greek yogurt in thiscountry. 4 The latter is a start-up business led bya Turkish immigrant who revived a shutteredproduction plant in Chenango County and ina few short years has become the largest Greekyogurt producer in the country and taken theproduct to new levels. In fact, as of 2011Chobani became the number one sellingbrand of yogurt in America, Greek-styleor otherwise. 5Now, another “wave” of yogurt investmenthas hit western New York State,in the Genesee County community of Batavia,as the continued growth of yogurtand Greek-style yogurt inparticular brings otherplayers into the marketincluding Alpina Foods, alarge South American dairycompany, and “Project Wave,” a partnership between PepsiCoand German dairy giant Theo Müller (see Sidebar: Project Waveon page 12). Given the success of this growing Greek yogurtcluster, this story of investment and job creation provides a casestudy on asset-based development useful for regional developmentorganizations and their partners. Just as good yogurtdepends on the right mix of ingredients, so too is the case ineconomic development. And this is a recipe worth sharing.Chobani and FAGE USAalone have created morethan 1,400 jobs andprovided an importantnew outlet for severalhundred dairy farms inNew York and surroundingareas.3