Chobani is schooling small food startups on big business culture with $25,000 grants
Chobani is fueling small food start-ups.
The Greek yogurt giant is spoon feeding several small businesses a $25,000 equity-free grant in addition to serving up valuable finance, sales and marketing advice to help grow their businesses.
The Chobani Food Incubator, as it’s called, received more than 550 applications for seven spots this year and selected a new batch of entrepreneurs including Chloe’s Fruit, soft serve treats and fruit pops made with just three ingredients; Farmer Willie craft ginger beer; Grainful, which produces frozen entrees and meal kits with steel-cut oats; LoveTheWild frozen seafood; Pique Tea Crystals, which uses super plants to make tea; Rumi Spice, a saffron producer; and Snow Monkey, makers of vegan ice cream. Chobani has no stake in any of the businesses, and is solely doing the effort to “pay if forward.”
“We want companies that make products that provide healthier alternatives, more affordable price points, and purpose-driven companies that share a commitment to sustainability and social impact,” Jackie Miller, Director of the Chobani Food Incubator, tells Moneyish.
“We look for a product already in market. There’s no minimum revenue,” she adds, of qualifications for start-ups who can apply annually for funding. The money, she suggests, “could go toward a product line expansion or explore new product development. The name of the game is growth and hiring for things like sales, investing in e-commerce when it makes sense for the product, and developing their product line.”
Chobani, the best-selling Greek yogurt brand in America, rakes in more than $1 billion in annual sales but the brand comes from humble beginnings. The company’s founder, Hamdi Ulukaya, 44, came to the US from Turkey 23 years ago on a student visa without speaking a word of English. When he started the company, he was able to get a regional bank and the Small Business Administration to split the risk of a million-dollar loan that got Chobani off the ground, allowing Ulukaya to hire his first few employees. Ulukaya has long been an advocate for creating jobs, especially for immigrants in America. Today, 70% of Chobani employees are American and 30% are immigrants and refugees. Last year, he gave 10% of the company to its 2,000 employees so long-term workers could get stock valued at $1 million or more.
As of now, the Food Incubator isn’t a way for Chobani to vet prospective small businesses to buy.
“We’re not looking for any return on investments. It’s a founder friendly program for the time being,” Miller confirms.
Last year, Chobani funded brands like chickpea-based pasta company Banza, which enabled them to start distributing nationally.
“The grant has allowed us to further invest in R&D and product development,” says Brian Rudolph, co-founder and CEO of Banza.
Similarly, Cisse Cocoa Co increased its store presence from 2,000 to 4,500 doors with the $25,000 grant. The six companies that participated last year raked in a total revenue of $3 million combined in 2017, an increase of 60% in distribution. During the program, the companies were able to expand their product portfolio and distribution, secured relationships with national retailers and increased staff and network with more than 75 internal mentors in sales, marketing finance and manufacturing.
This year’s new crop of small businesses, like New York City-based Chloe’s Soft Serve Fruit, is already on track with setting new business goals.
“We built this team of people and now we’re looking to help guide our team to be able to take it to our next level,” says Michael Sloan, co-founder of Chloe’s, which started off as just a retail smoothie and ice pop shop in Flatiron that’s since expanded into 10,000 grocery stores nationwide.
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