WASHINGTON – Chobani Yogurt was definitely not Greek to New York’s two U.S. Senators — as millions of American kids may soon learn.
Chobani is the upstart, upstate Greek yogurt firm that’s come out of nowhere to make its Turkish immigrant founder a billionaire. And due to lightning-fast work by Sens. Chuck Schumer and Kirsten Gillibrand, it may find a lucrative spot in the $ 11 billion federal school lunch program that serves meals in 100,000 schools nationwide.
The Department of Agriculture has approved Greek yogurt for a pilot program in four states, including New York. Chobani and other competing firms have until Monday to show the feds different versions of what they’d serve, and then await selection of the winners.
Landing the pilot was an impressive coup for the budding dairy industry – and for its champions in Washington.
The Agriculture department often takes years to assess a distinctly new product. The tofu industry waited a decade before an OK.
But the decision on Greek yogurt came in eight months.
Bill Trojan/ASSOCIATED PRESS
Chuck Schumer digs in to the treat that seemed like a natural fit for the New York senator.
“This is unusual, it happened very fast,” said Jerry Hagstrom, a veteran Washington journalist and expert on the U.S Department of Agriculture (USDA), which oversees the mammoth school lunch program.
“I remember only one thing vaguely similar, involving serving bison meat on Indian reservations.”
So what happened?
Chobani, the Greek yogurt giant founded by former New York City resident Hamdi Ulukaya, 40, hired a Washington lobbying firm, including two former high-ranking Agriculture officials. More importantly, Ulukaya, who moved upstate in 1994 to work on a farm, reached out to the senators.
For Schumer and Gillibrand, It seemed a New York no-brainer: nutrition for school kids everywhere and business for both a booming new industry and the dairy farmers it depends on since Greek yogurt uses more milk than other kinds of yogurt (and is thus more expensive). But there were two hurdles.
First, the Agriculture bureaucracy prefers lengthy analyses of new products pitched to the school lunch program. Second, its standards would make it more costly for schools to choose Greek yogurt over regular yogurt since the rules don’t account for the fact that Greek yogurt has a higher protein value making smaller, less expensive sizes an option.
Mike Groll/ASSOCIATED PRESS
The Chobani plant in South Edmeston, N.Y., has anchored upstate’s yogurt boom.
So Schumer went straight to the top with a letter to Agriculture Secretary Tom Vilsack on June 18, 2012.
“Who’s your best guy?” Schumer said he asked Vilsack, wanting to know which Agriculture official would be the best person to deal with.
After at least three calls from the persistent senator, Vilsack helped arranged a Sept. 20, 2012 meeting in Schumer’s Capitol Hill office with Kevin Concannon, the key official for food, nutrition and consumer services.
Concannon declined to discuss the session but admitted that the approval process for adding a new food to school lunches is complex.
“You can’t hide behind a bureaucratic wall,” Schumer said he told him.
It was then, Schumer said, that his frustration with the USDA process and yogurt regulation prompted his suggestion of a pilot in a few states, especially since Greek yogurt is now a proven and popular product. Concannon agreed to at least bring that notion back to colleagues.
Sen. Kirsten Gillibrand has lobbied to include the New York-manufactured treat in the meals served at 100,000 schools nationwide.
There was subsequent prodding by Schumer staffers and more overt lobbying by other members of the New York Congressional delegation including Gillibrand and Republican Rep. Richard Hanna, whose district includes Chobani’s Norwich, New York headquarters.
Republican Sen. Mike Crapo of Idaho, where Chobani last year completed the world’s largest yogurt plant, was also active.
Michelle Obama’s nutrition push didn’t hurt, either, with the department on the way to dumping junk food and sugary drinks from the program.
By January of this year, the USDA told Schumer it would try a Greek yogurt pilot in New York, Idaho, Arizona and Tennessee, and set a deadline of Monday this week for yogurt makers to bid with their proposed products.
The winning company will confront the challenge of Greek yogurt’s very perishable nature – a key reason why USDA chose states for the pilot that are near both yogurt plants and warehouses. It plans to monitor how distribution will work.
After the winning vendors are selected, interested New York school districts would apply to the state Office of General Services. Kids could be digging in to the dairy treats as soon as this fall. Schumer said he’s contacted several New York districts to plant the idea.
The potential financial upside for the industry – and New York dairy farmers – is obvious. With virtually no revenue just five years ago, it now generates nearly 40 percent of the $ 6.5 billion in annual U.S. yogurt sales. There are 28 plants upstate in what Businessweek magazine calls “the Silicon Valley of yogurt.”
And while its lobbying expenditures make the infant industry a piker by Washington standards, Chobani is stepping up its outlays.
Meanwhile, you can bet the ranch, or dairy farm, that a grateful industry will share its good fortunes with contributions to the elected officials who provided ample help.