Letter to Athens: Greek Products Miss U.S. Market

NEW YORK – What’s all this fuss about Greek yogurt in the United States? Coming to New York for a two-week respite from the insanity of Athens and the Greek economic crisis also provided a chance to find out why Americans were all gaga over yogurt that Greeks take for granted.

The king of the hill is Chobani, owned by a Turkish-American, Hamdi Ulukaya, who stole the American market from the Greek turncoat company Fage, which gave up on its own country. Fage, like most Greek companies, didn’t want to pay to advertise and believed God would spread the message about its product.

Fage pioneered Greek yogurt in the United States 24 years ago, putting it on the shelves of Titan Foods in Astoria, N.Y. Where it was gobbled up fast, and not just by Greeks of the Diaspora, but customers who soon realized despite its exorbitant price that it was a lot better than the watery version being sold by American companies.

Chobani, begun in 2005, sold its yogurt for three times less than Fage. Ulukaya has ridden a wave of free press to be the Greek yogurt god in America so one of my first orders of business was to try what he makes.

It might make a good, coarse pudding but it’s not Greek yogurt, which makes it even more puzzling why Greek companies can’t do better than that in marketing goods that are so far superior that they’re off the chart compared to the competitors.

In a piece in Forbes, it was noted that FAGE couldn’t ship enough yogurt from Greece to accommodate the soaring demand and wouldn’t lower the price to make it affordable to the mass consumer market. The eventual opening of a company factory in upstate New York didn’t do enough to ease the shortages and make the product price-competitive.

Fage in New York sells for about $7 for a kilo, or 5 euros, more than 1 euro, or $1.36 more than in Greece. After tasting Chobani, Fage is worth the price difference and it’s too bad that Fage’s marketing campaign seems to be that of most Greek businesses: none.

Kri-Kri, which makes a good product, said it’s going to try to get a piece of the $7.6 billion yogurt market in America but it’s too late. Seeing the frenzy over Greek yogurt, a lot of other companies have jumped into the fray, most producing stuff you wouldn’t give your dog, full of preservatives, gums, and gunk that destroys the purpose of Greek yogurt.

They give it names that make it sound Greek, hire Greek-American celebrities to add some cachet and essentially beat the pants off Greek companies who just watch it happen.

“We insisted that Chobani be sold in mainstream grocery stores rather than specialty stores, and that it be stocked in the dairy aisle, alongside existing yogurt brands, rather than in the gourmet or natural food isles,” wrote Ulukaya in the October Harvard Business Review. “That’s probably the single most important decision we made.”

Dietician Molly Kimball, writing in the New Orleans Times-Picayune, noted that only in America is Greek yogurt called Greek, and that in the rest of the world it’s referred to as “strained,” referring to the straining process that’s used to remove much of the liquid (which is mostly water and milk sugars), leaving behind a thicker yogurt that is higher in protein.

“Unfortunately, no standard practice exists for labeling foods as containing ‘Greek yogurt.’ This means that products can list Greek yogurt as an ingredient when they actually include very little of this nutritious food,” she wrote.

Chobani has also captured the American sense of taste, that is to say a lack of taste, as consumer don’t want plain yogurt, which is really the healthiest way to eat it, although you can add honey for a delicious and nutritious treat.

“I generally recommend sticking with plain low-fat Greek yogurt, since most flavored yogurts are usually either high in added sugars or artificially sweetened,” she said.

It’s not just yogurt where Greek companies are missing the boat to America: it’s other great Greek commodities such as olive oil, feta, honey, saffron and the foodstuffs Greeks take for granted because they are right under their noses.

In Fairway, a supermarket in Red Hook, Brooklyn, a store about as big an an aircraft carrier, they carry a lot of olive oil: almost none of it Greek. No Altis, Minerva, or Lambda. They sell feta – from Bulgaria and France and Wisconsin – but very little from Greece, apart from one brand I never heard of and which goes for $25 a kilo, about 18 euros, or two to three times that of a superior Greek feta.

Now that the yogurt craze seems to be cresting is the best time for Greek companies to swoop into the U.S. to create the next big thing, but they won’t. The fractured Greek olive oil business will keep selling to Italians, who package Greek oil under Italian names and make Americans think Italian olive oil is the best in the world instead of Greek.

And don’t be surprised if a Bulgarian-American, seeing the opening, comes up with a “feta,” – a name allegedly protected by the European Union – and beats the Greeks at their own game. It already happened with yogurt.