Alpina Foods, the United States arm of a major South American dairy company, is building a $20 million plant in Batavia to make Greek yogurt topped with granola. And state economic development officials are said to be negotiating with another major food maker to set up a dairy products plant in the same area, creating the possibility for what one executive called a “yogurt cluster.”
Often twice as expensive as regular yogurt, Greek yogurt has most of the water and whey strained out, making it richer in protein and giving it the density of sour cream.
National retail sales of the thicker style of yogurt more than doubled last year, jumping to $821 million for a 52-week period ending in October, excluding Walmart stores, according to Mintel. The research firm projects that the strong sales growth will most likely continue this year.
New York’s dairy farmers are among the biggest beneficiaries of the public’s love affair with Greek yogurt, because it takes much more milk to make Greek yogurt than regular yogurt. “This is a ‘once every two or three generations’ situation,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association. “All of the right forces have come together to make it very attractive to build in New York state.”
Data compiled by the New York State Department of Agriculture and Markets shows that the state produced 368 million pounds of yogurt in 2010, nearly 40 percent more than the previous year. Over five years, production rose almost 60 percent. Much of that increase is for Greek yogurt production.
And the growth is continuing. Through a combination of new plants and expansions, within a few years, the state could produce twice as much yogurt as it made in 2010.
“We’re literally building as we speak to keep up with demand,” said Russell B. Evans, Fage’s director of United States marketing.
Fage, based in Greece, is credited with introducing many Americans to Greek yogurt and thereby starting the boom. The company chose to open its plant in Johnstown, N.Y., in 2008 partly because it was close to New York City, where a large community of people of Greek descent made a ready market familiar with their product. But the appeal turned out to be much broader.
The Johnstown plant had an initial capacity of 26 million pounds a year and last year produced 123 million pounds. Its planned expansion, which is expected to take about two years, would allow the company to make up to 352 million pounds a year.
AgroFarma, founded by a Turkish immigrant, began making Greek-style yogurt under the Chobani brand name four years ago at a former Kraft Foods plant in South Edmeston, N.Y. Now the leading American maker of Greek yogurt, the company currently takes in about three million pounds of milk a day, from which it makes a million pounds of yogurt. When the current phase of expansion is done in the spring, the plant’s capacity will increase by about a third, said Mikael B. Pedersen, the chief operating officer of AgroFarma. (Chobani also recently announced plans to build a $128 million plant in Idaho, to better supply markets across the country.)
The Greek yogurt boom has translated into jobs in rural areas of New York that badly need them. Chobani said it currently employed about 900 people in New York and expected to add about 100 more. Fage said it had about 240 full-time employees and expected to add about 150. The new Alpina plant in Batavia will employ about 50 people.
“We went for many, many years in this state with regard to dairy manufacturing generally without seeing any remodeling of plants of any scale,” said Patrick M. Hooker, senior director of industrial development of the Empire State Development Corporation, a state-controlled economic development agency.
Then came Greek yogurt. Mr. Hooker said that yogurt making was a big jobs creator, compared with many other forms of agricultural production.
To make yogurt, farmers have to grow crops, “which are fed to cows, and cows need to be milked, and milk needs to be trucked and processed and cultured and made into yogurt and then trucked again and sent to consumers,” Mr. Hooker said. “It’s a huge multiplier.”
What’s more, because Greek-style yogurt is strained to give it a denser texture, more milk is required to make it. Industry executives said it typically took about three pounds of milk to make one pound of Greek-style yogurt, compared with the single pound of milk needed to make a pound of traditional yogurt.
“The growth in dairy manufacturing, particularly in the Greek yogurt category, has really been a fantastic boon for New York dairy farmers,” said Julie C. Suarez, director of public policy for the New York Farm Bureau, a trade group for farmers. She cited an estimate by Cornell University that New York farmers would have to increase milk production by 15 percent in the next two years to keep up with demand.
Because milk prices are governed by a complex system of federal controls, there is not always a straight line between increased demand and higher prices. Milk prices across the country increased last year, after slumping badly during the recession. Still, the demand from yogurt makers in New York has contributed to higher milk prices, partly through premiums offered by processors to insure high-quality supply.
Ms. Suarez said that farmers benefited from having a reliable market for their milk close by. It gives them security when they make plans to expand their herds and it reduces their transportation costs for the milk.
New York may be the fastest-growing producer of yogurt, but other states have seen production rise as well. California produces more milk than any other state and is the nation’s leading yogurt producer. Yogurt production in California was 620 million pounds in 2009, the last year data was available. That was an increase of 6.5 percent from the previous year.
Tennessee is another state that saw a big jump in yogurt production, partly because of the expansion of a major Yoplait plant in the state.
“Stop and think,” said John Sanford, a dairy regulator with the Tennessee Department of Agriculture, discussing the reasons for the yogurt boom. “It’s nutritious. It’s safe, it’s healthy and it’s delicious. How can you be any better?”
“It’s an indulgent texture, but it’s also guilt-free,” said David J. Browne, a senior analyst for Mintel International Group, a consumer research firm.
Greek yogurt has certainly been healthy for the economy in New York. Two of the leading brands, Chobani and Fage, have their main production plants in upstate New York and are expanding their operations.
Alpina Foods, the United States arm of a major South American dairy company, is building a $20 million plant in Batavia to make Greek yogurt topped with granola. And state economic development officials are said to be negotiating with another major food maker to set up a dairy products plant in the same area, creating the possibility for what one executive called a “yogurt cluster.”
Often twice as expensive as regular yogurt, Greek yogurt has most of the water and whey strained out, making it richer in protein and giving it the density of sour cream.
National retail sales of the thicker style of yogurt more than doubled last year, jumping to $821 million for a 52-week period ending in October, excluding Walmart stores, according to Mintel. The research firm projects that the strong sales growth will most likely continue this year.
New York’s dairy farmers are among the biggest beneficiaries of the public’s love affair with Greek yogurt, because it takes much more milk to make Greek yogurt than regular yogurt. “This is a ‘once every two or three generations’ situation,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association. “All of the right forces have come together to make it very attractive to build in New York state.”
Data compiled by the New York State Department of Agriculture and Markets shows that the state produced 368 million pounds of yogurt in 2010, nearly 40 percent more than the previous year. Over five years, production rose almost 60 percent. Much of that increase is for Greek yogurt production.
And the growth is continuing. Through a combination of new plants and expansions, within a few years, the state could produce twice as much yogurt as it made in 2010.
“We’re literally building as we speak to keep up with demand,” said Russell B. Evans, Fage’s director of United States marketing.
Fage, based in Greece, is credited with introducing many Americans to Greek yogurt and thereby starting the boom. The company chose to open its plant in Johnstown, N.Y., in 2008 partly because it was close to New York City, where a large community of people of Greek descent made a ready market familiar with their product. But the appeal turned out to be much broader.
The Johnstown plant had an initial capacity of 26 million pounds a year and last year produced 123 million pounds. Its planned expansion, which is expected to take about two years, would allow the company to make up to 352 million pounds a year.
AgroFarma, founded by a Turkish immigrant, began making Greek-style yogurt under the Chobani brand name four years ago at a former Kraft Foods plant in South Edmeston, N.Y. Now the leading American maker of Greek yogurt, the company currently takes in about three million pounds of milk a day, from which it makes a million pounds of yogurt. When the current phase of expansion is done in the spring, the plant’s capacity will increase by about a third, said Mikael B. Pedersen, the chief operating officer of AgroFarma. (Chobani also recently announced plans to build a $128 million plant in Idaho, to better supply markets across the country.)
The Greek yogurt boom has translated into jobs in rural areas of New York that badly need them. Chobani said it currently employed about 900 people in New York and expected to add about 100 more. Fage said it had about 240 full-time employees and expected to add about 150. The new Alpina plant in Batavia will employ about 50 people.
“We went for many, many years in this state with regard to dairy manufacturing generally without seeing any remodeling of plants of any scale,” said Patrick M. Hooker, senior director of industrial development of the Empire State Development Corporation, a state-controlled economic development agency.
Then came Greek yogurt. Mr. Hooker said that yogurt making was a big jobs creator, compared with many other forms of agricultural production.
To make yogurt, farmers have to grow crops, “which are fed to cows, and cows need to be milked, and milk needs to be trucked and processed and cultured and made into yogurt and then trucked again and sent to consumers,” Mr. Hooker said. “It’s a huge multiplier.”
What’s more, because Greek-style yogurt is strained to give it a denser texture, more milk is required to make it. Industry executives said it typically took about three pounds of milk to make one pound of Greek-style yogurt, compared with the single pound of milk needed to make a pound of traditional yogurt.
“The growth in dairy manufacturing, particularly in the Greek yogurt category, has really been a fantastic boon for New York dairy farmers,” said Julie C. Suarez, director of public policy for the New York Farm Bureau, a trade group for farmers. She cited an estimate by Cornell University that New York farmers would have to increase milk production by 15 percent in the next two years to keep up with demand.
Because milk prices are governed by a complex system of federal controls, there is not always a straight line between increased demand and higher prices. Milk prices across the country increased last year, after slumping badly during the recession. Still, the demand from yogurt makers in New York has contributed to higher milk prices, partly through premiums offered by processors to insure high-quality supply.
Ms. Suarez said that farmers benefited from having a reliable market for their milk close by. It gives them security when they make plans to expand their herds and it reduces their transportation costs for the milk.
New York may be the fastest-growing producer of yogurt, but other states have seen production rise as well. California produces more milk than any other state and is the nation’s leading yogurt producer. Yogurt production in California was 620 million pounds in 2009, the last year data was available. That was an increase of 6.5 percent from the previous year.
Tennessee is another state that saw a big jump in yogurt production, partly because of the expansion of a major Yoplait plant in the state.
“Stop and think,” said John Sanford, a dairy regulator with the Tennessee Department of Agriculture, discussing the reasons for the yogurt boom. “It’s nutritious. It’s safe, it’s healthy and it’s delicious. How can you be any better?”
William Neuman
Source: The New York Times
*We thank our reader Dionysis K. for the above information!
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