06/21/2012 11:05 am ET

Old Factory, Snap Decision Spawn Greek-Yogurt Craze

Hamdi Ulukaya was managing his small cheese company in Johnstown, N.Y., in 2005 when he stumbled upon an advertisement that would change everything. For sale: yogurt-making plant in Columbus, N.Y.

A native of Turkey, Mr. Ulukaya decided the next day that he wanted to buy the former Kraft Foods Inc. KFT +0.74% facility. Five months later, he made that happen using loans of less than $1 million, including one backed by the Small Business Administration.

The investment in the plant led him to create yogurt company Agro Farma Inc., maker of the brand Chobani, which means "shepherd" in Turkish and Greek. He later renamed the company Chobani.

The Greek-style yogurt landed on store shelves in 2007 and is widely credited with starting a craze in the U.S. Chobani is now the No. 3 manufacturer of nonfrozen yogurt in the U.S., with about $745.6 million in retail sales, says market research firm SymphonyIRI Group Inc. The only companies ahead of it are Yoplait and Dannon, giant brands that each have more than $1.2 billion in annual retail sales, according to the SymphonyIRI. (Yoplait is controlled by General Mills Inc., GIS +0.49% and Dannon is owned by Groupe Danone SA.)

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