Greek yogurt revives NY's troubled dairy industry

View of new construction at the FAGE USA Dairy Industry plant in the Johnstown Industrial Park, on Wednesday June 8, 2011 in Johnstown, NY. ( Philip Kamrass / Times Union)

A decade ago, the domestic market for Greek yogurt, a thicker, more protein-laden version of traditional mass-market yogurt, barely existed.

Within the past five years, however, it has exploded, and that's been great news for New York's dairy farmers.

That's because it can take three pounds of milk to make one pound of yogurt.

"It's a milk-rich product," said one industry spokeswoman.

Fage, which began flying its yogurt in from Greece in 1998, suspected the market was big enough to justify a plant in the United States.

That plant opened in Johnstown in 2008. Meanwhile, another Greek-style yogurt plant, operated by Norwich-based Agro Farma, began producing Chobani Greek yogurt at a former Kraft Foods plant in South Edmeston, Otsego County, in 2007.

Today, Chobani says it has become the best selling yogurt in the United States. Fage says it isn't far behind, ranking fourth. The boom comes despite their steeper prices.

And dairy farmers are scrambling to meet demand.

"For the first time in over a decade, we have reason to be optimistic about dairy in the state of New York," said Julie Suarez, director of public policy for the New York Farm Bureau.

Both companies, meanwhile, have plans to expand.

Production of yogurt in New York increased by 57 percent from 2004 to 2010, according to figures from the state Department of Agriculture and Markets. But the amount of milk used in manufacturing yogurt statewide quadrupled, rising from 149 million pounds in 2004 to 665 million pounds in 2010, reflecting the relative gains by Greek-style yogurt.

While Chobani labels its products "Greek yogurt," Fage officials say their company, based in Athens, produces true Greek yogurt. Whether Greek or Greek style, the yogurt's production is a boon for dairy farmers.

"Greek-style yogurt uses a lot of milk," said Jessica Ziehm, spokeswoman for the state Department of Agriculture and Markets. "It uses three to four times the amount of milk that regular yogurt requires."

\

And the result has been popular with consumers.

"What people are enjoying most about Greek yogurt is the flavor and the rich texture," said Mona Golub, spokeswoman for Price Chopper supermarkets. But she said the health benefits also are a strong selling point.

It's natural, with no artificial flavors or ingredients, and it has little or no fat or cholesterol. Referring to Chobani, she said the probiotics -- beneficial bacteria that help digestion -- are another attraction.

And Greek-style yogurts are typically low in sodium.

Tara Morgan of Hannaford supermarkets said the perception that yogurt is a health food "is certainly valid."

The 14 grams of protein in a serving of Chobani is twice that found in regular yogurt, Morgan said.

And demand for Greek yogurt has grown strongly.

"At one point we were having trouble keeping it in stock," Morgan said.

When Price Chopper ran a 10 for $10 promotion on Chobani, it quickly sold 350,000 units, Golub said.

With such demand, it's no surprise that both Fage and Chobani are planning to expand.

Russell Evans, a spokesman for Fage U.S.A., said the company plans to double the capacity of its 145,000-square-foot Johnstown plant, which currently produces 85,000 tons of yogurt annually.

While he had no dollar value on the expansion, the company has already spent $148.3 million in Johnstown, which is 45 miles northwest of Albany. The plant employs 170 people.

Fage is adding cold storage capacity, said Peter Smith, who heads the Johnstown Planning Board.

The yogurt boom has been good news for the city, Smith added.

The community, and neighboring Gloversville, had idle water and sewage treatment capacity that had been built for the leather industry, which subsequently collapsed.

"Water rates were going through the roof," to pay off the debt to build the treatment plants, Smith said.

Now, Fage and another Greek company, feta cheese maker Euphrates, are "buying water from our water system, putting effluent into our sewage treatment system, and they're buying milk from our dairy farmers," Smith said. "The whole turnaround has been a godsend."

Chobani, meanwhile, plans to build a second plant, although it hasn't yet said where it will be located.

The company currently employs 670 people and produces 1.2 million cases of yogurt a week at its 80,000-square-foot plant, said spokeswoman Nicki Briggs.

Both companies say the high quality of New York dairy farmers' milk drew them to the state.

Overall, the number of plants manufacturing yogurt in the state grew to 27 last year from 18 in 2004, according to state Agriculture Department figures.

In April, Miami, Fla.-based Alpina Foods announced plans for a $15 million yogurt plant that will employ 50 people at Genesee Valley Agri-Business Park in Batavia, Genesee County.

The growth of the state's yogurt business has been good for farmers.

"Anything that increases the consumption of dairy products is good for New York's dairy farmers," said Dan Wolf, a dairy farmer who is president of the Upstate Niagara Cooperative in Buffalo. "If the yogurt's made in New York state, that's even better."

Read more: http://www.timesunion.com/business/article/Greek-yogurt-to-the-rescue-1420528.php#ixzz2Mg2V4pCg