Greek Yogurt Empire Breeds In NY - NBC New York

Greek Yogurt Empire Breeds In NY

age's distribution has expanded from specialty stores in the New York City to supermarket chains nationwide

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    Fage yogurt. It's good for you.

    The yogurt made by Fage, so popular with foodies in the city, is made in cow country just upstate, and it's not your mother's yogurt. It's Greek-style yogurt, with a tangy taste and a texture thick enough to stand up on a spoon.

    Fage, the largest dairy company in Greece, is betting that its old-world product will continue to catch on with Americans used to gooier, sweeter yogurt. The company is backing its bet with a new $85 million production plant far from the Aegean Sea here in the Mohawk Valley.

    So far, the plan is working. Sales are growing fast, company officials say, and they already plan to expand.

    "We have a unique product that Americans are understanding little by little," said Ioannis Papageorgiou, president and chief operating officer of Fage USA.

    Papageorgiou was dispatched from Greece to build the stateside business for Fage (pronounced fa-yeh) and he is a predictably fierce Greek yogurt partisan. It's richer, thicker, tasty and good for you, he says. As for American-style yogurt? Papageorgiou considers it a dessert.

    In about a decade, Papageorgiou has helped build Fage's distribution network from specialty stores in the New York City area to supermarket chains nationwide, including Costco, Kroger and Publix. Most Fage sales are still in the three-state New York City area and in California.

    Since April, Fage has been making its yogurt from a state-of-the-art plant some 170 miles north of New York City in Johnstown, near a Wal-Mart distribution center. The yogurt plant sprawls out over a space larger than two (American) football fields and has the capacity to process 18.5 million gallons of milk a year.

    Papageorgiou said the new U.S. plant follows time-honored techniques honed in Greece. Still, the high-tech operations here would likely mystify a shepherd.

    Milk courses through intricate networks of stainless steel pipes above, its movement tracked by computer. A massive steel machine squirts freshly made yogurt into empty cups a case at a time before lids are applied and the packages roll away to be cooled in the next room. Pallets of yogurt are moved by a robot arm that looks like it belongs on an auto assembly line. There are 111 people employed here, but much of the work is automated.

    Papageorgiou said they will add production capacity next year to meet the higher U.S. demand.

    "Milk never stops," Papageorgiou joked as he gives a tour of the facility. "Cows don't take a holiday."

    Fage is benefiting from a rising tide of yogurt demand. U.S. yogurt sales topped $3.7 billion for the year period ending in November, according Information Resources, Inc., a Chicago-based market research firm.

    Greek yogurt is a niche product, but it's growing too. Papageorgiou said Fage's U.S. sales have increased by double digits annually. Fage is the leader in U.S. sales of Greek yogurt, but it has competition. Chobani Greek yogurt is made nearby in South Edmeston, N.Y., about a double-marathon away from the Fage plant.

    Chobani is made by Agro-Farma, Inc., which also made Oikos organic Greek yogurt for Stonyfield until recently. Stonyfield has sued Agro-Farma for breach of contract and Oikos is temporarily off many shelves while it switches facilities. Stonyfield says this "temporary Greek tragedy" is being resolved and the increasingly popular product will begin shipping to stores again by the end of the month.

    Greek yogurt, with its lack of additives and old-world cachet, is catching on particularly with upscale consumers seeking "authentic" foods, said Bridget Goldschmidt, managing editor of Progressive Grocer.

    "This is billed as kind of the real deal," she said.

    All yogurt is made by introducing live cultures to milk. Greek yogurt goes through an additional step of straining to make it thicker. Fage says it takes about a gallon of milk to make a quart of its yogurt.

    Cream is added to some of Fage's products. The company does not add sweeteners or preservatives. But Fage sells single-serving sizes with little side compartments of honey or pureed fruit for people who crave more sweet with their tart.

    Papageorgiou gave out samples of the two-compartment yogurts after a plant tour and explained that the proper way to eat them is to spoon a little yogurt, then a little fruit.

    "Don't stir it," he admonished; mixing ruins the yogurt.