Visionary Chobani Founder & CEO Hamdi Ulukaya has been at the forefront of Food business innovation since beginning what is now the No. But now, he is sounding the alarm about what he says is an increasingly dire situation for small and emerging food companies — especially those seeking to compete with unhealthy, ultra-processed products.
In a recent speech, Ulukaya expressed alarm over the ever-growing chasm between industry demands, regulatory wriggle requirements and the assets that mission-oriented food startups have at their disposal. His takeaway is simple: If we want a healthier, more transparent food system, we need to side with the underdogs, not bury them in red tape.
The Problem With ‘Clean’ Food:
Why The Regulatory Backlash To The Term May Be Making It More Popular
What is striking, Ulukaya said, is the painful irony of it all: At a time when consumers are clamoring for cleaner, simpler and more transparent food labels, the regulatory landscape has never been tougher for small producers to navigate.
While the new ingredient bans, stricter labeling laws and supply chain limitations are often well-meaning, disturbingly they seem to be impacting small companies disproportionately. And unlike global food giants, startups don’t have huge legal teams or lobbying budgets to help them quickly change course.
“When you’re trying to do the right thing make something natural, healthy and honest it shouldn’t be more difficult than making full of chemicals,” Ulukaya said.
Many entrepreneurs are deterred from even stepping foot in the space due to how expensive and difficult it is to bring a new food product into today’s market, he warns.
Rising Costs and Shrinking Margins
In addition to regulation, jumping ingredient prices are also putting added strain on new food brands.
Due to crop yields disrupted by global climate change, and inflation in the global world of trade, the cost factor to source high quality non-GMO organic ingredient options has gone through the roof. For a startup with thin margins, this can be the difference between scaling up and dying.
Chobani itself, now a giant, began as a small operation in a shuttered yogurt plant in upstate New York. Ulukaya’s tale of bootstrapping a food company from nothing gives him an unusual point of view. He recalls the anxiety over every single cent spent on packaging, ingredients and transport.
“You can’t have a better food system if the people trying to fix it are priced out before they even start,” he said.
Big Food vs. Small Food: The Battle for Shelf Space
A subhuman factor bedeviling smaller food companies is distribution power. Not only do the large food conglomerates control production and advertising (ever hear of Mars?), but they also wield their influence on supermarket shelves from coast to coast.
Even if a startup does create a healthier, better-tasting product, it can be hard to get in front of retailers. And when it does, taking on billion-dollar marketing budgets is a steep challenge.
The result? It’s been claimed that as much as half of the potential electricity savings identified in recent analyses never gets deployed.
Role of Leadership to Transform the Industry
Ulukaya wants other industry leaders and policy makers to imagine differently. Instead of employing a one-size-fits-all regulatory approach to cast as wide a net as possible,” he pushes for aid and support systems so that small producers can afford to meet standards without bankrupting themselves.
He also challenges big companies to work with, invest in or incubate the smaller brands that are trying to do things better — ethically, sustainably and nutritionally.
“If we talk about health, if we’re going to talk about transparency, then we have to work on that place,” Ulukaya said.
Consumers Have a Role Too
“The more you ask them, consumers are saying they want food that is healthier and more ethical, but when it comes to actually making the purchase, we still see that price sensitivity and familiarity with a brand trumps all,” he said. To Ulukaya, genuine change involves consumer education — letting people know what goes into their food and where their dollars are going.
Each purchase of a product from a mission-driven brand is a vote for different food future.
Why This Moment Matters
The food business is at an inflection point. On one track is momentum around cleaner, more sustainable products. On the other, there’s a system that rewards scale, profit and legacy brands.
If the barriers to entry continue increasing, we are in danger of losing diversity, innovation and actual food entrepreneurship. Ulukaya’s warning isn’t just about regulations it’s the soul of what we eat.
As he put it, “We need to be there to protect the rebels. “It’s these kids who are going to revolutionize the s
