Learning to Milk a Profit
It wasn't the three years of investment banking or the two years at Columbia Business School, or even the year at Deloitte, that led Siggi Hilmarsson to discover his calling. It was a crusty piece of toast that prompted him to leave consulting to make yogurt.
Tired of the carb-centric American diet, the 33-year-old Reykjavic native began whipping up Icelandic-style "skyr" yogurt in his sink. "I felt I was getting 60 percent of my calories from processed sugar with no nutritional benefit," he says. Similar in flavor to Greek strained yogurt but with less sugar and more protein, skyr became his regular snack. As his enthusiasm for it grew, he decided to make the yogurt at a dairy facility. In 2005 he rented space from an upstate New York agricultural school. When plant regulations forbade him from taking the yogurt home unlabeled, he slapped stickers on the cups and named the brand Siggi's. He gave some to friends, one of whom worked for Murray's Cheese shop in Manhattan. If he made enough, she said, Murray's would stock it.
"I didn't like my day job, so I thought I should figure out what to do," he remembers. With "a low five-figure" amount of seed capital from a former professor, Hilmarsson left Deloitte in fall 2005 to focus on Siggi's full-time. In July 2006, Murray's started carrying his yogurt. The following summer, after his own solicitations, New York prepared foods meccas Dean & Deluca and Zabar's followed. When a Whole Foods (WFMI) buyer expressed interest, Hilmarsson knew he needed a real production line. With loans from friends, he built a factory in the central New York city of Norwich in late 2007 and increased production twentyfold.
Whole Foods now sells Siggi's standard and more esoteric flavors—including orange ginger—nationwide. "It's becoming a cult phenomenon," says Errol Schweizer, senior global grocery coordinator for Whole Foods. Last year, Siggi's sales grew to $2.6 million. With six employees, Hilmarsson plans to expand into other Northern European products, though he won't reveal which ones just yet. He's now making about 50% of what he made at Deloitte, but that's not the point. "Maybe," he says, "Americans are realizing they're eating too much processed sugar."
SELLING THE ICELANDIC DIET
90,000: Six-ounce cups of yogurt made per week in 2010's first quarter, up from 150 in 2006.
1,500: Stores selling Siggi's (which retails for about $3 per cup), up from two in 2006.
10: Grams of sugar in a six-ounce cup of blueberry Siggi's yogurt. For Yoplait, it's 28.
300-350: Cows needed to produce milk for those 90,000 cups of yogurt.