"I was in probably about 10 to 15 stores in Brooklyn and Manhattan so I didn't really realize how big of a break it was at the time," Hilmarsson says of the deal with Whole Foods.
But as the business grew, so did the the challenges.
"After we had just launched in Whole Foods, the [manufacturing] plant totally crashed," Hilmarsson says. "We couldn't keep up with the demand, we couldn't cool the yogurt down fast enough to meet the production volumes. So, we had to shut the plant down for about three or four months and rebuild it. The shelves were empty — we didn't ship anything while we did it.
"That was a horrible time, we nearly went bankrupt," he says.
Even after the production problems were solved, Hilmarsson struggled to reach mainstream American consumers (outside of health foods stores), who initially preferred a sweeter taste than his skyr.
Skyr, similar to Greek yogurt, is made by mixing cultures with milk and straining out any water for a thick and slightly sour taste, with less sugar and more protein than traditional yogurt. (Yoplait's original strawberry yogurt has 19 grams of sugar and 6 grams of protein, for example, while Siggi's strawberry skyr has 11 grams of sugar and 15 grams of protein.)
"At that time in America, one of the best-selling yogurts had more sugar per ounce than a Coke," Hilmarsson says. "Most people weren't really thinking about the sugar and that was one our challenges.
"For the first couple of years, when people ate our yogurt they were like, 'Oh this is so tart, it needs more sugar, it needs to be sweeter," he explains.
That made it hard for the brand to expand its reach, Van Biema says.
"We had some issues where the growth was quite slow for a number of years," Van Biema tells CNBC Make It. "There were definitely times that I had doubts that the thing was going to work."
But Hilmarsson remained dedicated to his product and brand, which slowly began to see more and more sales, as thicker strained yogurts soon soared in popularity. (In 2005, the Greek yogurt market was only $60 million, according to The Atlanctic, and by 2011, it topped $1.5 billion, as brands like Fage and Chobani emerged as favorites in U.S. grocers.)
Although skyr is different than Greek yogurt (it uses different cultures) the healthy eating trend increased awareness, Hilmarsson says: "People started caring a lot more about what we were talking about, which was just cutting down on sugar in everything they were eating."
Today, Siggi's is sold in over 25,000 stores nationwide and at supermarkets like Stop & Shop, Meijer and Publix. It is the fastest growing national yogurt brand this year to date, according to Nielsen.
Looking back, Hilmarsson says the key to his success was unwavering persistence. And, that's the No. 1 piece of advice he would give to an ambitious young person today.
"You have to be totally convinced yourself that you're going to make this work," Hilmarsson explains. "I think you have to be all in, which is sort of a 'burn your bridges' mentality."
Van Biema says it's a mentality that sets Hilmarsson apart from other entrepreneurs.
"The thing that is unique about Siggi is that he had real vision for what he wanted to do," van Biema says. "People told him that the brand needed more sugar, that it wasn't mainstream, all those things, and he stuck to his guns and really built what is, in my view, a new category in the yogurt business."
And betting on Hilmarsson's determination was a wise choice, van Biema says: "It turned out to be a spectacularly good investment."
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