The most crucial milk producer in America filed for chapter Tuesday after many years-lengthy drops in consumption took its ultimate toll on the corporate. Dean Foods blamed the consumption decline on shoppers consuming alternate options, like soda, juice, and almond milk.
The Dallas-primarily based firm mentioned it might promote itself to the Dairy Farmers of America, an advertising and marketing cooperative owned by 1000’s of farmers. Since 1975, the quantity of liquid milk consumed per capita within the US has tumbled more significant than 40%. The people drank around 24 gallons a year in 1996, in line with the authority’s information. That dropped to 17 gallons in 2018.
A growing number of drinks, together with teas and sodas, have to harm milk consumption. So have protein bars, yogurts, and different on-the-go breakfasts, which take the place of a morning bowl of cereal. Just lately, well being and animal-welfare issues have additionally contributed, as additional consumers hunt down non-dairy options.
Oat milk, for instance, noticed US gross sales rise 636% to greater than $52 million over the previous year, in keeping with Nielsen information. Total sales of cow’s milk dropped 2.4% in that very same time-frame. Not all dairy merchandise has been affected. US butter and cheese consumption is up since 1996, for instance.
The downturn has had an outsize impact on Dean Foods, which derived 67% of its gross sales from fluid milk last year, in line with its annual report. The corporate has misplaced cash in eight of its final ten quarters and posted declining gross sales in seven of the last eight.
Dean employs 16000 individuals and operates 60 processing services throughout the nation. On any given day, it’s working 8000 refrigerated supply vehicles on US roads. It provides milk for its manufacturers, like Dairy Pure, Meadow Gold, and TruMoo, in addition to retailer manufacturers. One colossal blow got here last year when Walmart opened its milk processing plant in Indiana.
Dean mentioned it is going to proceed to work usually, whereas it places its funds so as underneath Chapter 11 chapter. It has lined up about $850 million in financing from lenders. The chapter submitting comes at a troublesome time for dairy farmers, who had been already battling low costs due to oversupply. Linda Ceylor and her husband, Gerald, function a natural farm close to Catawba, Wisconsin, the place they milk fewer than 50 cows and lift heifers.