Biggest Milk Producer In The US Files For Bankruptcy

Dean Foods has seen its profits tumble in recent years as consumers have started drinking less milk
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Dean Foods is filing for bankruptcy (Photo: Adobe. Do not use without permission)

Dean Foods is filing for bankruptcy (Photo: Adobe. Do not use without permission)

The largest milk producer in the US is filing for bankruptcy.

Dean Foods has seen its profits nosedive in recent years - with its CEO saying Americans are drinking less milk.

The Dallas-based producer, which is 94-years-old, saw sales fall by seven percent in the first half of 2019, with profits plummeting by 14 percent. Its stock has lost 80 percent in that time.

Competition

Reports have cited the skyrocketing popularity of milk alternatives as part of the reason behind Dean Foods' decline.

According to Euromonitor, the global market for milk alternatives is predicted to hit $18 billion this year, up 3.5 percent from 2018 - creating a challenge for dairy producers.

"The large and complex U.S. dairy market faces several forces that are influencing future growth and challenging the status quo," said Euromonitor. "One trend impacting the industry across cheese, milk and yogurt, among other categories, is the competition from plant-based alternatives.

"Once a nascent, niche trend driven by a narrow subset of consumers, plant-based formulations are now surging in popularity with more products entering the mainstream market."

Dean Foods faced an additional hurdle last year, when retail giant Walmart built its own dairy plant and ditched Dean as its supplier.

The growing dairy-alternative sector has been cited as a factor in milk's decline (Photo: Adobe. Do not use without permission)

The growing dairy-alternative sector has been cited as a factor in milk's decline (Photo: Adobe. Do not use without permission)

'Challenging operating environment'

Eric Beringause, President and Chief Executive Officer of Dean Foods, released an official statement describing the market as a 'challenging operating environment marked by continuing declines in consumer milk consumption'.

He added: "Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption.

"Importantly, we are continuing to provide customers with an uninterrupted supply of high-quality dairy products, as well as supporting our dairy suppliers and other partners." 

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