Dean Foods, the largest domestic milk producer, announced on November 12 that it was filing for bankruptcy.
The company’s organic portfolio is anemic after packaging its former branded products division as WhiteWave Foods in 2013. In 2017, Organic Valley controversially partnered with Dean Foods on a joint bottling venture.
After Dean’s bankruptcy announcement, Organic Valley CEO Bob Kirchoff reassured its suppliers. Kirchoff noted the cooperative had been aware that Dean was struggling, and he stated the bankruptcy will have “no impact on the venture’s customers or vendors.” This sounds like good news for the family-scale dairies that belong to the Organic Valley co-op.
The news is less good for the remaining Dean Foods brand farmers.
“What is saddening is how often family-scale dairies are impacted by price gouging and consolidation from big companies,” said Marie Burcham, Cornucopia’s director of domestic policy. “The dairy crisis
has forced many ethical farmers out of business, in part because of unfair competition from industrialized companies including Dean and others.”
Although some claim Dean’s demise is due to the rising popularity of plant-based beverages,
others note that milk has been losing out to bottled water
as well. There are many factors in their failure to thrive, but Cornucopia notes this bankruptcy comes after spinning off the most lucrative brands in Dean’s portfolio.
Dean reports that it is engaged in discussions to sell most of its assets to Dairy Farmers of America. This proposed merger rings on concerns
about anti-trust issues and market monopolization Cornucopia raised in 2016 regarding the proposed merger of Groupe Danone and WhiteWave.
“There is a pattern of consolidation in the dairy industry that rarely, if ever, benefits the farmers themselves,” continued Burcham, “Farmers that provide milk to Dean Foods will undoubtedly be affected by their bankruptcy filing and any future sale of Dean’s assets.”
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