Dean Foods files for bankruptcy

Dean Foods, America’s largest milk producer, has filed for bankruptcy in Texas. Despite implementing a range of efficiency initiatives, the dairy company has been unable to weather declines in consumer milk consumption.

For the time being, it is business as usual thanks to the $850 million debtor-in-possession financing from some of Dean Foods’ existing lenders, led by Rabobank. Meanwhile, the company is in advanced discussions with Dairy Farmers of America regarding the sale of the company.

“We have a strong operational footprint and distribution network, a robust portfolio of leading national brands and extensive private label capabilities, all supported by approximately 15,000 dedicated employees around the country,” said Eric Beringause, who recently joined Dean Foods as president and chief executive.

The Dean Foods portfolio includes white milk brand, DairyPure and flavoured milk, TruMoo. The company also has a joint venture with Organic Valley, distributing fresh organic products to local retailers. In all, Dean Foods has over 50 national, regional and local dairy brands as well as private labels.

“Since joining the company just over three months ago, I’ve taken a hard look at our challenges, as well as our opportunities, and truly believe we are taking the best path forward,” Beringause explained. “In recent months, we have put in place a new senior management team that not only has considerable experience in the dairy and consumer product industries, but also in executing major turnarounds. I am confident we have the right people in place to lead us through this process.”