Health benefits, intolerance, environmental issues, animal rights: There are many reasons why people have started swapping diary in for alternatives. Whatever the reasons, this switch to alternative milk has caused America’s biggest dairy manufacturer, Dean Foods, to file for Chapter 11 Bankruptcy.
In recent years, milk has encountered a lack of demands. As one writer from AgriNews put it: “Got Milk? Increasingly, Americans don’t.” The yearly amount of milk consumed has decreased from an average of 24 gallons per American in 1996 to 17 gallons in 2018; overall the amount of milk consumed per capita in the U.S. has decreased over 40 percent since 1975, explains AgriNews. And for those who do drink dairy, Walmart has opened its own dairy farms drastically, driving up the competition for companies like Dean Foods. Because of Walmart’s ability to cut out the middle man, they have reached out and formed connections with individual dairy farmers as well as have been able to reduce prices to a point where it’s become hard for other companies to compete.
With this vastly changing market, it may come as no shock that after a 91 percent drop in profit, VegNews has announced that Dean Foods decided to focus on more plant-based opportunities, specifically vegan brand, Good Karma Foods. Was it enough? Unfortunately, for Dean Foods, no. Now, Dean Foods is forced to evaluate their options. According to Do You Remember, along with securing $850 million in financing from Rabobank, Dean Foods is also looking into creating a deal to sell their company to Dairy Farmers of America– a marketing cooperative owned by thousands of farmers. While the deal isn’t completely done, it would end with the “cooperative buying almost all of Dean Foods.” Along with employing 16,000 people and operating 60 processing facilities across the U.S., some of the brands Dean Foods is made up of include Dairy Pure, Meadow Gold and TruMoo.
Photo by Mehrshad Rajabi
Dean Foods isn’t the only one getting hit by these growing ethical and health concerns. VegNews explains that this Oct., Giacomazzi Dairy shut down after over 125 years of business to focus on growing almonds. However, milk seems to be the only dairy product feeling the backlash, as goods like butter and cheese are still in high demand.
What are they turning to, you may ask? According to MSN, plant-based milk has been on the rise, with sales growing a total of 14 percent in the past two years. Oat milk especially has seen a drastic increase, jumping over 200 percent in just the past year. Not only are grocery shoppers swapping out, but so are coffee shops, most now offering a variety of plant-based kinds of milk to choose from. But Plant-Based milk isn’t the only cause for this drop-in sale, other factors like consumers searching for healthier options and stagnating breakfast cereal sales are also playing into it. Regardless of the reason, Dean Foods has without a doubt felt the effect.