News & Press: Regional News

Dairy giant Dean Foods files for bankruptcy protection, may be sold

Tuesday, November 12, 2019  
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Associated Press

November 12, 2019

Dean Foods' headquarters is seen in Dallas. The company, once based in Franklin Park, Illinois, has filed for bankruptcy protection and may be sold to Dairy Farmers of America.

Dean Foods' headquarters is seen in Dallas. The company, once based in Franklin Park, Illinois, has filed for bankruptcy protection and may be sold to Dairy Farmers of America. (Tony Gutierrez / AP)


 

Milk still has a place in the American refrigerator, but it’s now sharing that space with juices, flavored soda waters and a myriad of other options.

On Tuesday, Dean Foods, one of the nation’s most well-known milk sellers, filed for Chapter 11 bankruptcy protection and said it may sell the company off to the Dairy Farmers of America.

“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,” CEO Eric Berigause said in a prepared statement.

Dean Foods, founded in 1925, was a Chicago-area institution for decades before a 2001 merger of the Franklin Park-based company with Dallas-based Suiza Foods Corp. The combined company kept the Dean name but its headquarters moved to Dallas.

Americans are not drinking milk like they used to for a number of reasons, the most prevalent being that there is so much more to choose. We've simply diversified our mealtime and snacktime routines.

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Consumers have steadily pulled back on their milk consumption over the years. In 1975, milk sales totaled 53.3 million pounds, but it dropped to about 47.8 million pounds last year. Since 2010, milk consumption has fallen more than 13%.

That has hit dairy farms and milk sellers hard.

Dean Foods Co., known for the Milk Chugs line introduced in 1997, has lost money in eight of its last 10 quarters and in seven of its last eight quarters it’s posted declining sales.

The Dallas company looked into a sale earlier this year but said two months ago that it would continue doing business as a stand-alone venture.

Dean Foods, which named Berigause as its new CEO in July, said its business is operating normally while it reorganizes.

It has received a commitment of about $850 million in debtor-in-possession financing from certain existing lenders.


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