Dean Foods, America’s largest milk producer, filed for bankruptcy on Nov. 12, following years of declining sales and steep competition from both industry competitors and rival food groups.
Best known for producing labels such as Dairy Pure and Troo Moo, the company has been a staple of American refrigerators for over 94 years. But despite its long venerated status, the dairy-maker has, in recent years, been the victim of milk’s broadly declining popularity as plant-based, lower-calorie alternatives, like coconut and soy milk, soar in sales.
Amidst increasingly desperate financial straits, Cornell SC Johnson School of Management alumnus Eric Beringause MBA ’82 took the reigns of the embattled company only four months ago. With decades of executive experience in the food industry, Beringause was appointed Chief Executive Officer at the end of July, after a slew of predecessors had failed to stem the firm’s bleeding.
Dean Foods declined to offer comment to The Sun.
“I am honored to join Dean Foods at this important juncture,” said Beringause in a press release. “I am excited to work with the Board and management team to leverage our scale and substantial assets to realize the significant opportunities available to transform our company.”
But the combination of a swelling debt load and declining revenue proved a nearly impossible challenge for the newly minted CEO to surmount. In what proved to be one of the company’s breaking points, Walmart — once the brand’s largest buyer — announced that it would drop the company’s products in favor of its own in-house dairy line.
Dean Foods is currently working with the Dairy Farmers of America cooperative on a potential deal in which the DFA would purchase almost all of the company. While talks are underway, Dean Foods has procured loans to keep the business running as it works its way through Chapter 11 bankruptcy proceedings, Bloomberg reported.
Yet even if Dean Foods survives, the rising popularity of plant-based alternatives cannot be ignored, according to Emily Ooms ’20, president of Cornell University Dairy Science Club, who said that most of Cornell’s dining locations — the famed Dairy Bar included — are offering more vegan options to keep pace with growing demand.
In 2018 alone, total milk output fell by over $1 billion, while sales of vegan-friendly beverages increased by nine percent.
But while the high-profile fall of a dairy titan has left many producers on edge, Cornell students involved in the industry have nevertheless expressed confidence that milk is here to stay.
The bankruptcy, ultimately, does not mean “a whole lot,” Aaron Harbach ’20, who grew up working on his family’s dairy farm, told The Sun. “The milk that the farmers were sending [before] is still getting sent and being processed … [the DFA] is still willing to take on more.”