No. 1 milk company declares bankruptcy amid drop in demand
By MICHELLE CHAPMAN AP Business Writer
Dean Foods, America's biggest milk processor, filed for bankruptcy Tuesday amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices and, more recently, nondairy substitutes.
The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.
"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 statement.
Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.
That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.
Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.
Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.
The company said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.
Its stock rose 2.3% in morning trading.