The 94-year-old company has had problems in recent years because Americans drink less cow's milk. The year 2019 was particularly brutal: the company's revenue fell by 7% and profit by 14% in the first half of the year. Dean Foods ( DF ) Share lost 80% this year
The company that makes some of the country's best-known dairy and dairy products, including Dairy Pure, Organic Valley and Land O & # 39; Lakes have attributed their struggles to the "accelerated decline in the conventional white milk category".
The company is heavily in debt and could not finance all the pensions of its workers. On Tuesday, Dean Foods applied for Chapter 1
1 bankruptcy to keep the business running, reorganize its debts, and finance the pensions while the company is being sold.
Dean Foods announced in a statement that it is working with the Dairy Farmers of America Cooperative on a potential deal in which the cooperative would buy almost the entire company.
As part of the bankruptcy process, the company secured from its existing lenders, including Rabobank $ 850 million] ( RSWLDD ) to keep the company going.
Milk was once a staple of the American refrigerator and was slowly disgraced by consumers as they looked for less sugary or herbal alternatives.
According to Euromonitor, the world market for milk alternatives is expected to exceed $ 18 billion this year, an increase of 3.5% over 2018. This is still a fraction of the traditional milk market, which is just under $ 120 billion worldwide this year Will reach US dollars.
Sales of cow's milk have been declining for four years. According to data provided by Nielsen to CNN Business, sales for the past 52 weeks, which ended on October 26th, were approximately $ 12 billion. This is a decline of $ 15 billion in a similar period in 2015. All types of cow's milk, such as 1%, 2%, skimmed milk and non-fat milk, are in decline.
By contrast, oat milk sales rose 636% to $ 53 million last year, though much lower.
This is not the only problem Dean Foods faces. Walmart ( WMT ) One of Dean Food's biggest customers, she dropped out last year after building his own dairy.