Dean Foods – whose more than 50 brands include Dean’s, Land O’ Lakes and Country Fresh – said it intends to continue operating.
The company said it “is engaged in advanced discussions” for a sale to Dairy Farmers of America, a national milk cooperative representing farmers, producers and brands such as Borden cheese and Kemps Dairy.
Dallas-based Dean Foods, which has about 15,000 employees, said it has been unable to escape the effects of traditional milk’s decline as consumers seek alternatives.
“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,” said Eric Beringause, the company’s recently appointed CEO, in a statement.
“Importantly, we are continuing to provide customers with an uninterrupted supply of high-quality dairy products, as well as supporting our dairy suppliers and other partners.”
In 2018, Dairy Farmers of America, which represents about 30% of total U.S. milk production, reported a 7.5% decrease in sales to $14.7 billion. The organization said the decline was “primarily” due to lower milk prices.
Dean Foods said it had lined up about $850 million in bankruptcy financing to continue operating while it arranges a deal.
In its bankruptcy petition, Dean Foods listed $2.29 billion in assets and $2.18 billion in debts.
The company listed the Central States Southeast & Southwest Areas Pension Plan as its largest unsecured creditor with a claim of $722.4 million. The company also owes Dairy Farmers of America $172.9 million.
