Quarterly results

Dean Foods revenue declines in Q2 as it cuts private label businesses

By Douglas Yu contact

- Last updated on GMT

Picture credit: Friendly's. Dean Foods has acquired Friendly's ice cream.
Picture credit: Friendly's. Dean Foods has acquired Friendly's ice cream.

Related tags: Ice cream, Milk, Dean foods

Dean Foods’ decrease in its private label businesses has caused a revenue decline in its second quarter, the company said during its conference call on Monday.

Ending on June 30, the net sales of the company was around $1.8m, down from sales of $2m in its second quarter last year.

Dean Foods’ total volume of all products in the second quarter (632 millions of gallons) represents a 3.1% decline compared to the same period last year. However, this was in line with the company’s expectations.

Dean Foods’ CEO, Gregg Tanner, said “Our branded white milk volume was flat year-over-year. But we have seen an increase in our flavored milk volume.”

Aiming to incorporate Friendly’s into core business

The dairy giant also experienced a 2% decline in ice cream due to the price cut on the private label, according to the conference call.

The meeting also highlighted the company’s acquisition of the Friendly​’s ice cream brand in June this year.

Dean Foods will close its ice cream production facility in California in its third quarter. In July, it began its production at a new ice cream facility in St. George UT.

Friendly’s is posting “strong regional brand performance,”​ even after Blue Bell’s re-entry into the market, Tanner said.

Expected to grow in Q4

"Our second quarter performance demonstrates our continued focus on driving strong operational and financial performance across all functions,”​ Tanner said. “We have a clear strategic vision for long-term growth, and our entire organization is focused on executing our agenda.”

The company expected production volumes to drop one percentage point annually in the third quarter, and to increase again in the fourth quarter.

In addition, Dean Foods is looking to expand into the plant-based market, as soy and almond milk is becoming more and more common.

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