Net loss for the US dairy producer was $9.76m combined with a 7.9% increase in operating costs and expenses which more than offset its gains in net sales in the first quarter.
Milk and ice cream market focus
“We are driving incremental distribution across our core portfolio of fluid products as well as expanding our footprint of our super-regional ice cream brands,” Dean Foods CEO, Ralph Scozzafava, said.
According to USDA data, fluid milk volume dropped 3.4% year-over-year and raw milk costs increased 18% compared to the same period last year. Dean Foods saw its share of US fluid milk increased by 10 basis points year-over-year and flavored milk volume increased by 4% for the Q1 2017, the company reported.
Dean Foods said its partnership with Organic Valley is in “on track” to begin production and distribution of organic milk by July 1, 2017.
Dean Foods experienced a 19% increase in volume driven primarily by the Friendly’s acquisition last year.
The company said that is gearing up for “ice cream season” with its recent acquisition of Mayfield Creamery in the southern US as well as product innovations expansion of under the Friendly’s brand.
In addition, Dean Foods expressed a positive outlook for the rest of 2017 and expects enhanced selling capabilities through its new partnership with Acosta, an outsourced sales and marketing agency specializing in food retail and merchandising.
Extending into sour cream and plant-based
Dean Foods launched DairyPure sour cream across the US in March 2017 as the brand’s most recent line extension, which the company said will drive product and package innovation into the $1.2bn category which has not seen a lot of growth or innovation in recent years.
The product line includes three sizes (8oz, 16oz, and 24oz) with both regular fat and lighter versions.
Last week, Dean Foods announced its investment and distribution deal with Good Karma, a producer of flaxseed milk and yogurt products, marking the traditional dairy company’s entry into the plant-based milk category.
“We believe our new product innovation, strategic partnerships, and focus on eliminating waste in our supply chain are key enablers to deliver sustainable long-term growth and financial results,” Scozzafava said.