Dean Foods has ended some of its milk procurement contracts with more than 100 dairy farms, mainly due to a surplus of raw milk in the US at a time when US consumers are drinking less fluid milk.
Dean Foods saw its gross profit drop 8% year-over-year to $1.8bn, driven primarily by a 6% decrease in reported volumes and higher mix of private label products, which the company intends to turn around with an enterprise-wide cost productivity program.
International nonprofit GRAIN has revealed that the world’s top 10 dairy companies emitted roughly 231Mt (million tons) of CO2 in 2016, the equivalent of half of France’s total GHG footprint and a quarter of the emissions emitted by Germany.
Dean Foods reported a 6.6% decrease in fluid milk sales for Q3/17 compared to last year, causing the company to lower its full-year guidance from $50m to $75m to between $10m and $20m.
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Dean Foods is closing one of its fluid milk processing plants, PET Dairy, in Richmond, Virginia, as part of its company-wide plan to consolidate operations.
Dean Foods reported an increase in net sales for Q1 2017 reaching $2bn, up from $1.88bn from the same period last year, but registered a 1.3% decline in total volume production for the quarter.
Dean Foods announced a minority investment and distribution deal with Good Karma Foods, adding resources to expansion plans of the latter, a small Colorado-based independent company that specializes in flaxseed beverages and yogurt.
Atlanta-based Hi-Tech Pharmaceuticals is taking over a former Dean Foods production facility in Belleville, Pennsylvania, and will make a multi-million investment to increase capacity and make improvements to the plant’s infrastructure.
A joint venture between Dean Foods Company and Organic Valley will bring the independent farmer cooperative’s dairy products to more US stores through Dean’s extensive refrigerated distribution network.
US milk production is still on the rise, according to a September inventory report by the National Agricultural Statistics Service, which indicated a 2.1% increase compared to 2015 reaching a total of 16.7bn lbs of milk.
Dairy manufacturers can look to growth in cottage cheese, partly by referring to it as the original high protein cultured milk product, according to food and drink consultancy Zenith International.
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.
