The largest milk producer in the United States, Dean Foods, has filed for bankruptcy. The dairy industry has seen declining profits in recent years as fewer people are drinking cow’s milk, but 2019 was one of the worst years on record for the industry, especially for Dean Foods, which saw a 14% reduction in profits this year, as well as an 80% drop in its stock price.
Dean Foods is not a particularly recognizable name, but they actually own many of the popular brands that fill the shelves in most grocery stores throughout the US, such as TruMoo, Dairy Pure, and Land O’ Lakes milks.
The company admitted in a recent statement that their financial woes were the result of an “accelerated decline in the conventional white milk category.”
The consequences of the trend were felt even harder for Dean Foods after losing a contract with Walmart when the company decided to build its own dairy plant.
According to CNN Business, traditional milk sales have been dropping steadily in the past four years. For example, sales for the entire industry last year are around $12 billion globally, which is roughly $3 billion less than the $15 billion made by dairy companies in 2015. Recent reports have indicated that the industry lost another billion dollars in value last year.
Meanwhile, sales continue to increase for alternatives to traditional dairy. For example, sales for oat milk have increased by 636%, to $53 million in the past year alone. Euromonitor estimates that the market for traditional dairy alternatives will be worth more than $18 billion by the end of the year.
However, despite the problems that the dairy industry has had in recent years, they are still expected to bring in around $120 billion globally this year, and they are still behind the vast majority of the products that end up on store shelves.