Dean Foods Company

Dean Foods is the nation's largest milk bottler. The company's Fresh Dairy Direct business markets fluid milk, ice cream, cultured dairy products, and beverages (juices, teas, and bottled water) under more than 50 local, regional, and private-label brands, including Borden, Pet, Country Fresh, Meadow Gold, and TruMoo, a leading national flavored milk brand. Following the spinoff of most of its WhiteWave Foods business, Dean Foods still holds about 20% of WhiteWave, which makes coffee creamers (International Delight), dips, ice cream, butter, cottage cheese, and specialty dairy products. Dean owns and operates a number of smaller dairy companies, including Berkeley Farms, and Garelick Farms.

Geographic Reach

Dallas-based Dean Foods rings up 97% of its sales in the US, where it operates about 80 manufacturing facilities. Overseas, the dairy giant has operations in Europe (Belgium, France, the Netherlands, and the UK).

Operations

Following the sale of its Morningstar Foods division and spinoff of WhiteWave in 2013, Dean Foods is left with Fresh Dairy Direct. (WhiteWave accounted for nearly 20% of Dean Foods's 2012 sales.)

Sales and Marketing

Dean Foods markets its products through advertising and other promotions, including media, coupons, trade shows, and other promotional activities. The company spent about $201 million on advertising in 2012, compared with $174 million in 2011. Dean's customers include food retailers, distributors, foodservice operators, educational institutions, and governmental entities throughout the US. Wal-Mart and its subsidiaries, including Sam's Club, is Dean Foods's largest customer; accounting for 23% of Fresh Dairy Direct sales and 19% of WhiteWave sales in 2012.

Financial Performance

Sales at Dean Foods declined 12% in 2012 versus 2011. WhiteWave outperformed the larger Fresh Dairy Direct (FDD) business, posting a 14% jump in annual sales compared with a 4.5% decline for FDD. The dairy business suffered from lower prices for its milk and other dairy products and falling shipments of fresh milk. WhiteWave's sales increased by $262 million driven by volume growth and higher prices for its coffee creamers and beverages and premium dairy products.

Domestic sales fell by nearly 2%, while international sales (a tiny portion of Dean Foods' overall sales) were esssentially flat (up less than 1%).

Strategy

After diversifying into higher-margin businesses (and piling on debt in the process), Dean Foods has reversed course to become essentially a pure-play in low-margin fluid milk and traditional diary products. After selling a 20% stake in WhiteWave-Alpro to the public for $391 million in fall 2012, it spun off the rest in 2013. The purchase of Alpro (in 2009) and its combination with WhiteWave Foods gave Dean Foods a firm presence in Europe and furthered its ambition of becoming a global brand. WhiteWave's reconfiguration also separated the Dean Foods' more traditional, lower-margin businesses from the higher-margin organic and value-added businesses. Indeed, WhiteWave-Alpro was considered by many to be the most valuable part of Dean Foods. The company's standard dairy products and its large private-label business are more vulnerable to volatility in commodity prices and consumers' dwindling appetitive for milk and other dairy foods.

Mergers, Acquisitions and Disposals

While Dean Foods has been focused intently on acquisitions, it has recently made some disposals. Most recently, the company in 2013 sold its Morningstar Foods division to Canada's #1 dairy processor Saputo for $1.45 billion. Previous divestments include the sale of its Rachel's Dairy Limited (UK) business to France's Lactalis in 2010, and the sale of its Mountain High yogurt business to General Mills in early 2011. It also sold its private-label yogurt business to Schreiber Foods and later in the year OpenGate Capital acquired the dairy processing business under the Golden Guernsey brand.

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Dean Foods Company


2711 N Haskell Ave #3400
Dallas, TX 75204-2928
Phone: 1 (214) 303-3400
Fax: 1 (214) 3033499
www.deanfoods.com

STATS


  • Employer Type: Public
  • Stock Symbol: DF,
  • Stock Exchange: , NYSE
  • CEO: Gregg Tanner
  • Chairman: Tom Davis
  • CEO: Gregg Tanner

Major Office Locations

  • Dallas, TX

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