Borden Dairy One Of The Biggest Dairy Companies In The Us Files For Bankruptcy Protection
Borden Dairy, most-known for its smiling mascot Elsie the Cow, has filed for bankruptcy protection after over 150 years in business.
The filing makes Borden the second major U.S. dairy company to seek help as milk prices rise and more people turn to alternative milk options.
The Dallas-based company filed for Chapter 11 Bankruptcy in the District of Delaware on Jan. 5 after reporting losses of $42.4 million in 2019. Through the filing the company plans to financially restructure to reduce its current loan debts, which are listed between $100 million and $500 million to over 5,000 creditors.
Ultimately, we determined that the best way to protect the Company, for the benefit of all stakeholders, is to reorganize through this court-supervised process, said Borden CEO Tony Sarsam in a press release. This reorganization will strengthen our position for future prosperity.
In November, Dean Foods, one of Bordens biggest competitors, also filed for Chapter 11 Bankruptcy protection. Dean Foods planned on selling itself rather than reorganizing finances like Borden.
Milk consumption in the United States has drastically plummeted by 40% since 1975 according to Statista. Not only have alternative milk options grown in popularity, but more and more dairy farms are going out of business ultimately causing a raise in the price of raw milk.
Top Us Milk Company Dean Foods Declares Bankruptcy Amid Drop In Demand
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Packages of Lake O’Lakes butter, a Dean Foods brand, are displayed in a supermarket in New York.
Brendan McDermid/Reuters
Dean Foods, Americas biggest milk processor, filed for bankruptcy Tuesday amid a decades-long drop-off in U.S. milk consumption blamed on changing trends and a growing variety of alternatives.
The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing co-operative owned by thousands of farmers.
Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption, CEO Eric Beringause said in a statement.
Since 1975, the amount of milk consumed per capita in the U.S. has tumbled more than 40 per cent. Americans consumed around 24 gallons per year in 1996, according to government data. That dropped to 17 gallons in 2018.
An increasing variety of beverages, including teas and sodas, has hurt milk consumption. So have protein bars and other on-the-go breakfasts, which take the place of a morning bowl of cereal.
Major Milk Company Files For Bankruptcy
Posted by Toi Williams on Nov 13th, 2019
Dean Foods , the nations biggest milk producer, has filed for Chapter 11 bankruptcyprotection to reorganize its debt and help fund pensions while it looks to sellthe company. The company said substantially all of its subsidiaries were partof the proceeding, which has been filed in the Southern District of Texas. Deansaid it will continue operating normally while it puts its finances in order.
The 94-year-old company, which has a market valuation ofabout $74 million, supplies milk for its own brands, including Dairy Pure,Meadow Gold, and TruMoo, as well as store brands. It employs 16,000 people andoperates 60 processing facilities across the country. The company says it had anet debt of about $968 million at the end of June.
Dean Foods has struggled in recent years because Americansare drinking less cows milk. Since 1975, the amount of liquid milk consumed percapita in the U.S. has fallen by more than 40 percent. Sales for cows milk hasbeen declining for the past four years. The reduction has had an outsize effecton Dean Foods, which derived 67 percent of its sales from fluid milk last year,according to its annual report.
Earlier this year, the company explored options, including asale, but ended that review in September. Now, the Dallas company says it maysell itself to the Dairy Farmers of America, a marketing cooperative owned bythousands of farmers.
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Borden Dairy Files For Chapter 11 Bankruptcy
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Financier Worldwide Magazine
Borden Dairy, one of the largest and oldest dairy companies in the US, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware.
The company, which was founded in 1856, became the second major US dairy producer to file for bankruptcy following the November filing of Dean Foods, the USs biggest milk producer. According to Euromonitor, the two companies controlled around 13.5 percent of all milk sales in the US last year.
According to a statement announcing its filing, Borden expects to continue normal operations while it pursues its restructuring after proactively filing expected motions as part of the court-supervised process, which will allow it to continue its day-to-day operations.
Borden cited a dropping demand for cows milk, rising costs for raw milk and its own debt and pension obligations as key drivers behind its filing. The companys largest unsecured claim is from the Central States, Southeast and Southwest Areas Pension Fund for over $33m.
Borden has around 3300 employees, 22 percent of which are covered by a collective bargaining agreement. The company operates 13 milk processing plants that produce approximately 500 million gallons of milk annually.
In 1995, Borden was acquired for $2bn by KKR, which proceeded to sell off pieces of the company to various buyers. Acon purchased the company in 2017.
Borden Dairy Is The Second Milk Seller To Declare Bankruptcy In Nearly Two Months
Borden produces nearly 500 million gallons of milk each year for groceries, schools and others. It … employs 3,300 people and runs 12 plants across the U.S.
AP Photo/Tony Dejak
Topline: Borden Dairy, one of the oldest milk processors in the U.S., filed for bankruptcy on Monday, making it the second large milk seller in nearly two months to restructure amid rising raw milk costs and lackluster consumer demand.
- Borden Dairy said in a statement that it filed for Chapter 11 bankruptcy protection because its debt levels are unsustainable and the company has been impacted by the rising cost of raw milk and market challenges facing the dairy industry.
- Borden Dairy will remain in business through the bankruptcy proceedings.
- The Dallas-based company has 3,300 employees.
- Dean Foods, the largest milk processor in the U.S., bankruptcy in November over similar trends in the dairy industry.
Crucial quote: Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry, Borden CEO Tony Sarsam said in a statement. These challenges have contributed to making our current level of debt unsustainable.
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One Of Americas Largest Dairy Companies Has Filed For Bankruptcy
Despite our numerous achievements during the past 18 months, the company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry.
Our facility is very old and inefficient to operate so we had to make a decision about investing in upgrading the facility and doubling the size of the milk cow herd or doing something else, and basically, we decided we were going to invest in our land and plant more almond trees and just continue farming without the cows.
No 1 Milk Company Declares Bankruptcy Amid Drop In Demand
Dean Foods, America’s biggest milk processor, has filed for bankruptcy amid a steep, decades-long drop-off in US milk consumption blamed on soda, juices and, more recently, nondairy substitutes
DALLAS — Got milk? Increasingly, Americans don’t, and that led the nation’s biggest milk producer to file for bankruptcy Tuesday.
Dean Foods blamed a decadeslong drop in milk consumption that has seen people turn to alternatives like soda, juice and almond milk.
The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing cooperative owned by thousands of farmers.
“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.
Since 1975, the amount of liquid milk consumed per capita in the U.S. has tumbled more than 40%. Americans drank around 24 gallons a year in 1996, according to government data. That dropped to 17 gallons in 2018.
An increasing variety of beverages, including teas and sodas, has hurt milk consumption. So have protein bars, yogurts and other on-the-go breakfasts, which take the place of a morning bowl of cereal.
More recently, health and animal-welfare concerns have also contributed, as more shoppers seek out non-dairy alternatives.
Not all dairy products have been affected. U.S. butter and cheese consumption is up since 1996, for example.
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America’s Largest Milk Producer Dean Foods Files For Bankruptcy
The company has numerous well-known brands.
America’s largest milk producer files for bankruptcy
Dean Foods, America’s largest milk producer and home to multiple well-known brands, filed for bankruptcy protection on Tuesday.
The Dallas-based company announced it initiated Chapter 11 proceedings “to enable us to continue serving our customers and operating as normal as we work toward the sale of our business,” Eric Beringause, who recently joined the Dean Foods as president and CEO, said in a statement.
Dean Foods products include Dairy Pure, TruMoo, Land O’Lakes, Lehigh Valley Dairy Farms and Oak Farms.
Its bankruptcy filing comes amid a sour year for the milk industry.
Last year, total sales dropped $1.1 billion, according to the Dairy Farmers of America. The net sales for 2018 were $13.6 billion, compared to $14.7 billion in 2017.
However, sales of dairy alternative products have been soaring.
Over a 52-week period that ended in June 2018, oat milk and non-dairy milk blends saw the highest growth, with dollar sales up 23% and 51%, respectively.
Dean Foods announced that it had received around $850 million in debtor-in-possession financing, a type of financing for companies that are financially distressed and in bankruptcy, from some existing lenders.
Dean Foods will operate normally amid the reorganization efforts.
The company has approximately 15,000 employees across the country.
One Of America’s Oldest Largest Milk Producers Files For Bankruptcy
Borden Dairy Co., one of America’s oldest and largest dairy companies, on Monday became the second major milk producer to file for bankruptcy in the last two months.
Tumbling milk consumption combined with the rising price of milk have crippled the dairy industry with debt. Dean Foods, America’s largest milk producer, filed for bankruptcy Nov. 12.
Borden said it filed for bankruptcy because it cannot afford its debt load and its pension obligations. It has 3,300 employees, 22% of whom are covered by a collective bargaining agreement.
The company said it also has been hurt by broader industry trends, including a 6% drop in overall U.S. milk consumption since 2015. Borden noted that more than 2,700 family dairy farms went out of business last year, and 94,000 have stopped producing milk since 1992.
With the wholesale cost of milk rising due to fewer suppliers and retail milk prices weaker due to lower consumption, the margins for milk processors like Borden have suffered, the company said in its filing.
“Despite our numerous achievements during the past 18 months, the company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” said CEO Tony Sarsam in a statement.
He said the company has discussed “a range of potential strategic plans” with its lenders. But it had been unable to reach an agreement with them as to what to do next.
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How Two Years Of Changes In Dairy Led To Two Major Bankruptcies
Within two months, two of the largest milk processors in the U.S. filed for bankruptcy. First came Dean Foods, which made the announcement in November. By January, Borden Dairy was doing the same. So what happened?
For at least two years, the dairy giants have increasingly struggled with competition from milk alternatives, innovative startups and deeply discounted private label dairy.
Its going to take some disruptors to wake up some of the folks who havent made those decisions to invest in the future. If youre not investing in the category today, youre going to have a major challenge to survive, Paul Ziemnisky, EVP of global innovation partnerships at Dairy Management Inc., told Food Dive.
Consumer preferences shifted, but Borden and Dean didnt change enough, leaving them in dire financial straits and facing significant debt. Dean Foods net income dropped from $61.6 million in 2017 to a loss of $327.4 million last year. And while Borden once had a presence in all 50 states, as of last summer, it offered only 35 products in parts of the Midwest, South and Southeastern U.S.
The company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry, Bordens CEO Tony Sarsam said in a statement when it filed for bankruptcy. These challenges have contributed to making our current level of debt unsustainable.
Its just too much debt on the books for businesses that can no longer support it, he said.
The Biggest Milk Company In The Us Declares Bankruptcy
Got milk? Increasingly, Americans don’t, and that led the nation’s biggest milk producer to file for bankruptcy on Tuesday.
Dean Foods blamed a decades-long drop in milk consumption that has seen people turn to alternatives like soda, juice and almond milk.
The Dallas company said it may sell itself to the Dairy Farmers of America, a marketing co-operative owned by thousands of farmers.
“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption,” CEO Eric Berigause said in a statement.
READ MORE: * Dairy industry call for ban on alternative milk labelling
Since 1975, the amount of liquid milk consumed per capita in the US has tumbled more than 40 per cent. Americans drank around 24 gallons a year in 1996, according to government data. That dropped to 17 gallons in 2018.
An increasing variety of beverages, including teas and sodas, has hurt milk consumption. So have protein bars, yoghurts and other on-the-go breakfasts, which take the place of a morning bowl of cereal.
More recently, health and animal-welfare concerns have also contributed, as more shoppers seek out non-dairy alternatives.
Oat milk, for example, saw US sales rise 636 per cent to more than US$52 million over the past year, according to Nielsen data. Sales of cow’s milk dropped 2.4 per cent in that same time frame.
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Milk Company Dean Foods Files For Chapter 11 Bankruptcy
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Top U.S. milk processor Dean Foods Co. filed for Chapter 11 bankruptcy protection and is in advanced talks with Dairy Farmers of America Inc. about a potential sale.
Dean listed assets and liabilities of as much as $10 billion each in court papers filed Tuesday in Houston, and it said in a statement that it has commitments for $850 million in bankruptcy financing from existing lenders led by Rabobank. The filing allows Dean to keep operating while it works on a plan to pay creditors and turn the business around.
Losses have piled up after Deans biggest customer, Walmart Inc., built its own milk plant. The company has been squeezed by fierce competition and the rising price of milk, which has increased costs and eroded profit margins.
Americans are drinking less cow milk, with nut milks and bottled water cutting into its popularity. On top of that, retailers have been selling their house brands of milk at a loss to increase store traffic, Hoai Ngo of Bloomberg Intelligence wrote in a note.
Dean shares have tumbled 79% this year, the worst performance among peers tracked by Bloomberg. The stocks trading was halted Tuesday. Its bonds dropped to fresh lows, plunging to as little as 14.5 cents on the dollar, according to Trace trading data. As recently as January of last year, the bonds were trading at full value.
According to Rabobank, Dairy Farmers of America is the sixth-biggest dairy company in the world by sales, and Dean Foods is No. 11.
America’s Biggest Milk Producers Are Going Bankrupt
Borden follows Dean Foods in filing Chapter 11.
When Tony Sarsam became the CEO of Borden Dairy almost two years ago, one of the first things he did was to re-establish the company’s marketing department, which had disappeared at some point during its previous CEO’s tenure. He also gave Borden’s iconic mascot, Elsie the Cow, a gentle 21st-century glow-up, and OK-ed a new advertising tagline, Glass Half-Full Since 1857.”
But despite the well-meaning optimism, Borden’s glass is decidedly half-empty now, if not entirely empty. On Sunday, the Dallas-based dairy company filed for bankruptcy, becoming the second major milk producer to file for Chapter 11 in less than two months.
“Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” Sarsam said in a statement. “These challenges have contributed to making our current level of debt unsustainable.”
The company currently has 3,300 employees, and other than saying that it will be “business as usual” during these “voluntary reorganization proceedings,” it has not yet specified its long-term plan. Borden’s decision to file for bankruptcy was, in part, because it can’t afford its current debt load and also can’t meet its employee pension obligations.
Meanwhile, sales of oat milk increased by a whopping 636 percent between 2018 and 2019, while cow’s milk sales fell by 2.4 percent during those same 12 months.
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