Expert weighs in on milk’s competitors, other potential reasons for Dean Foods bankruptcy

MADISON, Wis. (WMTV) -- A dairy policy expert says milk has many competitors that contributed to the downfall of the nation’s largest milk company.

Dean Foods announced Tuesday that it filed for bankruptcy during a decades-long drop-off in milk consumption across the country.

Mark Stephenson, the director of dairy policy analysis at the University of Wisconsin-Madison, said he was not completely surprised by the announcement, only the timing.

Stephenson suspects there to be a number of causes resulting in the news, both company-specific and industry-wide.

“Dean Foods has had some real problems over the last couple of years,” he said. “They’ve been losing quite a lot of fluid milk sales. That’s not just Dean Foods’s fault. That’s consumption patterns that are changing as well, but they also lost a very large customer a couple of years ago.”

Walmart began processing its own milk in 2017.

He added that milk consumption patterns have changed with “category shifting,” giving the example of eating cereal with yogurt instead of milk.

Milk has many rivals, according to Stephenson, from nut-based dairy alternatives to other beverages like water.

Dean Foods said that it is “engaged in advanced discussions with Dairy Farmers of America,” about a potential sale.

Stephenson said that if the assets of the company were to change hands, he does not imagine consumers or dairy farmers would feel the impact.

“As far as dairy farmers are concerned, as long as those plants stay open, even if they’re owned by somebody else, they [farmers] won’t know much of a difference,” he said. “It’s not a big change to the dairy industry, it’s a big change to Dean Foods.”

For now, the company said that it will operate as normal and continue to support its suppliers.