The company continued to Provide Wholesome, Great-Tasting Dairy Products and the Highest Levels of Quality, Service and Value. On November 12, 2019, it was announced that Dean Foods and substantially all subsidiaries initiated voluntary Chapter 11 reorganization proceedings in the Southern District of Texas. The intention was to use this process to protect and support ongoing business operations and address debt and unfunded pension obligations while working toward an orderly and efficient sale of the Company.
On February 17, 2020, Dean Foods and certain subsidiaries entered into an asset purchase agreement with Dairy Farmers of America (“DFA”) through which DFA acquired a substantial portion of ongoing business operations. The transaction was subject to regulatory and Court approval, as well as higher or otherwise better offers.
During this process, the company continued operating as usual, continuing to provide customers with an uninterrupted supply of high-quality dairy products, and supporting suppliers.
Focused remained on providing the highest levels of quality, service and value.
Goodness and Freshness in Over 25 brands
Dean Foods is one of the country’s principal food and beverage companies and the biggest dairy subsidiary in the USA. It is based in Dallas, Texas, and owns plants and distributors all over the nation, sixty-six manufacturing facilities in thirty-two states, and distributes its goods - which include milk, dairy products, cheese, ice cream, tea, and juice - in all fifty states. It processes its milk products under several well-known regional and national brands, such as T.G Lee, DairyPure, TruMoo, Friendly’s, Meadow Gold, Rachel’s Organic, and Land O’Lakes (licensed).
History of Dean Foods
Samuel E. Dean was the founder of Dean Foods in the 1920s. He was a small-time owner of an evaporated milk processing plant in Franklin Park, Illinois who over time purchased more and more dairy plants in Illinois. The business continuously grew and before he knew it, he had a thriving enterprise. As he said many times in interviews, his business went “from a small regional dairy into a diversified company”.
In December of 2001, Dallas-based Suiza Foods Corporation acquired the legacy of Dean Foods and chose to formally adopt the name Dean Foods. Many changes were made over the years as part of this merger which included the divestion of eleven plants under the name National Dairy to a group called Dairy Farmers of America. It also initiated the creation of Bay Valley Foods in 2005 which was a division of TreeHouse Foods, Inc., and later that year TreeHouse Foods (THS) began trading on the New York Stock Exchange.
Dean Foods became a leading name in the soybean beverage market in 2009 when it purchased Alpro ( a European company based in Belgium that markets products primarily made from soy) for approximately $455 million. This put it on the map as a "global leader in soy beverages". The most famous brand in this market is Silk – milk made from organic and conventional soybeans. This resulted in a company restructuring that saw the sale of many subsidiaries, including Rachel’s Organic.
Interesting Trivia: Dean Foods decided to retire the Schepps brand in October of 2010 in favor of dairy products brand, Oak Farms. Schepps had been part of the company since 1942.
Lawsuits and Controversy
Dean Foods experienced a multitude of complaints and lawsuits by various agencies throughout the years, primarily by the Cornucopia Institute – a non-profit food and farm policy watchdog group based in Cornucopia, Washington that works to maintain the integrity of organic and other types of alternative agriculture.
- 2005: Cornucopia Institute filed a complaint with the USDA (United States Department of Agriculture) alleging their subsidiary, Horizon Organic, was not following the regulations of the “organic livestock management” standards properly.
- 2008: Cornucopia Institute again filed a complaint citing Dean Foods had violated federal organic regulations which required them to provide their cows access to pasture and fresh grass.
- 2009: Another complaint was filed by Cornucopia Institute when the Silk brand made the change from organic soybeans to conventional soybeans in their soymilk but continued to use the same UPC barcodes and charge the same prices, however neglected to inform the retailers and consumers of the change.
- 2010: Dean Foods bought Wisconsin milk processing plants from Foremost Farms USA, a cooperative of more than 2,000 dairy farmers in various mid-western states. Because of this, The DOJ (US Department of Justice) along with the attorney general’s offices in the states of Wisconsin and Michigan, filed a lawsuit opposing to this sale claiming it created a monopoly.
- 2011: Dean Foods faced a class action suit over questionable health claims it made on Horizon Organic Milk packaging.
- 2012: Dean Foods made a contribution of over $253,000 to oppose California’s ballot Proposition 37 which would make it mandatory to label foods that contained any genetically modified ingredients.
- 2017: Billy Walters, a bettor and stock trader, was indicted and ultimately convicted in Federal court of insider trading in Dean shares. He received non-public information from his main source, company director Thomas C. Davis - who used a pre-paid cell phone which was referred to as “the Batphone” and used code words like “Dallas Cowboys” to mean the name of the company. It was alleged that profits were made and over $40 million in losses were avoided between 2008 and 2014 because of these dealings. This has been appealed by Walters’ lawyer.
-2019: Dairy farmers became outraged when those farmers who shipped to Dean Foods, before the declaration of bankruptcy, were contacted by Dean Foods’ lawyers to repay the money they were given for shipping milk in order to repay debt. Some farmers were asked for over $50,000. No farmer has yet paid any amount.
Interesting Trivia: Via TruMoo and Dairy Pire, over 10 million cartons of milk are sold by Dean Foods to schools every day.
Bankruptcy and Sale
In November of 2019, Dean Foods and 42 affiliate companies officially filed for Chapter 11 bankruptcy in the US District Court for the Southern District of Texas. The intention of the bankruptcy was to use the time and process to shield and preserve the ongoing business operations, as well as to focus on the debt situation and pension obligations, while looking to sell the company efficiently.
A few reasons for the bankruptcy were sited; 1.) the decrease in the overall consumption of cow’s milk and the surge and demand in plant milk, and 2.) debt and pension obligations.
The dairy cooperative, Dairy Farmers of America (DFA), agreed to buy Dean Foods on May 1, 2020 for $425 million. DFA also agreed to take over all liabilities in order to get 44 of Dean Foods’ facilities and other assets.
Dean Foods always prided itself over their commitment to providing quality, freshness, and authenticity in all of their brands, from milk to ice cream to their juice and ready-to-drink iced coffees. Their products are whole-some and they offer food and beverage items for any occasion or time of day. It’s a name to be trusted.
Information and Resources
May 6, 2020
Dean Foods Completes Sale of its Miami, Florida Facility to Mana Saves McArthur, LLC
May 1, 2020
Dean Foods Completes Sale of Assets to Dairy Farmers of America
April 30, 2020
Dean Foods Completes Sales of its Uncle Matt’s Business and the Majority of the Meadow Gold Hawaii Business
April 22, 2020
Dean Foods Announces Asset Purchase Agreement with MGD Acquisition, LLC for the Sale of the Majority of Dean Foods’ Meadow Gold Hawaii Business
April 13, 2020
Dean Foods Announces Termination of Agreement in Principle with Industrial Realty Group, LLC for the Sale of Dean Foods’ Meadow Gold Hawaii Business
April 4, 2020
Dean Foods Receives Court Approval for the Sale of Substantially All of Its Assets
March 31, 2020
Dean Foods Reaches Agreement in Principle with Industrial Realty Group, LLC for the Sale of Dean Foods’ Meadow Gold Hawaii Business
March 31, 2020
Dean Foods Announces Dairy Farmers of America as Winning Bidder for Substantially All of Its Assets
February 17, 2020
Dean Foods Enters Into Asset Purchase Agreement with Dairy Farmers of America
December 20, 2019
Dean Foods Receives Final Court Approval for $850 million in Debtor-In-Possession Financing
November 14, 2019
Dean Foods Company Receives Court Approval of “First Day” Motions to Support Normal Business Operations
November 12, 2019
Dean Foods Company Initiates Voluntary Reorganization with New Financial Support from Existing Lenders