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Dairy Farmers of America to Buy Dean Foods

Dairy Farmers of America (DFA) agreed to purchase Dean Foods for $425 million.

The cooperative will also assume Dean’s liabilities as part of the deal to acquire 44 of the company’s facilities, as well as other assets necessary to operate the facilities.

“We have had a relationship with DFA over the past 20 years, and we are confident in their ability to succeed in the current market and serve our customers with the same commitment to quality and service they have come to expect,” said Eric Beringause, president and CEO of Dean Foods.

In Nov. 2019, Dean Foods filed for bankruptcy amid an overall decline in dairy. “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,” Beringause said.

As people are increasingly moving away from dairy, dairy producers are getting creative and introducing new innovations to attract customers, reported Bloomberg (Feb. 14). Innovations include new flavors, dips, new packaging, and even cartons with cookies attached.

“People love cookies in milk,” said Tony Sarsam, CEO of Borden Dairy Co., which is planning the cookie-marketing strategy for 2021. “It will be a size that you can actually eat in the car. Put it in the cup holder, and you can dip the cookie.”

Borden intends to double its spending on product innovation over three years, according to Sarsam. New products from the company include seven dairy dips hitting the market this month, as well as new light chocolate- and vanilla-flavored beverages targeting adult women.

DFA plans to make more shelf-stable products and also sees flavors as a key area for growth. The group recently experienced success from its wild bluerry and coffee flavors under its Oakhurst brand, according to Doug Dresslaer, director of cultural innovation. In 2019, the group also launched a beverage branded Dairy Plus Milk Blends, which blends cow and plant products.

“Consumers demand energy, comfort, health—you will see a lot more products introduced to meet those needs,” said Paul Ziemnisky, EVP of global innovation partnerships for marketing group Dairy Management Inc. “Valued-added beverages are in that arena, like high protein and low sugar.”

Dairy Management is also emphasizing new farm practices and technologies that helped make the industry greener. Dairy accounts for only about 2% of total greenhouse gas emissions in the U.S., according to the group.

“Milk has better nutrition components than alternative competitors, it does better in a taste study and is significantly cheaper—so it’s just about reinventing itself,” said Tom Bailey, a senior analyst at Rabobank.