It was just a year ago when America’s largest milk processor, Dean Foods, spun off its Silk and Horizon brands into The WhiteWave Foods Company. Since that time, WhiteWave shares grew by 62%, making it three times the market value of its old parent company, reported The Wall Street Journal Friday.
Dean still holds three times the revenue of its little brother, but it’s share price dropped 17% since the spin-off. Whether it’s the aggressive advertising by the plant-based brands in WhiteWave, a changing demographic, or something else, dairy milk and cream has fallen from above 250 pounds per capita in 1975 to just 195 pounds per capita in 2012.
Dean has closed 8 of its about 80 plants in 2013 and plans to shutter three more this year. With 36% of the U.S. fluid-milk business, it aims to be the country’s lowest-cost producer, but is holding $963 million in debt as of March 31, halving its $1.8 billion held in March of 2013.
With record high milk prices, Dean’s input costs rose. To battle back, it expects to expand its TruMoo Protein Plus drink, with 25 grams of protein per 14 ounces of milk, across the country.
Source: The Wall Street Journal