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News

Today’s Pickup: Got (no) milk: Dairy giant Dean Foods files for bankruptcy

Plus: Amazon takes a hit in Seattle; the first all-electric mobile health lab

Good day,

“If we would go back 30 years to 1989, milk was present at 15% at all occasions in the home. Fast-forward to today, that number is now 9%,” Darren Seifer, NPD’s food and beverage industry analyst, told Fast Company on Nov. 12. “It’s a pretty steep decline in how often we’re having milk, not to mention dairy alternatives.” Seifer was quoted in a story about Dean Foods, the nation’s largest milk producer, filing for bankruptcy earlier this week. The $10 billion company has struggled as millennials shifted to plant-based milks and Walmart, a former customer, opened its owned dairy plants. Dean Foods’ sales declined 7% in the first half of the year, and profit fell 14%. So far in 2019, the company’s stock has lost 80% of its value. The Dallas-based company’s brands include DairyPure, TruMoo, Land O’Lakes, Country Fresh, Dean’s, Garelick Farms and Friendly’s.

Did you know?

Tariffs the U.S. imposed over the past two years – and retaliatory tariffs that followed – threaten more than $186 billion in U.S. economic activity and could add $31 billion to $35 billion in additional costs to manufacturers and consumers, according to a study released Nov. 12 by the Port of Los Angeles.

Via FreightWaves

Quotable

“If they’re going to throw things at us as if they are a news story, it does have to be vetted as a news story. If they are going to throw a picture of a ball at us because they want us to buy a ball, it’s very different.”

Author Ben Mezrich, on Facebook needing to vet the content of political ads (FreightWaves)

In other news

Egyptian transport start-up targets Philippines, Bangladesh after Pakistan launc

Swvl, an Egyptian startup with an app to book bus tickets, plans to launch operations in the Philippines, Indonesia and Bangladesh by the end of next year.(Reuters)

Port of Auckland hydrogen plant delays won’t affect 2020 opening

The facility, which will be the first of its type in Auckland, will initially produce the carbon-free fuel for forklifts and cars. (Stuff.co.nz)

UCLA health center receives electric Winnebago as nation’s first zero-emission mobile surgical instrument lab

The mobile facility will travel between UCLA hospitals to sterilize surgical instruments. (PRnewswire)


Amazon loses as avowed socialist declares victory in Seattle city council race

The e-commerce giant tried (and failed) to swing the election by giving $1.5 million to an opponent through a political action committee. (Vox)

Final thoughts,

The trucking industry is stepping up opposition to AB5, the California labor law that seeks to limit the use of independent contractors. On Nov. 12, the California Trucking Association (CTA) filed a legal challenge against the bill, stating that more than 70,000 independent truckers will be unable to work under the new law, FreightWaves reported. “At the core of the trucking industry of this fight is that 80% of our drivers don’t have college educations,” Chris Shimoda, vice president of government affairs for CTA, said. “So the pathway for them to become entrepreneurs and to become part of the middle- and upper-middle class that has been an opportunity is to own multiple trucks and become part of the American dream.”

Hammer down, everyone!

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Linda Baker, Staff Writer

Linda Baker is a FreightWaves staff reporter based in Portland, Oregon. Her beat includes mobility, emissions regulations and autonomous trucking. Please send tips and story ideas to lbaker@freightwaves.com.

2 Comments

  1. Apparently Dean Foods is in great need to seek ways to lower their prices . Some of their milk products sell for more than twice the average price of private label milk .

    In the early years of the 2000’s Dean Foods had acquired “WhiteWave Foods” (maker of Silk the nation’s leading refrigerated soymilk) .

    In 2012 Dean Foods decided to spin off WhiteWave Foods to focus on growing their core dairy business . Big mistake in my humble opinion(writer of article on Seeking Alpha apparently agrees with my opinion ). In 2016 Danone made a buyout offer of $10 Billion pounds($12.5 Billion US) which was accepted . The takeover concluded in 2017 .

    The unfortunate fate of Dean Foods is due to nothing less than mismanagement and focusing on growing their core dairy business while dairy consumption and demand was decreasing for decades .

    There’s a great article titled : Dean Foods Fights An Uphill Battle Against The Dairy Industry , that was written in 2017 on Seeking Alpha which I recommend reading .

    Meanwhile , WhiteWave Foods is performing well but slowed recently .

    Danone 2019 Third-Quarter Sales Press release – Paris, October 18, 2019

    ESSENTIAL DAIRY AND PLANT-BASED (EDP)
    Quote:
    “Essential Dairy & Plant-based (EDP) posted in the third quarter net sales up +0.7% on a like-for-like basis, including a +3.4% increase in value, and a -2.7% decline in volumes. North America and CIS are facing challenging consumer environments, while momentum outside of these regions continues to be positive. Plant-based delivered consistent strong growth, including a double-digit growth of Alpro.

    Europe delivered in Q3 another quarter of slightly positive growth, as Danone continues to make progress in the transformation of its dairy business to move its portfolio towards new generations, and in the execution of its plans to expand plant-based business in the region. North America reported flat sales in Q3 with a mixed performance between segments: Coffee Creamers and Plant-based (excluding Vega) posted solid growth while Yogurts held market share in a declining category and Premium Dairy reported declining sales despite the good performance of the core business under Horizon brand, given further discontinuation of some non-core business. In CIS, sales were down low single-digit as in Russia premium functional yogurts are impacted by a consumer trade-down. Latam posted moderate growth driven by Mexico and in Aspame, Morocco delivered double-digit sales growth. ”

    Quote;
    “Danone CEO Says Plant-Based Could Become as Big as Dairy in U.S.”

    “Dairy at Danone down in volume, but up in value “(Danone article and financials October 2019)

    In my humble opinion ……….

  2. I sat next to a Dean’s Foods guy at a shipper / carrier conference a few years ago. He was an arrogant ass. He didn’t want to give loads to small carriers (less than 500 trucks to him) because we were “too much work” even though he knew the price was higher.

    So…F- you Deans and your lazy ass employees who thought they were too good for us small carriers. THAT is why you are going b-bye bye.

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