US Dairy Giant Drops Suppliers as Vegan Market Soars - Wholesome Culture - Blog
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By: Kaitlin Meilert

Demand for plant-based milk is sweeping across the nation and potentially taking America’s biggest milk producer with it.

Dean Foods Co., the largest dairy company in the United States, announced that it will end contracts with at least two dozen of its dairy suppliers on May 31 amid decreasing demand for dairy.  

According to Bloomberg, Dean Foods’s shares fell 52 percent in the past 12 months as consumer demand continues to shift toward plant-based milk. Despite low demand, the dairy industry is experiencing an overproduction of dairy, a factor that played a big role in the company’s decision to cut ties with so many suppliers, according to Reece Smith, director of corporate communications at Dean Foods.

VegNews reports that U.S. dairy farmers had dumped 78 million gallons of excess milk between January and May of 2017. Meanwhile, the global dairy-free market is projected to grow by 16.6 percent to $35 billion by 2024, according to a study by Grand View Research, Inc.

(Source: goodkarmafoods.com)

Not one to cry over spilled milk, Dean Foods took advantage of the growing plant-based market in May 2017 by making a small investment in Good Karma Foods, a company that produces flaxseed-based milk and yogurt. As Dean Foods drops its dairy suppliers, the company is debating whether to up their stakes in flax and become a majority shareholder in Good Karma Foods.

“It’s a really, really cool brand, and it’s growing,” Dean Foods CEO Ralph Scozzafava told Bloomberg. “It grew pretty dramatically last year.”

Dean Foods Co. is not alone in their potential shift from dairy products to their plant-based counterparts. From dropping suppliers to investing in plant-based brands, here is how other companies are handling the downfall of dairy:

  • International dairy producer Arla Foods ceased contracts with 11 of its dairy suppliers in May 2018 due to overproduction in dairy.
  • Danone, parent company of Dannon yogurt, acquired vegan-friendly company WhiteWave Foods for $12.5 million in 2016. WhiteWave is the parent company of vegan brands Silk, So Delicious, Vega, and Alpro.
  • Since 2016, General Mills has invested in vegan cheese and yogurt brand Kite Hill, plant protein bar producer D’s Naturals, kale chip company Rhythm Superfoods, and probiotics brand Farmhouse Culture.

Demand for plant-based alternatives is definitely on the rise, and we can’t wait to see what our favorite vegan brands can create with backing from big players like Dean Foods!

And while we’re on the topic, what’s your favorite plant-based milk? Let us know in the comments below!

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