Milling & Baking News Corporate Profiles - November 2013 - (Page 89)

Dean Foods Co. Transformation to core dairy focus continues I t has been a busy year at Dallas-based Dean Foods Co. as it transforms from three distinct segments into a single dairy business core that has involved the spin-off of WhiteWave Foods Co., the sale of its Morningstar Foods segment, significant debt reduction, stronger cash flow, the closing of plants and management changes. Dean Foods previously operated with three distinct business units: WhiteWave (Silk, Alpro, Horizon Organic and International Delight brands), Morningstar (cultured and extended shelf life products) and Fresh Dairy Direct. WhiteWave was spun off through a combination of an initial public offering in late 2012 and distribution of shares to Dean Foods' shareholders earlier in 2013, although Dean still owns 20% of WhiteWave. Morningstar was sold to Montreal-based Saputo, Inc., for $1.45 billion early in 2013. Former Dean Foods chief executive officer Gregg Engles became c.e.o. of the separate WhiteWave, and Gregg Tanner became c.e.o. of Dean Foods last year. In October 2013 the company announced other management changes, including the positions of chief commercial officer, operations and procurement and logistics. "Our focus on volume growth, cost savings and effective pricing remains unchanged, and we believe these changes to our executive structure will further improve our performance," Mr. Tanner said. The "new" Dean Foods is focused on fluid milk, even though the former Fresh Dairy Direct once was seen as the laggard of the three segments. But the disposal of WhiteWave and Morningstar generated significant revenue that has allowed the company to improve cash flow, reduce debt and focus on its core business. On March 31, Dean Foods reported $1,034 million in net debt, down 55% from Dec. 31, 2012, and down 72% from Dec. 31, 2011. Part of its new focus involves closing 10% to 15% of its plants to eliminate fixed costs and reduce distribution routes. Ten to 12 plants have been closed in the past couple of years, and with additional closings planned. Dean Foods operates about 75 plants across the country. About 75% of Dean Foods' business now is focused on fluid milk, with ice cream, cultured products, creamers and other beverages making up the rest. It is about five times larger than its nearest competitor, the only fluid milk processor with nationwide processing Top brands - Chief executive officer - 2012 global sales - Gregg A. Tanner Corporate Profiles and distribution networks, and No. 1 or No. 2 in sales in 80% of the U.S. market. Dean Foods' top brands include its TruMoo flavored milk, which is its largest national brand with $636 million in retail and school sales in 2012. TruMoo was ranked as the fourth most successful packaged goods brand of 2012 by Information Resources, Inc. TruMoo was launched in August 2011 with its chocolate milk containing 15% to 20% less sugar than other brands, according to the company. It was reformulated and relaunched earlier this year with about 40% less added sugar than its previous formula. While its focus on fluid milk won't be without its struggles, including fluctuating prices, shrinking margins and years of declining per capita consumption, Dean Foods said it is now in a better position to capitalize on the $20 billion U.S. milk market. "We believe ... we will return to our long-term trend of gaining share due to the strength of our network, our advantaged cost structure, effective pricing, our strong brands and a significantly strengthened balance sheet, and a focus on service, quality and customer relationships," Mr. Tanner said at the company's annual meeting May 15. CP $11.5 billion Swiss Premium TruMoo Pet Dean's Land O'Lakes Meadow Gold Garelick Oak Farms Milling & Baking News * Food Business News * Baking & Snack * Meat & Poultry November 2013 / 89

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - November 2013

Milling & Baking News Corporate Profiles - November 2013