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Dean Foods Files Chapter 11 Bankruptcy: News. Producer Questions. FAQ Sheets

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UPDATE – posted 6:35 pm Tues, Nov. 12:  “Emergency Relief Has Been Requested. A Hearing will be Conducted on this Matter on November 13, 2019 at 2:30 pm [CST] in Houston Tex.”   This information per court documents, TXSB.

Dean Foods, the nation’s largest processor of fluid milk, has filed Chapter 11 Bankruptcy in the Southern District of Texas. According to a company news release, Dean Foods states the company is working toward an ‘orderly and efficient sale of the Company.”

In the same release, Dean Foods also states it is “engaged in advanced discussions with Dairy Farmers of America, Inc. (“DFA) regarding a potential sale of substantially all assets of the Company. If the parties ultimately reach agreement on the terms of a sale, such transaction would be subject to regulatory approval and would be subject to higher or otherwise better offers in the bankruptcy.”

Related to the announcement, Dean Foods cancelled its regular Quarterly Earnings Call, which was scheduled to occur at 9:00 am on the morning of Nov. 12.

Information about the actions and proceedings can be accessed at http://www.deanfoodsrestructuring.com.

The major concern for dairy farm communities – especially the farmers, and  related agribusinesses and community small businesses across the country who serve those farmers – will be how independent dairy farms, who ship directly to Dean Foods plants, will be affected, treated, and compensated during the Bankruptcy proceedings.  Those detailed answers are not available at the time of this initial posting (11:50 am, EST, Nov. 12).

At this time, there are more unanswered questions than answers, and no doubt there will be many anxious farmers and co-ops around the country who depend on milk checks from Dean Foods.  It will take time for accurate answers and solutions to be found as this process works through the reorganizational Bankruptcy process.

For now, here are some FAQ sheets, as posted at http://www.deanfoodsrestructuring.com:

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Here is the related News Release as posted at http://www.deanfoodsrestructuring.com:

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As the news broke on the morning of November 12, here are some additional links from financial news outlets:

From ‘Seeking Alpha’: Initial (breaking) News Release – Dean Foods Files Chapter 11; posted at 7:09 am  – with a link to the news release below:

From ‘Seeking Alpha’: Dean Foods Company Initiates Voluntary Reorganization with New Financial Support from Existing Lenders, a posting with these bullets:

  • Company secures commitments for $850 Million in DIP Financing to Support Operations
  • In Advanced Discussions with Dairy Farmers of America Regarding a Potential Sale
  • Business Continues Regular Operations; Customer Receiving Uninterrupted Supply of Dairy Products as Normal

From ‘Seeking Alpha’: Dean Foods EPS misses by $0.72 – posted at $9.38 am

More information will be posted as it becomes available.

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Eric Beringause named CEO of Dean Foods; brings a Record of Transformation

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Eric Beringause is the new CEO and President of  Dean Foods, the nation’s largest processor and distributor of fresh fluid milk and dairy case products.  He replaces Ralph Scozzafava, who has stepped down.  Beringause’s tenure began on July 29, 2019.

Mr. Beringause brings over 30 years of experience in the dairy, consumer products, and food processing industries to his new position.  Most recently, he was the CEO of Gehl Foods, the nation’s largest processor of nacho cheese.  Through his career, he has worked for a variety of companies such as Nestle, ConAgra, Alcoa, and Pillsbury.  His work portfolio includes private-label and branded products.

As the nation’s largest processor of fluid milk, the performance of Dean Foods in turns affects the fortunes of tens of thousands of dairy farms and regional farm economies across the United States.

It is no secret that the dairy industry itself, as well as Dean Foods, has seen its fair share of difficulties in the past two years;  Mr. Beringause faces daunting challenges in turning the company around.  Jim Turner, non-executive chairman of the Dean Foods Board, expresses confidence Beringause is the person for the job in a news release: “He has a long track record of creating value in dairy and consumer products companies, as well as a unique combination of turnaround and operational expertise.”

Upon the news of the CEO change late on Friday afternoon, July 26, Dean Foods stock rose in off-market trading over the weekend, rolled a bit during the day on Monday, July 29, and at the close of business, closed up 2 cents/share from Friday afternoon’s closing value of $1.25.  On Tuesday, July 30th, the stock had climbed again to $1.36 at closing.

Following is the original news release, along with some additional public information about Mr. Beringause:

The original news release from PR Newswire:

DALLAS, July 26, 2019 /PRNewswire/ — Dean Foods Company (DF) today announced that Eric Beringause has been appointed President and Chief Executive Officer and a member of the Dean Foods Board of Directors, effective July 29, 2019. Beringause succeeds Ralph Scozzafava, who has stepped down as CEO and resigned from his position on the Board.

Beringause brings to Dean Foods more than 30 years of transformational leadership and operational experience at a broad range of blue-chip brands in the food, beverage and consumer products industries, including expertise in food processing and branded and contract manufacturing. Most recently, he served as CEO of Gehl Foods, LLC, a market-leading producer of dairy-based beverages and food products. Prior to that, he served as CEO of Advanced Refreshment LLC, one of the largest U.S. producers of private-label bottled water and water-based beverages, and as CEO of Sturm Foods, Inc., a leader in private-label food products, specialty food brands and contract manufacturing. Earlier in his career, Beringause held various business development, finance, and sales and marketing roles at Alcoa Consumer Products, Gerber Infant & Baby Products, ConAgra, Inc./Grist Mill, Nestle, Inc., Nabisco Brands and The Pillsbury Company.

“We believe Eric is the right leader to drive the transformation of the business as the Company continues to execute on its enterprise-wide cost productivity plan and its previously announced exploration of strategic alternatives,” said Jim Turner, Non-Executive Chairman of the Dean Foods Board. “He has a long track record of creating value in dairy and consumer products companies, as well as a unique combination of turnaround and operational expertise.”

“I am honored to join Dean Foods at this important juncture,” said Beringause. “Dean Foods is the nation’s largest dairy processor and a leader in the industry, and I am excited to work with the Board and management team to leverage our scale and substantial assets to realize the significant opportunities available to transform our company. My top priority will be to ensure we have the right footprint and strategies in place to drive sustainable growth and profitability for the benefit of our shareholders, employees, customers and other stakeholders.”

Turner continued, “On behalf of the entire Board, I want to thank Ralph for his service and contributions to Dean Foods over the past five years. We appreciate his dedication to the Company and we wish him all the best in the future.”

Upcoming Webcast of Second Quarter 2019 Earnings Conference Call
The Company will host a live webcast of its second quarter 2019 earnings conference call on Tuesday, August 6 at 9:00 a.m. Eastern Time. The webcast is expected to last approximately one hour and will be accessible by visiting http://www.deanfoods.com/our-company/investor-relations/ and by clicking “Webcasts.”

The webcast will be accessible on most operating systems and browsers. A webcast replay will be available for approximately 45 days following the event within the Investor Relations section of the Company’s website.

About Dean Foods:
Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, the country’s first and largest fresh, national white milk brand, and TruMoo®, the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena®, Berkeley Farms®, Country Fresh®, Dean’s®, Friendly’s®, Garelick Farms®, LAND O LAKES®* milk and cultured products, Lehigh Valley Dairy Farms®, Mayfield®, McArthur®, Meadow Gold®, Oak Farms®, PET®**, T.G. Lee®, Tuscan® and more. Dean Foods also has a joint venture with Organic Valley®, distributing fresh organic products to local retailers. In all, Dean Foods has more than 50 national, regional and local dairy brands as well as private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Approximately 15,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.

*The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license.
**PET is a trademark of Eagle Family Foods Group LLC, under license.

CONTACT: Investor Relations/External Communications, Suzanne Rosenberg, +1 214-303-3438. Media please contact +1 214-721-7766 or media@deanfoods.com

 

Additional Background Information about Mr. Beringause:

Vassar:  Mr. Beringause serves on the Board of Trustees of Vassar College, from whom he received his undergraduate degree.  A biography can be read on Vassar’s website, or is posted here:

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Giving Back: Related to experiences and friendships which began with a summer job while at Vassar,  Mr. Beringause has been a huge supporter of an effort which builds up the Navajo nation, assists the Student Conservation Association, and involves telecommunications – all at the same time.   And he believes that teaching the ‘why’ is important.  Learn more in “That Vassar Serendipity – Three Alums Find a Common Cause,” a part of the Vassar “Stories” series.

Management Board of CP Kelco / a Division of Huber:  Mr. Beringause is a member of the Management Board of CP Kelco, a consumer products division of Huber, which processes .nature-based’ ingredients for the food industry.

 

From FoodDive – a perspective on the circumstances which led to this change:

Dean Foods Replaces CEO with Eric Beringause amid Continued Struggles; by Lilliana Byington for Food Dive.  Insights from this article’s author describe the company’s struggles, the challenges ahead, and Beringause’s record.

In recent years, opinions about Dean Foods and its future have been offered by every level of the dairy supply chain from dairy farmers to financial outlets to board rooms across the nation.  A change has occurred.  The entire dairy economy will benefit from a healthy and vibrant Dean Foods. We are hoping that Mr. Beringause is indeed, the leader with the skills to build a positive future – many dairy communities will be counting on it.

 

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Georgia hosts 2019 Dairy Challenge – 18th in the Series!

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Source: Renee Smith, Dairy Challenge Publicity

Tifton, GA, March 30, 2019:     Collegiate dairy students – 240 in total – from 29 different states and Canadian provinces traveled to Georgia for the 18th annual Dairy Challenge.® This trip to the Southern Region of the dairy industry was a great chance for students to put to use all they have learned about analyzing dairy farms and learn new things about this unique region for dairy.

Tifton, Georgia, was home base for the 2019 North American Intercollegiate Dairy Challenge® (NAIDC) held March 28th to the 30th, with eight area dairies participating in the educational event. Dairy students from 44 colleges worked to improve their dairy management and communication skills, networked with other students, and explored industry careers.

“Dairy Challenge represents all that is great about the dairy industry, as we see dairy producers, universities and industry professionals all come together to provide these students – the next generation – be prepared to enter the workforce and make great contributions to dairy’s future,” explained Dr. Maurice Eastridge, Professor and Extensions Dairy Specialist at The Ohio State University and NAIDC Board Chairperson.

Dairy Challenge is a unique, real-world experience where dairy students work as a team and apply their college coursework to evaluate and provide solutions for an operating dairy farm. In Tifton, two programs ran concurrently – the 18th annual Dairy Challenge contest and the seventh annual Dairy Challenge Academy. The events were coordinated by the NAIDC Board of Directors and the Southern Regional planning committee.

This year’s contest participants included 36 universities, whose four-person teams competed for awards based on the quality of the teams’ farm analysis and appropriate solutions. Their farm presentations were evaluated by a panel of five judges, including dairy producers, veterinarians, finance specialists and seasoned agribusiness personnel.

The Academy added another 7 schools to the event, providing interactive training for 96 students from four-year universities or two-year dairy programs. Academy participants were divided into smaller groups including students from various schools, and dairy industry volunteers worked as advisors to coach these less-experienced Academy participants as they assessed the dairy and developed recommendations.

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Dairy Challenge Applies Learning to a Real-world Dairy

Over its 18-year history, Dairy Challenge has helped more than 6,900 students prepare for careers in the dairy industry, dairy production and veterinary medicine.

The three-day event began with learning stations at Pecan Grove Dairy and Grassy Flats Dairy, where students learned from industry experts on cow comfort, milking protocols, feed center management and other key areas. Back at the University of Georgia – Tifton Convention Center, students enjoyed pecan pie and peach cobbler, as they poured over the in-depth dairy records for their assigned dairy.

Day two began with the on-farm analysis, with all students having just two hours to visit their assigned dairy and witness the dairy’s operations. After a question & answer session with the farm owners and advisors, the student teams developed specific recommendations on the areas they thought the dairy should focus on to make the greatest impact on improving their business.  These suggestions are accompanied by an economic assessment of their recommendations.

On Day Three, students presented their assessments and conclusions to the judging panel, visited with sponsors at the Career and Innovation Fair, and learned through dairy technology presentations from top Dairy Challenge sponsors. These talks were presented by:

·         Melissa Redd, Regional Lending Manager, AgGeorgia Farm Credit – “More than a Loan, A Relationship”

·         Jorin Ouwinga, Dairy Specialist, Land O’Lakes, Inc. – “Don’t Limit Your Expectations”

·         Josh Hushon, US Dairy Marketing Communications Lead, Cargill – “Farm Decision Making: Unlocking the Power of Data and Analytics”

·         Kristi Fielder, Director of Production, URUS – “Inside the Bull Barn: The Other Side of the A.I. Industry”

·         Jack Hippen, North American and EU Sales Director, ST Genetics – “Preparing for the Real World in Agriculture”

·         Dave Whitlock, Regional Sales Manager Southern Region, Premier Select Sires – “Don’t Strive to Survive Through Change but Rather Thrive with Change.”

 

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Eight College Teams Earn Top Awards

At Saturday evening’s banquet, the following contest teams and students were announced as First Place winners, with each student receiving a $200 scholarship.

·         California Polytechnic State University: Hank DeVries, Alexandra Gambonini, Elisabeth Regusci, Elise Regusci, Coached by David Vagnoni

·         Michigan State University: Monika Dziuba, Lauren Heberling, Ariana Negreiro, Jared Sanderson, Coached by Roger Thompson

·         Texas A&M University: Haley Hill, John Leibham, Marta Pulfer, William Wolf, Coached by Sushil Paudyal

·         Washington State University: Olivia Brockhaus, Colton Bunyard, Morgan Hawley, Taylor Wilson, Coached by John Swain

Teams and students earning Second Place and $100 student scholarships include:

·         University of Wisconsin – Madison:  Rachel Gerbitz, Zachary Lensmire, Riley Miller, Danielle Warmka, Coached by Ted Halbach and Dave Combs

·         University of Guelph: Julie French, Lauren Westerlaken, David Westerveld, Jenna Wight, Coached by Trevor DeVries and Matt Groen

·         Cornell University: Benjamin Dye, Nolan Feldpausch, Simon Johnson, Christopher Sweeney, Coached by Mike Van Amburgh

·         SUNY Morrisville:  Austin Graham, Janet Hanehan, Kayla Heineman, Katherine Schultes, Coached by Steve Mooney

All Dairy Challenge contest participants received a lifetime membership to Dairy Shrine.

Total Industry Effort

Six dairy farms opened their farms for analysis and in exchange received a wealth of ideas from students and judges. Host farms for the 2019 Dairy Challenge were:

·         Leatherbrook Holsteins LLC, Americus, GA

·         Barrington Dairy LLC, Montezuma, GA

·         BrooksCo Dairy LLC, Quitman, GA

·         Schaapman Holsteins, Abbeville, GA

·         Highbrighton Dairy, Montezuma, GA

·         WestBrook Dairy, Dixie, GA

·         Pecan Grove Dairy, Baconton, GA

·         Grassy Flats Dairy LLC, Pavo, GA

“On behalf of all the students and organizers, we sincerely thank the hundreds of individuals and organizations that made this event possible,” said Jillian Bolan, Co-Chair of the event. “We look forward to interacting with these students as they continue onto careers as dairy owners, managers, consultants and the many other support roles that make dairy possible.”

About Dairy Challenge

NAIDC is an innovative event for students in dairy programs at North American post-secondary institutions. Its mission is to develop tomorrow’s dairy leaders and enhance progress of the dairy industry, by providing education, communication and networking among students, producers, and agribusiness and university personnel. Over its 18-year national history, Dairy Challenge has helped prepare more than 6,900 students for careers as farm owners and managers, consultants, researchers, veterinarians or other dairy professionals. The next national event will be hosted in Green Bay, Wisconsin on March 26-28, 2020.  Four regional events will be held in late fall and winter; details are at www.dairychallenge.org.

 

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Fulfilling a Milk Drive Legacy: Randy Davis Memorial Fund Purchases in June Dairy Month

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The Passion of Randy Davis for promoting the goodness of milk is legendary to those who knew him, or who ever encountered him.

His legacy will continue to touch thousands of families this June Dairy Month 2017 following Randy’s untimely death in November of 2016.   To honor Randy’s life mission, the Randy Davis Memorial Milk Drive Fund was established.  Thanks to the kind generosity of his friends, family, and dairy community, the fund thus far has accumulated approximately $5,000, with contributions still coming in.

Following Randy’s life example, the Memorial Fund was set up to accomplish these goals:

  • To honor Randy’s passion for dairy farming and milk itself
  • To honor Randy’s impact on the Southeast dairy community, and his love for regional farms and dairy farm neighbors
  • To get fresh, nutritious milk into the hands of families who need it the most, with distribution to be accomplished by area Food Banks and charitable organizations
  • To connect area farms with their non-farm neighbors

Thus, the fund monies are designated to purchase brands of milk who source milk from southeast farms, reinforcing that milk is not only a nutritional powerhouse, but is also an economic generator in local economies.   The milk purchased is to be donated primarily to Second Harvest, who will then distribute it to local food banks through their networks. Other charitable organizations may benefit as well.

Because June Dairy Month was a highlight of the year for Randy, it was only natural that this month was a fitting time to accomplish those milk buys, donations, and deliveries.

Those funds are  currently being dispensed through a combination of private milk purchases in bulk quantities, and through milk buys at on-site milk drives taking place at Knoxville-area Ingles stores on June 1st, 2nd, and 3rd.   It is anticipated a final ‘buy’ will take place later in the summer, hopefully by July 1st, with the method yet to be determined.

Purchase Event 1 – Memorial Fund Private Buy with Mayfield Dairy

The first purchase was completed on May 30, 2017 at the Mayfield Distribution Center in Knoxville, TN.    A group of Randy’s family, Second Harvest officials, Mayfield officials, and Memorial Fund Administrators gathered to mark the occasion.

824 gallons! A total of 824 gallons was delivered to Second Harvest – East Tennessee, who will then distribute those gallons to local food banks in their 18-county service area.  572 gallons were purchased with Memorial Funds, and Mayfield generously donated an additional 252 gallons!  We cannot thank Mayfield Dairy enough!

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In the photo from left:  Roy Settle, First Bank & Trust, and Steve Harrison, Memorial Fund Committee members, John Randel, Tyler, and Alli Davis Kamper, Mark Aranda and Aaron Snukals, Second Harvest East TN, Kris Thomas, Mayfield Distribution Center, Lynn Davis, Samantha Davis Craun, Cindy Curtis, Violet and Gene Davis (Randy’s parents).

Purchase Event 2:  Memorial Funds will buy milk at Knoxville Ingles Milk Drives

For the past four years, Randy had been instrumental in facilitating and organizing on-site Milk Drives at area retailers in East Tennessee.  These milk drives, some early ones at Kroger, with the bulk of them occurring at area Ingles groceries, are supported by Tennessee’s Dairy Farm Families via the Tennessee Dairy Promotion Committee.

Country Q 100.3, a Knoxville area radio station, and Ingles groceries have been welcome and excellent partners in these drives.  The total events have been coordinated by Kay Bradley, who personally has purchased lots of milk for the drives.

To further honor Randy, this year’s store milk drives have been designated the “Randy Davis Memorial Milk Drives” by Q 100.  They even have a tab at their home page!

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If a person wishes to contribute but can’t make it to one of the stores, contributions can be made online here!  

This year’s on-site Milk Drives are schedule for June 1-3.  In short, customers who visit stores are encouraged to purchase milk from the store’s dairy case and then bring to a Second Harvest refrigerated truck who collects milk during the event. Last year’s event yielded approximately 4,000 gallons total for Second Harvest.  (Learn More.) 

Monies from the fund will make two purchases, in the amount of $850 each, at the store events on Friday, June 1st, at the Lenoir City Ingles, and on Saturday, June 2nd, at the Farragut Ingles.

Lenoir City is in Loudon County, Tennessee’s #1 County in Milk Production (also Randy’s home county!), so it was a natural to make a purchase there.  The Memorial Fund will make a purchase at approximately 6:30 pm (some will be traveling back from Nashville).

The Farragut Milk Drive on Saturday, June 2nd, will be joined by two UT Football #VFLs (Vols for Life)!  We’re so happy to announce that Jayson Swain, a Vol Network commentator, and Antoine Davis, who administers the Vol For Life Program, will be in attendance to help promote the cause!

We invite any of Randy’s wide circle of friends to join us at either of these events!

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Randy was a man of deep faith, and many have been privileged to hear his testimony.

“Whatever you did for one of the least of these brothers and sisters of mine, you did for me,”  is a life’s instruction found in Matthew 25, verse 40.

As we honor Randy in this first June Dairy Month without his physical presence here on Earth, his faith, illustrated by this verse, will live on through his Memorial Fund purchases and these milk drives.

The Davis Family, the Fund Administrators, and the Dairy Community are grateful to each and everyone who has helped to see that Randy’s legacy continues on.

There will be more in the coming days about the Memorial Fund activities and the Milk Drives, but for now “Thank You.”  We hope to see you at one of the Milk Drive Events!

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