- Athens, TN (Mayfield)
- Birmingham, AL (Ice Cream)
- Nashville, TN (2 plants – Purity and Country Delite)
- High Point, NC
- Winston-Salem, NC
- Spartanburg, SC (Pet)
- Orlando and Orange City, FL (TG Lee)
Did anyone ever ask the Shelf Stocker? When it comes to milk cartons, that is.
It’s been a busy past few months for dairy farmers and dairy industry associates all over the United States. Whether it’s called conference or summit or convention, dairy folks across the United States have been in session after session in the months from November to March, sometimes (often!) referred to as “Meetin’ Season.”
I can’t remember a session for the past few years where the term ‘innovation’ hasn’t been used. Sometimes, the term refers to new dairy products, but it is used equally as much in reference in packaging and handling for milk and other dairy products.
Balancing the costs associated with bringing milk and milk products to market along with visual elements which attract consumer purchases is like walking a high-wire across the Grand Canyon. With dependable fluid milk sales losing market share to the ‘newest and shiny’ dairy toy, every level of the supply chain is in perpetual review.
On the way back to the ‘home office’ after one of those winter dairy meetings, I stopped by a grocery store to grab some milk. (Whole milk, if you must know, and a brand in a yellow jug which I know comes from many farms in my area).
As I often do, I just stood there evaluating the dairy case – fluid milk. There were private label commodity milks from far away (over the ‘within 400 miles “Local” definition’ in the 2008 Farm Bill), a branded local milk, high-margin blended milks, and fake milks which are trying to convince consumers they are better than real, whole, milk. Additionally, all of the ‘fakes’ (aka plant-based beverages) do nothing for farms and the farm economy in our southeast area of the US; the crops or products used in them cannot be traced to a farm in the southeast.
While I was looking at the case, a very pleasant young man, the stocker clerk for the evening, brought out several cases of the yellow jug to place in the shelves. Those yellow jugs are delivered in the plastic, open top milk crates which are as popular for home decor as for milk deliveries.
He then brought out some of the far-away jugs shipped in brown cardboard cases. In many dairy discussions with farmers, industry folks indicate that the brown cardboard is preferable to the traditional crates. Notice I said ‘industry folks.’
So, I just asked the clerk, a young man on the front line of consumer connections and milk sales, if he would answer a question for me, and he politely said “Sure, if I can, ma’am.”
My question to the stocker: From your perspective, do you prefer the cardboard carton, or the plastic milk crate?
The stocker clerk’s response was this: “I prefer the plastic crates. For one thing, they are sturdier than the cardboard. And also, their open top saves me time – I don’t have to cut open and fold cardboard boxes for bundling. I just reach in and get cartons and put them on the shelf.”
He went on to tell me of several times the cardboard cartons had weak spots in them, and extra care was required in handling. He even had a cardboard carton break open one time, and jugs of milk fell out, crashed open, and milk went everywhere – including all over him. (Anyone who’s had milk spill on them can identify with the dilemma, why you want to get it cleaned up quickly, and the extra time it takes to make sure you get all of it!)
His response made sense to me – lots of sense, actually. And anyone who has ever figured ‘time as money’ is likely to think it makes sense, too. Those plastic milk crates actually still have some positives, and we need to remember that. They are appreciated by some folks, and their reasons make common sense. (Not to mention the physical benefits, since you get a bit of a workout while moving those cartons!)
In a society where we far too often see those on the frontlines of any type of ‘work’ never asked what they think about a situation, it is all too believable, too.
Has anyone ever considered the perspective of stocker clerks everywhere who do the actual work of getting milk on shelves, or has anyone ever done a ‘study’ or survey about what they would recommend? Should their thoughts count on what is best for fluid milk and helping it re-gain traction?
The concept of moving more fluid milk is on smart dairy people’s minds, because it is generally the product which can be brought to market most quickly and at the least cost. For years, it has been the predominant product and ‘cash cow’ of the dairy processing industry – and it is being left behind in promotion and other aspects of cost of bringing milk to market.
Some have predicted that there may be a recession in 2020 at some point, and if that does happen, are we prepared to see dairy product prices decline by 20-40%?
If comsumer pocketbooks are stretched by a recession, which category of milk sales will decline the fastest? Will it be those higher priced milks, or even the fake milks / alternative beverages? Or would such an event drive consumers back to basic milks, which are nutritional powerhouses in their own right?
There are many thoughts and opinions on how to best move more or recapture fluid milk, and there are many thoughts on which of the many attributes of whole milk are the best and should be promoted the most. (That is another discussion for another post, or yet another convention to attend!)
But for now the question is: How often do we really consider the opinion of those who are actually doing the ‘physical work’ on getting milk to consumers? If the “Learn by Doing” motto of 4-H is true, then there is much wisdom in all of the clerks who have ever placed milk on a shelf! And I’m betting they’ve spoken with many consumers along the way, too.
I, like many have more questions than answers, and there are others who will say that other means of milk movement have their own merits.
I’m not suggesting companies which use the cardboard cartons change their way of doing things – that obviously works for them, and any company which sells fluid milk is a benefit to dairy farmers everywhere! One of those in particular, another which serves a lot of southeast dairy farms, is about an hour from my location.
But I will say that a simple question asked of a pleasant young man sure gave me a new perspective. I learned a lesson, and the conversation made me think about things a bit differently. I hope it’s made you think, too.
And ‘thinking differently’ – on all levels of people along the supply chain – is the first step to a brighter milk tomorrow. The dairy industry is desperately searching for that brighter tomorrow.
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:
Here is the related News Release as posted at http://www.deanfoodsrestructuring.com:
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:
From ‘Seeking Alpha’: Dean Foods EPS misses by $0.72 – posted at $9.38 am
More information will be posted as it becomes available.
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 firstname.lastname@example.org
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:
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.
May 7th, Afternoon: From the Dallas News: “Dean Foods posts Wider Losses Than Expected in first quarter amid Conversations with Potential Buyers.”
May 7th, Afternoon: Dean Foods (DF) Reports Q1 Loss, Misses Revenue Estimates from Zacks Equity Research, a financial publication.
“Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Food-Dairy Products is currently in the bottom 8% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.”
H H Barlow III, a life-long dairy farmer from Barren County, has been selected to lead the Kentucky Dairy Development Council (KDDC) as the new Executive Director as of May 1. He follows Maury Cox, who retired at the end of February after holding the position for the past 10 years.
H and his wife, Kathy own and operate Barlu Dairy in Cave City and are currently milk 120 Jerseys. They have four adult children – Gini Lin, Brad, JP and Josh. They also have 14 grandchildren. They are members of the Immanuel Baptist Church in Glasgow.
Mr. Barlow graduated from the University of Kentucky and has worked for 34 years in feeds sales in addition to his dairy farm. He is a past board member for the KY Agricultural Development Board; he served on the KY Agricultural Council; he was chosen to serve on the U.S. Board for International Food & Agricultural Development; he was the chair of the founding committee for the KDDC and served on the KDDC board six years; he served on the Lone Star Milk Cooperative board of directors for 11 years; and he served on the ADA of KY/SUDIA board for 11 years.
When asked why he wanted to become the KDDC Executive Director, H stated that he is very passionate about the dairy industry, always has been. He plans to work with the four KDDC dairy consultants to help improve the profitability and sustainability of Kentucky’s dairy farm families. He fully understands the challenges that dairy farmers are facing but is very hopeful for future improved conditions within the industry. He plans to working closely with Kentucky’s dairy farmers, Governor’s Office of Ag Policy, KY Dept of Agriculture and all allied industry relating to dairy. He feels that teamwork and networking will be a key part of the job as he moves forward in this new position and is looking forward to working with all of Kentucky’s dairy industry.
Congratulations H H Barlow, III!
Maury Cox was honored at the KY Dairy Partners to recognize his service as Executive Director of the Kentucky Dairy Development Council. He was presented with a signatory crock, and was delighted to receive a new fishing pole, presented by Tom Hastings. In case you didn’t know, Maury is almost as passionate about fishing as he is dairy cows and dairy people!
“As long as supply outpaces demand, over-order premiums in most markets will be non-existent. Premiums are where the profit is. Until dairy farmers come together and decide they want something different, fewer and fewer will continue in business.”
Maury reminisces with some folks he’s worked with through the years: Bob Klingenfus, a former President of KDDC, Warren Beeler, Executive Director of Governor’s Office of Agriculture Policy, KY Dept.of Agriculture, and Eunice Schlappi, Office of Ag Marketing, KY Dept. of Agriculture.
Bob continues: “Maury has been a help to countless dairy farmers. On the surface we see Maury helping with Milk quality problems, division of water issues. But what he is really good at is what he calls facilitating. He is a good listener and when you are done venting, he will give a few suggestions and the names of people that can help you with your problem. He is careful not to tell you what to do, but facilitates you with the ability to achieve what you are seeking. Maury has become the go-to man if you need something; he seems to know everyone. If you need a barn, Maury knows who has built one recently, or sell or buy cows same thing, he put people together to solve problems.
“It has been an honor and privilege to serve you. I am a lucky and blessed guy,” were Maury’s closing words on the evening of the KY Dairy Partners banquet.