Dean Foods Company

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This article is part of the Center for Media & Democracy's spotlight on global corporations.

Dean Foods Company is the leading producer of fluid milk and dairy products in the United States and the second largest dairy company in the world. The company has grown and continues to grow through acquisitions. Its products are sold under more than 50 regional, private and national brands. These include Borden, Pet, Country Fresh and Meadow Gold. Dean Foods also manufactures coffee creamers, dips, yogurt, ice cream, lactose-free milk, organic milk, soy milk and flavored milks. Dean Foods owns and operates Horizon Organic, Rachel's Organic and WhiteWave Foods.

In the fiscal year ending in December of 2008, the company reported sales of approximately 12.455 billion dollars and had 25,820 employees.[1]

Overview & history

Dean Foods is headquartered in Dallas, Texas. The company has 120 production plants in the U.S., United Kingdom, Spain and Portugal and produces approximately 2 billion gallons of milk per year. Dean is second only to Nestle in terms of global dairy sales, at over 7 billion dollars in 2003. The company currently controls approximately 35% of the U.S. milk market and 70% of the U.S. organic milk market. Brand names include Hershey’s chocolate milk, Land O’ Lakes, Dairy Ease lactose free milk and Folgers ready-to-drink lattes. Three dozen other milk labels include the brands Meadow Gold, Garelick and Oak Farms.

History of acquisitions

  • 1925 Samuel E. Dean gets his start with evaporated milk, buying Pecatonica Marketing in IL.
  • 1927 Company changes name to Deans and buys more dairy plants in IL.
  • 1951 Deans opens its corporate headquarters in Franklin Park, IL 1961
  • 1961 Deans issues its first common stock to 1800 shareholders.
  • 1962 Deans expands beyond dairy through purchase of Green Bay Foods, a major pickle maker.
  • 1981 Deans is listed for the first time on the New York Stock Exchange.
  • 2001 Suiza buys out Dean. The "new" Dean Foods moves its headquarters to Dallas, Texas.
  • 2002 Dean buys out Boulder, Colorad based White Wave, the maker of Silk soy milk, for $189 million.
  • 2003 Dean takes over operations of Morningstar Foods.
  • 2004 Dean buys out Horizon, a major U.S. organic supplier for $216 million.

Narrowly avoided anti-trust action

Dean Foods has been dubbed the Microsoft of the dairy industry due to its aggressive expansion and competitor buy outs. The unprecedented merger with Suiza in 2001 was made possible by Dairy Farmers of America (DFA), which had already sold off its Southern Foods Group fluid milk outfit to Suiza in 2000. In exchange, DFA acquired a third stake in Dean’s fluid milk business and was able to place DFA representatives on Dean’s board. Dean Foods also dumped its own dairy farmer producer pool into a separate joint venture controlled by DFA Dairy Marketing Services (DMS). Dean continues to strengthen its grip on the U.S. dairy market through exclusive supply contracts and interlocking management.

Federal anti-trust action was narrowly avoided (some say cleverly negotiated) when Dean agreed to spin off 11 plants in 8 states to a nominal "competitor", National Dairy Holdings (NDH). However, by allowing the merger, the U.S. Department of Justice significantly lowered the bar on “allowable concentration.” Deans’ overwhelming dominance has now become the federal benchmark throughout the U.S. food industry. Dean has a dairy monopoly in many parts of the U.S.; 80% in Massachusetts, Northern Alabama, Tennessee and Michigan and over 66% in Texas. If the company is allowed to absorb what is left of the crumbling Italian based Parmalat dairy empire on the East Coast, it would also control 85 to 90% of the lucrative New York City milk market. In preparation for this scenario, Dean hired outgoing Parmalat executive, Frank Ferrante in December of 2003.[2]

Animal welfare issues

PETA investigation of PA Land O' Lakes supplier. - 2009

Land O'Lakes supplier charged with cruelty

In September of 2009, People for the Ethical Treatment of Animals (PETA) revealed footage from a five-month undercover investigation of a Pennsylvania dairy CAFO (Confined Animal Feeding Operation) that supplies milk to Dean Foods label, Land O' Lakes. Land O' Lakes is the largest seller of branded butter in the U.S. The footage documented abuse and neglect of cows and calves at the facility. Cows in pain and unable to stand were electro-shocked and stabbed with a pocket knife. Sick and injured cows were left to languish in their own waste for days and even weeks, without veterinary care. In one case, workers were told to wrap an elastic band around a cow's gangrenous, infected teat to "amputate" it. The cow deteriorated for 11 days before she died. [3]

See also Land O’ Lakes.

Horizon's 'organic' factory farms

Horizon began as a yogert maker in 1992, buying organic milk from the Wisconsin based CROPP Cooperative (Organic Valley). In 1994 the company established its own milk supply and eclipsed Organic Valley with a line of 130 organic products from dairy to juice, reaping annual sales of $185 million in 2002. Horizon was bought out by Dean Foods in 2004 for $216 million. Horizon now sources milk from its own corporate farm, as well as over 200 independent dairy farms.[4]

On January 10, 2005, the Cornucopia Institute filed a complaint with the U.S. Department of Agriculture (USDA) against a 5,700 head Horizon "organic" dairy operation in Colorado, alleging factory farm style conditions. On Feb. 17, 2005 Cornucopia filed two similar USDA complaints against a 4,000 head farm in Idaho and a 10,000 head farm in California. According to Mark Kastel, Senior Farm Policy Analyst, at the Cornucopia Institute. :

"It is our contention that you cannot milk 2000–6000 cows and offer them true access to pasture as required by the Organic Foods Production Act of 1990, the law that governs all domestic organic farming and food processing. Both the Idaho and California operations differ little from conventional confinement dairies other than having their high-producing cows fed certified organic feed. Real organic farms have made great financial investments in converting to pasture-based production – enhancing the nutritional properties of the milk and for enhancing animal health – while it appears that these large corporate-dominated enterprises are happy just to pay lip service to required organic ethics."

Federal organic standards have nothing to say about labor practices. Like factory farms, conditions for employees on some of these corporate mega-dairies were substandard and abusive. The owner of the California farm, Vander Eyk, recently settled out of court for $360,000 after his low paid, non-union employees charged that they were denied rest, meal breaks and overtime pay. They were also forced to purchase their own safety equipment and were not reimbursed. Organic principles of long-term sustainability and animal welfare are also being violated on these large scale organic operations. Up to 40% of the cows are culled annually. As the cows on Vander Eyk's California farm don't have direct access to pasture, they are "trucked" to fresh grass periodically to meet organic requirements. [5]

According to a May 13, 2001 New York Times article by Michael Pollan:

“On Horizon's dairy farms in the west, thousands of cows that never encounter a blade of grass spend their days confined to a fenced dry lot, eating (certified organic) grain and tethered to milking machines three times a day."[6]

Ad boycott against Air America Radio

Dean's Morningstar Food's refused to advertise on the progressive Air America Radio. In October 2006, around 90 companies, including Dean Foods, told ABC Radio Networks that they did not want their ads to play on any radio station that carried Air America Radio. [7], [8], [9]

Political contributions

Dean Foods gave $572,384 to federal candidates in the 2008 through its political action committee (PAC) - 43% to Democrats, 57% to Republicans. [10]

Public relations & lobbying

The company spent $800,000 for lobbying in 2009. Of this total, $390,000 went to outside the lobbying firms Glover Park Group and Michael Torrey Associates. The remainder was spent on in-house lobbyists. [11]

Center for Consumer Freedom

Dean Foods has donated to the front group Center for Consumer Freedom (CCF). CCF runs attack campaigns against health, food safety, animal rights and animal welfare advocates.

Shareholders listing

Dean Foods shareholders included the following companies in March of 2005:

Personnel & board

Key executives & compensation

  • Gregg L. Engles - CEO - $ 3.70 M
  • Joseph E. Scalzo - COO - $ 1.15 M
  • John (Jack) F. Callahan, Jr. - CFO - $ 1.27 M
  • Ronald L. McCrummen - Chief Accounting Officer
  • Steven J. Kemps - General Counsel
  • Gregg A. Tanner - Executive VP - $ 1.71 M
  • Gregory A. McKelvey - Executive VP
  • Paul T. Moskowitz - Executive VP, Divisional
  • Michelle P. Goolsby - $ 1.02 M
  • Jim L. Turner - Director
  • John R. Muse - Director
  • Joseph S. Hardin, Jr. - Director
  • Lewis M. Collens - —
  • Tom C. Davis - Director
  • Janet Hill - Director
  • Hector M. Nevares-La Costa - Director
  • Stephen L. Green - Director
  • Richard Fehr - Senior VP, Divisional
  • Harrald F. Kroeker - President, Divisional - $ 792,596.00
  • Deborah B. Carosella - Senior VP, Divisional
  • Kelly Duffin-Maxwell - Executive VP, Divisional [13]

Selected board members

  • Pete Schenkel - Vice Chairman
  • Alan J. Bernon - Former President of the Garelick Companies
  • Lewis M. Collen - President of Illinois Institute of Technology [14]

Contact

2515 McKinney Avenue
Suite 1200
Dallas, TX 75201
U.S.A.

Phone: (214) 303-3400

Fax: (214) 303-3499

Website: http://www.deanfoods.com/

Articles & sources

SourceWatch articles

References

External articles