Borden Dairy, one of the oldest milk processors in the U.S., filed for bankruptcy on Monday, making it the second large milk seller in nearly two months to restructure amid rising raw milk costs and lackluster consumer demand.
- Borden Dairy said in a statement that it filed for Chapter 11 bankruptcy protection because its debt levels are unsustainable and the company has been impacted by the “rising cost of raw milk and market challenges facing the dairy industry.”
- Borden Dairy will remain in business through the bankruptcy proceedings.
- The Dallas-based company has 3,300 employees.
- Dean Foods, the largest milk processor in the U.S. declared bankruptcy in November over similar trends in the dairy industry.
Crucial quote: “Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” Borden CEO Tony Sarsam said in a statement. “These challenges have contributed to making our current level of debt unsustainable.”
News peg: The industry is struggling as Americans drink less milk. According to the U.S. Department of Agriculture, milk consumption among Americans decreased 18.4% from 2008 to 2018. While still a small part of a dairy market, sales of nut and plant-based milk, like soy and oat milk, have increased dramatically. According to the Plant Based Food Association, plant-based milk sales rose 9% in 2018 while cow’s milk sales sank 6%. Cereal, too, is becoming less popular as consumers opt for breakfast foods with less sugar. And on top of that, dairy farms, where Borden purchases raw milk, are having a difficult time surviving. In 2019 alone, 2,700 dairy farms have gone out of business, Borden noted in its filing.
Key background: Borden traces its founding to 1857, when it was the first company to develop a patent for the process of condensing milk and the first company to use glass milk bottles. The company’s mascot, Elsie the Cow, was named one of the top 10 advertising icons of the 20th century by AdAge in 2000.