DALLAS — Dean Foods expects Wal-Mart’s new milk processing plant will not have a significant impact on the company. The move may mean a loss of approximately 100 million gallons of private label milk volume beginning in 2017, according to the company.
In a filing with the Securities and Exchange Commission, Dean Foods said, “We do not believe that Wal-Mart’s announcement will impact our sales to the potentially affected stores of our national brands, DairyPure and TruMoo, or sales of our other non-fluid milk products.
“We’ve been talking for the last several quarters about our increased focus on building and buying brands. We have been actively working to change the mix of our business to increase the focus on branded products, and will continue with those efforts. We are very confident in the strength of our brands and their ability to compete on a national scale.”
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| Gregg Tanner, c.e.o. of Dean Foods |
Gregg Tanner, chief executive officer, added, “It’s disappointing to learn of any potential loss of business, but we remain confident in our future and the strategic plan we recently put in place. We understand the fresh dairy space better than anyone and have proven that we can manage change and will navigate this development with the same determination as we have in the past. With more than a year advance notice and the low-margin nature of the potential lost private label milk volume, we expect to govern our business such that this will result in very little impact to our financials.”
Wal-Mart announced earlier this week it plans to build a milk processing plant in Fort Wayne, Ind. Construction is expected to begin this summer and the plant is scheduled to be operational by the summer of 2017.
