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Traditional US milk processor acquires non-traditional

Dean Foods Company announces it has increased its ownership percentage and taken a majority stake in Good Karma Foods, the leading brand of flaxseed-based milk and yogurt alternatives.

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 with its headquarter in Dallas, Texas.

“Good Karma is a fast-growing brand that gets us back into the growing plant-based food and beverage category, making it an excellent addition to our portfolio,” said Ralph Scozzafava, CEO of Dean Foods.

Dark Clouds Loom Over Dean Foods

The company, which has been bearing the brunt of high raw milk prices , marked its third straight earnings miss, in second-quarter 2017. This also compelled management to cut its bottom-line view for the full year.

While management announced plans to expand its cost productivity program with the quarterly results, its lowered earnings view for 2017 hints at a bumpy road ahead.

Evidently, the USDA data through May 2017 revealed that fluid milk volumes dipped 2.9% year over year, on a quarter-to-date basis. Likewise, Dean Foods’ share of U.S. fluid milk volumes contracted 30 basis points in the quarter under review. While volumes hampered sales, earnings were hurt by a rise in raw milk costs that escalated 15% year over year.

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