History & Origin . . . . . . . . . . . . . . . . . . . 3
Early Evolution . . . . . . . . . . . . . . . . . . . . 4
Modern Business . . . . . . . . . . . . . . . . 10
Global Expansion . . . . . . . . . . . . . . . .11
Recent Efforts . . . . . . . . . . . . . . . . . . . 12
Company DNA . . . . . . . . . . . . . . . . . . 14
Summary . . . . . . . . . . . . . . . . . . . . . . . 15
Social Media Accounts . . . . . . . . . . . 16
2
In 1925, Samuel E. Dean Sr. founded Dean Foods after having
worked at a brokerage company trading evaporated milk in
Chicago
By 1930, Dean moved into fresh milk processing
He became one of the thousands of localized American milk
bottlers in the period up to the Second World War
Realized that there were three ways to improve his position:
By building brands of milk that would increase his leverage
against retailers
By developing alternatives to dairy that would decrease his
reliance on cooperatives
By increasing the scale of his business that would enable
investment in greater efficiency and by lowering costs, winning
more business and increasing profits.
3
As early as 1943, Sam had his own R&D lab The first tangible output was a non-dairy powdered coffee creamer By 1947, he got himself into the ice cream business Sam was faced with the problem of milk being a local industry due
to limited shelf-life, transportation costs and product quality
reasons. He went on an acquisition spree to make way to a nationwide milk
business The acquisitions also brought capabilities into Dean Foods that
helped it diversify and build brands Reiter Dairy in Ohio came with cottage cheese-making facilities Ryan Milk in Kentucky had aseptic production facilities that
enabled life production of long life UHT products. Ice cream unit boomed, supplying over 400 Baskin-Robbins
stores In 1986, Dean diversified into frozen and canned vegetables It merged with the Larsen Company, third largest in America
behind Green Giant and Del Monte.
4
Ted Beshears, Chairman of the Milk Industry Foundation and a
former manager of milk plants for South-land Corporation and
entrepreneur, Glenn L. Engles. Beshears and Engles joined forces in
1988 in the packaged ice business.
In 1993, they switched their attention to the milk market, buying a
Puerto Rican dairy, Suiza Dairy.
Dean Foods, with their past emphasis on buying strong local milk
brands, had a 50/50 split in their sales between branded and
private label
But they faced the same pressures
There was over-capacity within the dairy producing industry
This reduced the leverage of even the big companies such as
Dean and Borden, as less efficient independent operators
would undercut on price just to stay in business.
5
In 1995, Suiza had sales of over $1 billion, and they needed all the
capital they could get in 1997, making eight acquisitions in the year.
Their crowning glory was a $960 million acquisition of Morningstar
Group Inc., a move that took Suiza ahead of Dean Foods
It also brought Suiza to be nationally recognized dairy and dairy-
substitute brands into their portfolio.
By 1999, Suiza had made forty acquisitions.
They achieved an annual sales of nearly $4.5 billion; doubled their
share price in four years and investing a nearly $200 million a year
into upgrading facilities and equipment.
In 2000, Suiza upped the pace again, buying Southern Foods Group,
the country’s third-largest milk processor
Suiza was now clearly the number one dairy processor and
distributor in the country. Suiza now had the capability to sell and
deliver every product in the dairy chiller cabinet to any customer in
the United States6
The phenomenal success of Suiza Foods was recognized:
Forbes 2000 Platinum List of the finest companies in America
Fortune magazine’s 2000 list of America’s Most Admired
Companies
By May 2001, Suiza signed up another major national brand into its
licensed brand program with a deal to launch, manufacture and
market P&G’s Folger’s Jakada, a low fat chilled coffee drink
Simultaneously, Dean Foods had continued its own acquisition
strategy at a more sedate pace and concentrated upon the
vegetables side of their business
Innovation continued on the dairy side when Mayfield Dairy Farms,
their Tennessee division.
With national scale and scope, Suiza was now an attractive option
for other companies to license their brands.
7
They developed a single-serve milk plastic bottle:
Ideal for sale in school-vending machines
An innovation that was quickly propagated across their other
regional companies
Under the name of Milk Chugs
2001 ended with Suiza’s biggest deal to date: the acquisition of
Dean Foods itself, for $1.5 billion.
This gave the company, which adopted the better-known name
of Dean Foods, over 30% of the US liquid milk market.
Two-thirds of the combined Suiza/Dean product range was
branded and one third of the range was private label
The merged company resolved its arrangement with Dairy
Farmers of America by handing over $165 million and six plants
where Dean and Suiza had overlapped
8
The combined ice cream operation were the third-largest in the
country; with annual sales revenues of nearly $1 billion
Suiza’s Morningstar Foods was also combined with the non-dairy
components of Dean Foods
Included their highly successful range of Marie’s and Dean’s
refrigerated dips
By May 2002 the purchase of White Wave, makers of the leading
brand in the soy beverage and food sectors. Silk was made.
Further good news on Silk came in the summer when it was
listed nationwide by Starbucks as their sole soy beverage
Also during 2002, licensing rights across all dairy products for
another strong brand, Land O’Lakes, was acquired.
The biggest purchase was the country’s leading brand of organic
dairy foods, Horizon Organic, in January 2004
9
Dean took costs out by removing supply overlaps, infusing capital
to improve processing efficiencies
They also had superior marketing, management and R&D expertise
that each acquired company could utilize
They initially solely focused on building their milk and dairy product
brands by mostly acquiring or merging with both dairy producers
and top brands in the country as well as abroad
Eventually they diversified by creating a separate division for their
vegetables products.
They also developed a Direct Store Delivery (DSD) network for their
milk operations, offering retailers a fresher product and allowing
their own drivers/salesmen to replenish and merchandise the dairy
fixture.
10
The European Markets:
Acquired 75% of Leche Celta, 4th largest brand in Spain and 2nd
largest milk brand in Portugal (2000)
Acquired Tiger Foods ( May 2004)
Acquired Horizon Organic which also included Rachel’s Organic,
a premium UK organic dairy company which held the number
one position in organic milk and number two in organic
yoghurt.
o Combined with Leche Celta to form a new international
division
Acquired Alpro, which was the leading European branded
company for soy and plant-based dairy equivalents: it had
production facilities in Belgium, Netherlands, France and UK
11
2004
Dean Foods acquired Horizon Organic Holding Corporation, maker
of a full line of organic milk and dairy products.
Dean Foods consolidated Silk, Horizon Organic® and other branded
businesses such as WhiteWave Foods Company
2005
Dean Foods spun off Dean Specialty Foods Group, which included
pickles, dips, dressings and foodservice products as TreeHouse
Foods
2006
Standard & Poor's announced that Dean Foods will be added to the
S&P 500 Index
2007
Dean Foods profits dropped due to the global financial crisis, due to
increase of raw materials and price wars for it. 12
2008
Dean Foods issued first corporate responsibility report
2009
Dean Foods acquired Alpro, a European leader in soy-based
products
2012
The WhiteWave Foods Company (NYSE:WWAV), a wholly owned
subsidiary of Dean Foods Company, completed initial public
offering
2013
Dean Foods sold the Morningstar Foods division to Saputo Inc.
(TSX: SAP).
Dean Foods completed the spin-off of The WhiteWave Foods
Company (NYSE:WWAV) and divests the remaining shares.
13
Milk producers attempt to manage the imbalances due to
consumer’s demand to their own advantage: converting surplus
milk to butter, powder and cheese.
Dean Foods were able to increase their sales of these items, divert
more milk into those products.
They thus drive up the price of bulk liquid milk to would-be
bottlers. It takes smart strategy to succeed in this world.
Gaining an annual sales of over $13 billion, more than Heinz and
equal to Kellogg’s, they must be the least well known of the
world’s big packaged goods companies
This anonymity was due to two factors:
Very little of what they sell is branded Dean’s
A dominant force in the cut-throat but near-anonymous world
of America’s dairy chiller cabinets
14
Dean Foods became a giant via an exceptionally well-executed
acquisition strategy that gave a critical mass to develop an
advantaged route to market and low cost base for milk.
The scale of their milk business, together with the strong customer
links inherent in a private-label-dominated category, was then
leveraged to expand into better branded sections of the chiller
cabinet.
Their various skill-sets: acquisitions, customer relations and brand
building, are now required in order to thrive in today’s retail
environment.
Dean Foods had shown the benefits of taking the initiative to
create their own future. The proceeds from the IPO and the sale of
Morningstar Foods are going to pay down debt. This substantially
strengthens Dean Foods’ balance sheet and gives a greater
flexibility to make big moves in building Dean and WhiteWave 15
LinkedIn: www.linkedin.com/company/dean-foods
Facebook: www.facebook.com/DeanFoods
Twitter: www.twitter.com/deanfoods
16