The outbreak of COVID-19 is weighing on global market sentiment and the 2020 outlook.
The Dallas listed processor is blaming declining milk sales triggered by increased competition from dairy alternatives such as oat and almond milk.
The company says it plans to use Chapter 11 of the US Bankruptcy Code which allows a debtor to reorganise assets -- keeping the business alive and paying creditors over time.
The company will continue to process milk and supply dairy products to retailers. Customers are expected to receive their dairy products without any interruptions.
Dean Foods is the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the US. It has 50 national, regional and local dairy brands as well as private labels. It makes ice cream, cultured products, juices, teas and bottled water. It has 15,000 employees.
New chief executive Eric Beringause says the Chapter 11 bankruptcy protection will allow the company to “continue serving our customers and operating as normal as we work toward the sale of our business”.
He claimed the company had a strong operational footprint and distribution network, a robust range of leading national brands and extensive private label capabilities.
“Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption.
“Importantly, we are continuing to provide customers with an uninterrupted supply of high-quality dairy products, as well as supporting our dairy suppliers and other partners.”
Beringause, who joined Dean Foods three months ago, says he took a hard look at its challenges. He said that in recent months the company put in place a new senior management team with a track record of turning around businesses.