Dairy Giant Hikes Prices to Survive Plant-Based Takeover

Country's largest dairy company Dean Foods hikes prices to stay profitable amongst growth of plant-based alternative market.

On October 1, Dean Foods Company—the largest dairy brand in the United States—raised the price of its Dairy Pure brand milk by 16 cents per gallon and 13 cents per half gallon. According to a letter sent to its distributors obtained by Bloomberg News, the company’s price hike is attributed to consumer interest in plant-based dairy alternatives. “In order to continue the strong momentum and revitalization of the conventional white milk segment of the beverage category, we will be taking a pricing action,” Dean Foods’ Senior Vice President Kurt Lauer said in the September 22 letter. Bloomberg analyst Kenneth Sheah explained that the decision to raise prices was attributed to a rise in consumer preference for “healthy milk,” saying, “Consumer demand is also weak, perhaps damped a bit by greater competition from plant-based milk substitutes.” The plant-based dairy alternative market is estimated to grow to $35 billion by 2024 and is largely driven by increasing sales of almond milk. The United States Department of Agriculture released new data that indicated dairy farmers have purged over 43 million gallons of excess milk during the first eight months of 2016. Dean Foods’ price hike is an attempt to remain profitable in a climate that is inhospitable for animal-derived milk.

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