The challenges facing US dairy giant Dean Foods, highlighted last week when the company posted a drop in earnings, announced job cuts and scrapped its profit forecast, have lessons for those in the dairy sector the world over.
Dean Foods continues to face pressure from private label, with US retailers continuing to look to liquid milk to drive traffic and with rival suppliers competing keenly on price.
The company highlighted the trend back in February but, worryingly for investors, there are few signs that the pressure is easing. That promises a challenging period for the group's Fresh Dairy Direct-Morningstar division – which generates 84% of turnover, according to analysts at Sanford Bernstein.
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