Broughton Foods' corporate parent to file bankruptcy
The parent company of Broughton Foods in Marietta announced Tuesday that it will seek bankruptcy protection as it seeks to reorganize its finances.
Dallas-based Dean Foods, the nation's biggest milk processor, plans to keep the business operating normally while it deals with debt and unfunded pension obligations.
The company also said it is in "advanced discussions" with Dairy Farmers of America, a co-operative of thousands of farmers, about selling its assets.
Broughton's has been in business in Marietta since 1910, selling a wide
range of dairy products across the Mid-Ohio Valley. The company is also known for sponsoring a popular community ice-cream social held annually for many years.
WTAP reached out to Broughton Foods in Marietta for comment but has not received a response.
Dean Foods' bankruptcy announcement comes amid a steep, decades-long drop-off in U.S. milk consumption blamed on soda, juices and, more recently, nondairy substitutes.
"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," CEO Eric Berigause said in a statement.
Since 1975, the amount of milk consumed per capita in America has tumbled more than 40%, a slide attributed to a number of reasons but mostly the rise of so many other choices, including teas, sodas, juices and almond and soy milk.
That has hit dairy farms and milk sellers hard, leading some smaller family farmers to quit the business.
Another blow to Dean Foods came when Walmart opened its own milk processing plant in Indiana last year.
Dean Foods has lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.
The company said it will continue operating normally while it puts its finances in order under Chapter 11 bankruptcy. It has lined up about $850 million in financing from lenders.
Its stock rose 2.3% in morning trading.
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