(CN) – One of America’s oldest and most recognized dairy producers, Borden Dairy, announced it is filing for bankruptcy, making it the second dairy dynasty to do so in as many months as consumption of milk continues to decline.
Borden’s announcement on Sunday comes after the country’s leading milk producer, Dean Foods, filed for Chapter 11 bankruptcy in November and announced plans to sell the company. Both dairies are based out of Dallas, Texas.
However, Borden Dairy CEO Tony Sarsam told employees, stakeholders and customers to expect business as usual at the 163-year-old company.
He pointed to the rising cost of raw milk, the dwindling number of dairy drinkers in the U.S. and the popularity of almond and soy substitutes as hurdles that have contributed to an unsustainable debt, which will be strategically handled and reorganized during the court-supervised process.
“This reorganization will strengthen our position for future prosperity,” Sarsam said in a statement. “We remain committed to the ‘Borden Difference’, which is our promise to be the most service-oriented dairy company that puts people first.”
In order to achieve long-term success, he said Borden needs to reduce its current debt load, balance pension obligations and make strategic plans with lenders.
Sarsam also distanced the company’s situation from that of Dean Foods. Borden said it still has solid earnings and will work to achieve long-term prosperity.
“Borden Dairy is a heritage American brand that has been in business since 1857,” Sarsam said. “We have a very tenured workforce of 3,300 people who live and breathe our values of teamwork and creative problem solving, and I am extremely confident and optimistic about our continued success in the future.”
Milk consumption has dropped 6% in the U.S. since 2015 and 40% since 1975, according to U.S. Department of Agriculture data.
Borden currently supplies over 500 million gallons of milk to customers annually and has 12 milk processing plants in the U.S.
The company reported $1.2 billion in net sales in 2018, but saw a net loss of $42.4 million in 2019.
The consulting firm Euromonitor reported that Borden and Dean Foods accounted for roughly 13.5% of American milk sales last year.
Founded by Gail Borden, Jr., Borden’s most notable achievements include introducing the country to condensed milk, glass milk bottles and Elsie, the company’s iconic “spokescow” who debuted in 1936.
Sarsam said that while traditional milk sales have taken a hit, specialty dairy products such as flavored eggnog, cottage cheese and sour cream sales have been more lucrative.
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