Major Dairy Producer Borden Files For Bankruptcy
The filing comes after two years of financial turbulence. The company cites a shift in customer preferences as a major reason for the financial distress now faced by the dairy giant. Fluid milk consumption has been steadily decreasing since 1975. The 40% drop in fluid milk consumption is also coupled with increased consumption of dairy alternatives. These dairy alternatives include oat milk, almond milk and soy milk.
With decreased demand has come an increase in the cost of production for dairy. More specifically, the cost of milk has increased 27% since January of 2019. This is attributed to the shortage of truck drivers and due to an increase in cost for the resin used in Borden’s bottles.
“The biggest cause, if you dial it back, is a circumstance where we have debt that is inappropriately sized for the company,” Tony Sarsam, Borden’s chief executive said.
Borden employs 3,300 people and reported $1.18 billion in sales in 2018. Dean Foods, a major competitor for Borden recently confirmed that it is also trying to find bankruptcy protections.