UPDATE: Dean Foods told Dairy Foods that "with a few minor exceptions, Dean Foods will be the exclusive processor for HTST milk for the joint venture." HTST, meaning high temperature short time, refers to a method of pasteurizing milk. HTST milk has a shorter shelf life than milk processed by extended shelf life measures, like ultra high temperature (UHT). A company spokesman also told Dairy Foods that Dean Foods was not processing Organic Valley milk prior today's announcement.
DALLAS, Nov. 15, 2016 /PRNewswire/ -- Dean Foods Company (NYSE: DF) and CROPP, an independent farmer cooperative, are partnering in a strategic joint venture to bring organic milk to retailers through Dean Foods' processing plants and refrigerated direct store delivery (DSD) distribution system.
The 50/50 joint venture will serve as a strategic growth platform for both companies. Dean Foods will provide processing services and distribution through its extensive refrigerated distribution network. Organic Valley will provide a select portfolio of recognized brands and products, marketing expertise, and access to an organic milk supply from America's largest cooperative of organic dairy farmers. Both Dean Foods and Organic Valley will leverage their sales expertise to drive distribution; Dean Foods brings extensive experience in channels such as large format, dollar store and C-store while Organic Valley brings expertise in the natural channel, emerging markets and specialty distributors.
"Adding Organic Valley® to the current lineup of Dean Foods branded dairy products enables Dean Foods to offer retail customers the largest and most comprehensive dairy offering across multiple segments with national brands that consumers know and trust. It also allows us to further leverage our manufacturing and distribution network," said Gregg Tanner, CEO of Dean Foods. "We believe the dynamic and growing Organic Valley brand of organic milk is the perfect complement to our own category-leading DairyPure® and TruMoo® brands and gives Dean Foods a strong position in the organic dairy segment."
"This partnership reinforces Organic Valley's mission to support more organic farmers and grow our business," said George Siemon, CEO of Organic Valley. "Consumers will enjoy the same Organic Valley quality they've come to know and trust: the same farmers will supply the same organic milk. But now more Organic Valley organic milk will be on more grocery shelves across the country."
The joint venture expects to begin processing and shipping Organic Valley products in mid-to-late 2017.