Borden Dairy Co. a Texas-based dairy company founded in 1857, has blamed the ‘rising cost of raw milk and market challenges facing the dairy industry’ as the reason behind its filing for bankruptcy. The rise of veganism and the number of people allergic to milk are the two major challenges cited.
Borden said the struggle remained despite its growth last year outpacing the industry as it increased yearly sales.
The company employs 3,300 people across 12 plants in the US. It was the first company to develop a patent for the process of condensing milk, and also the first to use glass milk bottles.
But yesterday Borden’s CEO Tony Sarsam announced that its current level of debt was ‘unsustainable’. Not even the recent revival of the company’s hugely popular “spokescow” Elsie could affect the trend. With over 35 products Sarsam said that the company has ‘earned the distinction of being one of the most well-recognized and reputable national brands’.
Dairy alternatives have harmed the dairy industry
Borden had sales of $1.2 billion in 2018 recording a net loss of $14.6 million in 2018. Last year it’s net loss rose to $42.4 million according to the bankruptcy court filings which also specifically confirmed how much dairy alternatives such as soy, nut and rice milk have harmed the industry.
Americans now drink 40 per cent less milk than they did in 1975 and increasing numbers of Americans will not drink cow’s milk due to lactose intolerance which would cause an upset stomach or for dietary reasons.
Dean Foods, the USA’s largest milk producer, filed for bankruptcy protection last November. It now has access to $850 million of debtor-in-possession financing.
Borden noted that more than 2,700 family dairy farms went out of business in 2019, and that 94,000 have stopped producing milk since 1992. Against this backdrop, it is very hard indeed for dairy producers to keep going. Wisconsin, America’s “Dairyland” is facing a crisis.
Borden was once ranked by Forbes at no.16 on its list of America’s Most Reputable Companies. The vegan dairy-free trend has claimed another victim.