T.G. Lee Dairy moves ahead
Official says it’s ‘business as usual’ as parent files for bankruptcy.
Dean Foods, parent company of T.G. Lee Dairy, declared Chapter 11 bankruptcy this week, which the company said shouldn’t immediately affect the Orlando milk factory.
Dallas-based Dean Foods said it is in talks with Dairy Farmers of America to sell the company and its subsidiaries. Its brands include TruMoo, Land O’Lakes, DairyPure, Friendly’s ice cream and T.G. Lee.
Anne Divjak, a spokeswoman for Dean Foods, said production will not be interrupted, and that “any future decisions regarding our plants will be based, as always, on market conditions and the need of the business.”
“It is business as usual for us,” Divjak said. “We are continuing to provide customers with an uninterrupted supply of high quality dairy products and are relying on our dedicated employees and valued milk suppliers to help us do this. Products from the Dean Foods family of brands, including
T.G. Lee, will continue to be available where consumers usually shop.”
The factory declined to comment.
The announcement comes a few months after Dean Foods named a new president, following declining sales and a dwindling number of milk drinkers.
“The actions we are announcing today are designed to enable us to continue serving our customers and operating as normal as we work toward the sale of our business,” Eric Beringause, president and chief executive officer of Dean Foods, said in a news release. “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.”
In its most recent earnings report, Dean Foods reported that as of June 30 the company had $968 million in debt and that losses had reached 36 cents per share. The stock has lost more than 80% of its value this year.
Mark Stephenson, director of dairy policy analysis at the University of Wisconsin, said milk consumption has taken a nosedive since 2010, in part because of dairy alternatives such as almond milk and soy milk, but also because of shifting consumer preferences.
Around 2008 during the financial crisis, milk experienced a temporary comeback, but now other dairy products, such as cheese, butter and yogurt, are the popular buys.
“Beverage milk has been a category that’s been in decline for quite a few years,” he said. “It’s pretty hard to be profitable. Consumers are just not buying as much as they did before.”
Thomas Gilbert Lee sold T.G. Lee to Dean Foods in the 1980s, shortly before his death in 1986.
Lee got into the milk business in 1925 with 20 acres, the family cow and a cosigned a banknote from his father. He and his wife milked the cows themselves in a shack on North Bumby Avenue, near the present-day Orlando factory.
He delivered bottles of milk door-to-door in his Model T Ford coupe.
The T.G. Lee factory has been a landmark of the Orlando community and the namesake of the Milk District where it resides. Painters just recently finished a 200-foot-wide mural on the side of the building of Holstein cows from a farm in Okeechobee.
It’s one of nine factories in Florida dedicated to milk production, Stephenson said.
Karyn Barber, a spokeswoman for the city of Orlando, said, “At this time we are not aware of a possible closure. However, should the company decide to close down the plant we are confident that the legacy of the Milk District will continue as that area grows.”