Dean Foods Company announced Tuesday it would enter into a joint venture with independent farmer cooperative CROPP, which markets the dairy brand Organic Valley. Per the deal, Dean will provide processing services and distribution and Organic Valley will provide a select portfolio of products, marketing and access to its organic milk supply. The partnership is expected to expand the brand’s presence in mainstream retail channels, including convenience, dollar and box stores.
Speaking with BevNET, Dean Foods spokesman Jamaison Schuler said the deal is the publicly traded company’s entry into organic milk products. On the dairy market, Dean is best recognized for its DairyPure and TruMoo brands.
According to Schuler, the partnership is part of a three-year strategic plan to grow Dean Foods, which includes expanding its brand portfolio.
“The organic space continues to hold a share of the dairy category, and it is a part of the category we were not currently competing in,” Schuler said. “We have experience in the organic space and are very excited at the prospects the new joint venture with the Organic Valley brand presents. Organic is not a trend but an ongoing consumer need, and we can provide more consumers with those desired products.”
CROPP spokesman Hans Eisenbeis said the partnership gives Organic Valley the chance to break deeper into the mainstream — something that the cooperative has already endeavored through memorable ad campaigns like last year’s “Save the Bros” push that spread the word about its Organic Fuel line. The brand’s bottled milk products are currently available throughout the United States in supermarkets including Whole Foods, Shaw’s and Star Market. By partnering with Dean, Organic Valley is primed for new placement in retailers such as Walmart and 7-Eleven.
“Organic has mainstreamed,” Eisenbeis said. “This partnership is about our commitment to grow the availability of organic all over the country.”
Eisenbeis and Schuler did not say which specific Organic Valley products Dean will begin producing and distributing, but Eisenbeis said it will likely focus on bottled white and chocolate milks, excluding ultra-pasteurized drinks.
CROPP has farmer members in 36 states. Working with Dean, Eisenbeis said, will help to limit the distance the milk travels from farm to shelf. Currently, Organic Valley has its own distribution center in Wisconsin and a production plant in Oregon set to open in 2017. The purchase of the plant, formerly a farmer’s co-op, was finalized last month.
Neither Dean Foods nor CROPP are currently disclosing the size of the contract or the projected financial impact of the partnership. Eisenbeis said the deal had been in talks for at least six months.
“This partnership reinforces Organic Valley’s mission to support more organic farmers and grow our business,” said George Siemon, CEO of Organic Valley, in a press release. “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.”
Eisenbeis said “the ball is just beginning to move” to put the plan into action and Dean expects to begin processing and shipping Organic Valley in mid-to-late 2017.