"Dean Foods has just declared war on the organic industry. Although the first shot has been fired it will not be the last," Kastel lamented. We hope they will reevaluate this ill-advised product launch."
In addition to reformulating the previously exclusive domestic organic brands Horizon and Silk, Dean Foods also "converted" the UK's leading organic dairy brand to conventional milk when introducing the product line to United States consumers. "In England the Rachel's organic brand is widely respected as a pioneer in the industry. When they launched Rachel's yogurt in the United States they did so exclusively utilizing conventional milk," stated Kastel.
Both Dean Foods CEO, Greg Engels, and the chief executive officer of their WhiteWave-Morningstar division, Joe Scalzo, had both referred to their company as a "consumer packaged goods" marketer. At one point Engels said that only 3% of their dairy sales were organic. Dean Foods controls 50 different dairy brands in the country, Horizon and Organic Cow are their two organic offerings. Scalzo, who had no dairy or organic industry background when he was hired to run WhiteWave, was previously a high-ranking executive with Gillette and Procter & Gamble.
"Many of Dean's competitors in this industry, including the second-largest organic marketer, Organic Valley, a farmer-owned cooperative, are exclusively organic," Kastel noted. "Like their farmers, they will live or die by the value and reputation the organic label holds with consumers. Dean Foods can afford this dangerous experiment. If it fails, they can just walk away. But how many competitors and lives of farmers might they destroy in the process?"
Due to the generous support of one of its prime funders, the Jesse Noyes Smith Foundation, The Cornucopia Institute is a shareholder of Dean Foods in good standing and has, over the years, engaged in shareholder activism, within the democratic process, at the investor-owned corporation.
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