Borden Dairy Co has filed bankruptcy, blaming the 'rising cost of raw milk and market challenges facing the dairy industry', as American refrigerators are increasingly being stocked with milk substitutes amid a surge in veganism.
The amount of liquid milk consumed per capita in the US has tumbled more than 40 percent since 1975. Americans drank around 24 gallons a year in 1996, according to government data but that dropped to 17 gallons in 2018.
Borden recorded net sales of $1.2billion and a net loss of $14.6million in 2018 and last year a net loss of $42.4million, according to a court filing.
The Texas-based company noted the decrease in milk consumption has sent 2,730 US dairy farms out of business in the last 18 months alone.
Borden Dairy Co announced it had filed for bankruptcy on Monday, due to 'market challenges facing the dairy industry' as veganism rises and customers seek lactose-free alternatives
The heritage brand produces nearly 500 million gallons of milk each year for groceries, schools and others but the alternative dairy market has surged recently, and was worth $7.37billion in 2016.
About 65 percent of people cannot drink cow's milk without getting an upset stomach due to lactose intolerance and many more have dietary restrictions that keep them from the drink.
With the rise of veganism, the grocery store sections for 'mylks' are ever-expanding which has hammered traditional milk producers like Borden - founded in 1857.
The Global Market Insights reported the plant milk market was worth over $8billion in 2016 and predicted it would be worth $21billion by 2024.
In America the number of vegans grew from once percent to six percent from 2014 to 2017, according to GlobalData. Plant-based alternatives to animal products, including milk, rose 17 percent in a year from the end of 2017 to 2018, Neilsen reported.
Borden, a 163-year-old American dairy company which employs 3,300 people and runs 12 plants across the US, said Monday that the 'market challenges facing the dairy industry' have 'contributed to making our current level of debt unsustainable'.
The heritage American brand has been in business since 1857 and employs 3,300 people. Borden recorded net sales of $1.2billion and a net loss of $14.6million in 2018 and last year a net loss of $42.4million, according to a court filing
Remaining dairy farms can command higher prices, but that pinches Borden, which can't charge consumers more because of pressure from big competitors like Walmart. Walmart opened its own milk processing plant in Indiana in 2018.
In 2019, Borden introduced Gingerbread Eggnog, reintroduced the brand in Ohio and launched State Fair-inspired milk flavors.
The company recently revived its beloved spokescow Elsie, and launched a higher protein and calcium level children's milk named Kid Builder - designed to compete with trendy Coca-Cola Co milk brand Fairlife.