Berkeley Farms, the Hayward-based dairy brand and milk producer with roots that stretch back more than 100 years in the Bay Area, woke up to an uncertain future on Tuesday.
That’s because Dean Foods, the parent company of Berkeley Farms, said it has filed for Chapter 11 bankruptcy protection, and has entered talks with the Dairy Farmers of America (DFA) cooperative that could result in Dean Foods selling all of its assets to DFA.
Dean Foods, which is headquartered in Dallas, said early Tuesday that the Chapter 11 proceedings would allow it “to protect and support its ongoing business operations and address debt and unfunded pension obligations while it works toward an orderly and efficient sale of the company.” The company added that while it goes through Chapter 11, all of its subsidiaries — including Berkeley Farms — would remain “operating in the ordinary course of business.”
The bankruptcy filing comes as Americans are drinking less milk from cows, and have expanded their tastes for milk-alternatives like soy and almond milk, and other dairy substitutes. According to the Dairy Farmers of America, dairy product sales dropped to $13.6 billion in 2018, from $14.7 billion in 2017.
In a statement announcing its bankruptcy filing, Dean Foods said its business continues to be affected by “a challenging operating environment marked by continuing declines in consumer milk consumption.”
Berkeley Farms representatives chose not to comment on the bankruptcy matter. Anne Divjak, vice president of government relations and external communications at Dean Foods, told this news organization that, “Berkeley Farms is operating as normal,” and that “any future decisions regarding our plants will be based, as always, on market conditions and the needs of the business.”
Located in Hayward, Berkeley Farms was founded in 1910 by John Sabatte, who originally established the business in Berkeley as the South Berkeley Creamery. For decades, the company had one of the most-identifiable ad campaigns in the Bay Area, with the tagline, “Farms in Berkeley?” that was accompanied by a cow replying, “Moooo!”
Sabatte and his family members continued to run Berkeley Farms until it was sold to Dean Foods in 1998. That same year, Berkeley Farms relocated its operations to facilities in Hayward. The company continues to process and sell milk that it obtains from farmers in Northern California, and from its own ranch in the San Joaquin Valley.
Berkeley Farms didn’t disclose any information about how many people it employs in Hayward. Berkeley Farms reportedly produces 135,000 gallons of milk a day.
Dean Foods said that as part of its bankruptcy filing and sale talks it has obtained $850 million in financing from its existing lenders to keep the company running.
In addition to Berkeley Farms, the company owns several other national and regional dairy-product brands including Land O’ Lakes, Organic Valley, Dairy Pure, TruMoo and Meadow Gold.