Borden Dairy Company filed for bankruptcy. Borden said it had debts of $500 million and assets of only $100 million. It employs over 3,000 people. This doesn’t mean the company will completely go out of business, and the statement said the company will continue operations as it works out a way to get its finances straightened out.
Interestingly, Borden was listed as one of Forbes 2019 “Most Reputable Companies” back in May, where it was listed as number 16. Obviously Forbes didn’t look at the company’s actual finances when making up that list.
When companies like Borden and Dean Foods goes under, the pundits and the companies themselves are quick to point the finger of blame at anything and everything. The articles I’ve read about the Borden’s bankruptcy and the earlier Dean Food bankruptcy blame the decline in the consumption of milk, the increasing popularity of plant based “milk”, changes in diet, dietary fads, major retailers like Walmart building their own milk processing facilities, etc. They blame it on everything except the real reason, the company itself. Or, rather the management of the company. The company itself was unable to adapt to changing market conditions, and that is what drove them into financial failure.
Yes, consumption of liquid (drinking) milk has been declining. But this is a trend that has been going on for decades. They can’t claim that they were blindsided by this. Walmart made no secret of the fact that it wanted to build its own milk processing facilities. That was known for years before they actually did it. The growing interest in vegetarian and vegan diets that reduce or even eliminate the consumption of dairy products isn’t new either. This is a trend that has also been going on for years now. The same is true for the increased interest in grain and nut based “milk” products.
That Bordens and Dean couldn’t make it is due entirely to the failure of their own management teams being unable to adapt to changing markets.
I’m sitting here in eastern Wisconsin, just 20 miles or so south of Green Bay, and I’m surrounded by dairy companies that are doing pretty darn good. Over the last few years I’ve seen at least a half dozen major expansions by large processing companies, mostly cheese makers, including some multinational corporations. And they’re all doing pretty well. Why? Because they’ve been able to adapt to a changing market.
Dean and Borden failed because they didn’t adapt to an ever changing marketplace.
4 thoughts on “Borden Dairy Files Bankruptcy”
It’s amazing how long people will keep doing what worked in the past even when all the signals tell them it’s not working anymore. I’m rather afraid of this with the business I work for. We do transportation. The market is changing fast. They lament but don’t appear to innovate.
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That’s very true. Some people just can’t understand that things change and want to hang on to what worked in the past. A lot of businesses end up going under because they can’t accept that they need to change their business model in order to survive.
The whole transportation business is about to change drastically. If they ever get all of the bugs out of self driving vehicles, and I’m sure they will, it will change everything, from how we get around town to how deliveries are made to long haul trucking. I suspect that the whole concept of actually owning your own car could simply vanish. Why own one when all you need to do is hit a button on your cell phone and a self driving car from some central warehouse turns up at your door a few minutes later?
Exactly. I think they should get a Tesla just to get a foot into that water.
That would probably be a good idea. If nothing else it would be a promotional item for a transportation company. Could point out how they’re switching to electric for environmental reasons. Plus Tesla vehicles are generally not all that expensive any more and are apparently extremely reliable from what I’ve been hearing. And with the safety features like auto braking, lane change warnings, automatic distance maintain from vehicles in front, etc. some insurance companies have better rates for Tesla vehicles. Operating costs on a per mile basis are comparable to gasoline fueled vehicles, or close to it.