Organic milk gets shelf space
We've written before about Dean Foods' growing oligopoly in the dairy industry. Not only has the company taken over some big national names (Land O'Lakes, Borden, Pet) and a large number of local dairies, but they've also made soy milk (Silk, White wave) available in almost every dairy case across the country.
Earlier, this year, Dean Foods took over Horizon Organics, a producer of organic dairy products. That company is the largest supplier of organic milk in the US, in addition to other dairy specialties like cottage cheese, yogurt, butter, and cheese, along with fruit juices, eggs, and infant formula. The company is also #1 in organic milk in the UK.
You may, as a result, have seen more and more Horizon products (with their bright colors and happy cartoon cows) in your local markets,. Just as with Silk, Dean Foods control over shelf space allows it to establish organic brands right next to their conventional dairy brands.
As the fight over the meaning of organic continues, Dean Foods will be a stakeholder. It has the power to drive other organic brands off the shelves, and it has the power to get its opinions heard on the standards groups that define "organic," that slippery term.
For Horizon, it's a classic story. The company started as a small yogurt maker in 1992. It introduced organic milk shortly after, and saw a meteoric rise in sales over the next decade. Faced with the ongoing prospect of breaking out of health food stores into supermarket chains, and not having the size and scope to fight for shelf space with Dean Foods and others, the founders decided they would sell out. On the other side, Dean Foods takes advantage of the innovation and proof of concept of a small rival, snapping t up when it could possibly threaten them, especially if a competitor had bought the company.
Organic products are all the rage. They can be marked up for buyers who are far more price-insensitive than conventional shoppers. Best of all, they give a kind of pseudo-variety that allows Dean Foods to make money whether you choose regular old milk, organic milk, or soy milk.
4:59:18 PM 
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