Borden Dairy Company is the second major dairy producer to file bankruptcy in recent months citing an increasingly challenging industry for producers and "unsustainable" debt.
The privately-owned Dallas-based dairy company announced Monday it would initiate bankruptcy proceedings, but that it would continue operating the business as usual throughout the process.
Borden plans to use the restructuring to reduce its current debt which it said has become "unsustainable," and maximize the value of the company long-term, according to a release from the company.
Borden's assets and debt both fall within the $100-$500 million range, the company detailed in a filing.
"This reorganization will strengthen our position for future prosperity. Over the past 163 years, we have earned the distinction of being one of the most well-recognized and reputable national brands," Borden CEO Tony Sarsam said in a statement. "We remain committed to 'The Borden Difference,' which is our promise to be the most service-oriented dairy Company that puts people first."
Borden was founded in 1857 and was the first milk company to use glass milk bottles. Today, the company distributes nearly 500 million gallons of milk every year. The producer operates 12 milk processing plants and nearly 100 branches across the country. The company employs 3,300 people.
Another Dallas-based dairy producer, Dean Foods, also filed for bankruptcy two months ago and has been in "advanced discussions" to sell the company. The company had been in decline for several years and stated in its filings that the decline in milk consumption had accelerated, losing 4% year over year.
"Borden is EBITDA-positive and growing, but we must achieve a more viable capital structure," Sarsam said in a statement.
Milk consumption in the U.S. has been declining since the 1970s as consumers have flocked to dairy alternatives like almond milk. The cost of milk has been on the rise as well, increasing by more than $3 per unit since 2016, according to USDA data.
