(Bloomberg) -- The plant-based milk craze is even sweeping up the biggest U.S. dairy producer.
Dean Foods Co.'s Chief Executive Officer Ralph Scozzafava said the company is debating whether to become a majority shareholder in Good Karma Foods, which makes milk and yogurt from flaxseed. The dairy company first announced a minority stake in Boulder, Colorado-based Good Karma in May 2017, without sharing the dollar value.
“It's a really, really cool brand, and it's growing -- it grew pretty dramatically last year,” Scozzafava said in a telephone interview Tuesday. “Over the next few months, we'll make that decision” about whether to increase the stake, he said.
Dean's investment in Good Karma marks a position in the businesses seeking to disrupt the dairy industry. Plant-based beverages, like almond milk, have seen demand climb in recent years, while U.S. dairy producers are grappling with a long-term decline in traditional milk demand. Dean's shares have slumped about 52 percent in the past 12 months, and the company announced a cost-cutting plan in a turnaround bid earlier this year.
Dean Foods Jumps as Progress With Cost Cuts Helps Dairy Earnings
Other food companies are also expanding outside traditional businesses. Tyson Foods Inc., the largest U.S. meat producer, has invested in several start-ups producing plant-based burgers and lab-grown meat.
“We believe Dean Foods' continued interest and partnership in Good Karma Foods validates we are one of the leading and fastest-growing brands to watch in the plant-based category,” Doug Radi, Good Karma's chief executive officer, said in an emailed statement.
To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net.
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Millie Munshi, Patrick McKiernan
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