Saputo Closures Indicate Dairy Industry is Hurting

Consumers Increasingly Turning to None Dairy Alternatives

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Cows stand at the Lookout dairy farm in North Hatley, Quebec, Canada on Wednesday, Sept. 5, 2018. Talks between the U.S. and Canada resumed again Wednesday in Washington, and will continue Thursday as the nations push to reach a deal to update the 1994 accord amid President Trump's threats to move on without Canada. Dairy is one of the core remaining issues. Photographer: Christinne Muschi/Bloomberg , Bloomberg

 

Dairy giant Saputo Inc.’s decision to close two Canadian plants by early next year is the latest example of an industry grappling with a consumer trend away from cow-based products, for health and environmental reasons.

The Montreal-based company will close sites in Trenton, Ontario, and Saint John, New Brunswick, by integrating them into other facilities across Canada in an effort to improve operational efficiency. About 280 employees will be impacted, it said in a statement accompanying third-quarter results.

A consumer shift toward less or no dairy, combined with increasing processing competition, including from Wal-Mart Inc., has sent two of the biggest U.S. operators — Dean Foods Co. and Borden Dairy Co. — into bankruptcy.

Some companies have started innovations to try to win back consumers such as re-branding to focus on sustainability.

Saputo Chief Executive Officer Lino Saputo Jr. said in an interview in November that his company was considering an acquisition to tap growing demand for plant-based beverages.

A conference call is scheduled for 2:30pm New York time.

Source: Bloomberg News by Laura Yin  

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