Walmart announced its intent to build a dairy processing plant to supply its own store-brand milks back in March 2016; as a result, Dean Foods stock dropped 12 percent. Today, on reports that the Walmart plant, which is estimated to serve 600 stores (out of its 4,100+ stores in the US), will open soon, Dean Foods' stock price took another hit, declining a bit over 20%.
Dean Foods’ woes are not unique. Every dairy throughout the country has been faced with two issues: Americans’ consumption of fluid milk since the 1970s continues to decline – down to 18 gallons a year per capita (in the '70s, it topped 30 gallons) – and non-cow milk alternatives continue to gain market share and steal cow-milk drinkers.
Is Walmart’s move into a declining business a good move?
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