- Dean Foods has purchased juice maker Uncle Matt’s Organic, the company said in a press release. Financial terms were not disclosed.
- The maker of organic beverages, including probiotic-infused juices and fruit-infused waters, was started in 1999 by Matt McLean. The company will continue operating out of its offices in Florida as part of Dean Foods, and McLean will still lead the business.
- "Our core strengths in selling and distribution will enable consumers unprecedented access to Uncle Matt's delicious, on-trend line of products," Ralph Scozzafava, Dean Foods CEO, said in a statement. "Not only is the brand a great complement to our conventional portfolio, it further underscores our commitment to the organic space following our announcements of our partnership with Organic Valley and our recent investment in Good Karma's plant-based beverage portfolio."
Dean Foods has been actively expanding its portfolio in the organic space in recent months, including entering into a joint venture with Organic Valley to bring organic milk to retailers through Dean Foods’ processing plants and refrigerated direct-store delivery distribution system. The U.S. dairy processor also is rumored to be a possible buyer of Stonyfield, which DanoneWave was required to divest as part of its purchase of WhiteWave. For Dean Foods, the purchases underscore a way to return to branded organic milk after it spun off WhiteWave four years ago.
In this case, Dean Foods, the largest U.S. milk supplier, is staying in the organic space but going outside of its dairy comfort zone in acquiring a manufacturer of probiotic-infused juices and fruit-infused waters.
Last month, Dean purchased a minority stake in Good Karma Foods. The investment allows the maker of non-dairy milk and yogurt to quickly expand distribution and increase spending in brand building and product innovation. These acquisitions and partnerships are a smart play by Dean, allowing the dairy giant to immerse itself in the rapidly growing market for alternative products while helping to offset the volitility that occurs in the milk side of its business.
But the recent attempt by big food and beverage companies to purchase small, nimble upstarts and integrate them in their larger corporate operations is mixed. Dr Pepper Snapple last week replaced the founder of Bai Brands with a 10-year veteran of the beverage giant, the latest sign that it continues to struggle to merge the company it acquired for $1.7 billion earlier this year into its own operations.
The challenge in any deal is that by trying to instill a new operation and culture into a recently acquired company, the big parent risks losing the innovation, employees and entrepreneurial spirit that made the business successful and resonate with customers in the first place.
That risk is especially pronounced in small upstarts that can easily bend to address the needs of the consumer without having to navigate excessive corporate bureaucracy. Acquiring firms are often tempted to kickstart innovation and rapidly grow distribution to expand public recognition of the brand — with the end goal of boosting sales. But as Dr Pepper and other big players have seen, a slow, measured approach is often the best way to go. Dean Foods would be wise to heed this advice with Uncle Matt’s Organic.