At Dean Foods, we have always been committed to doing business responsibly. We believe this duty extends to protecting
our environment and positively affecting society and the communities where we work and live. This responsibility is truly no small
matter and we are absolutely committed to doing our part.
Corporate Responsibility Report | 2008
Letter from our Chairman and CEO
Dean Foods
is in the midst of transforming our many legacy companies into a single, focused, best-in-class food and
beverage company. This transformation will require our unwavering commitment to continuously improve our capabilities,
our processes and systems, and our business. We believe our progress should be measured not only by our financial performance
but also by the impact we have on society, our communities and our environment.
We are proud of the many companies we have acquired to make Dean Foods the company it is today. These companies have
provided wholesome, nutritious dairy case products trusted by families for many decades. Our companies and their products have
been sources of pride in their local communities, supporting their economies, their people and their causes. We are building on that
legacy of trust and pride as we work to become a better steward of the environment and the larger community in which we all live.
We have taken many first steps in our journey this past year. We completed our first baseline greenhouse gas (GHG) audit
and reported our results to the Carbon Disclosure Project and the California Climate Action Registry. I am very pleased to report
that we have now set specific targets and begun implementing action plans to reduce our greenhouse gas emissions, water
consumption, and the amount of waste we send to landfills. Those targets are set out in our Environmental 2013 Roadmap that
is included in this report. We are also increasing our efforts to engage and develop our workforce, support our communities and
provide consumers with even more healthy choices in the dairy case.
This first comprehensive Corporate Responsibility Report is a milestone for Dean Foods. In this report, we highlight some of
the actions we are taking to improve our business and our impacts. But more importantly, we are acknowledging the responsibility
we all share to improve the world around us. We believe this responsibility is truly no small matter and we are absolutely committed
to doing our part. We know that by taking these actions today, we will be fortifying our future for generations to come.
Sincerely,
G regg L. Engles
Chairman of the Board and Chief Executive Officer
Dean Foods Company
Corporate Responsibility Report | Page 1
About This Report
Welcome to our first comprehensive Corporate Responsibility
Report. In April 2008, we published a Corporate Responsibility
Update in which we publicly discussed our preliminary corporate
responsibility efforts and plans. This report provides more tangible
data concerning our environmental and social impacts and greater
specificity regarding our plans.
As the largest processor and distributor of milk and dairyrelated products in the United States, we are committed to
responsibly managing our social, environmental, marketplace, and
community impacts. This report is intended to provide stakeholders
with an updated and more focused perspective on our corporate
responsibility programs and policies. We expect that future reports
will contain more complete and in-depth data as we develop our
reporting systems and prioritize and further develop the individual
elements of our corporate responsibility program.
Scope and Repo r t ing Year
This report covers the activities of Dean Foods Company, a
Delaware corporation, and its wholly-owned subsidiaries. All of our
operations are located in the United States, with the exception of
one facility in the United Kingdom. We do not publicly report on
suppliers, family farms or entities in which we have a minority
ownership position.
The information contained in this report includes benchmark
data from 2007 to the extent available and certain current or anecdotal data from 2008.
Page 2 | Corporate Responsibility Report
Th e I s sues Co vered – Materialit y Pro ces s
We operate a large number of manufacturing facilities and a substantial distribution fleet. As a result, our operations have numerous
social, community and environmental impacts. In line with the principles of the Global Reporting Initiative (GRI) and with the help of
Business for Social Responsibility (BSR), we undertook a materiality process to identify those issues that most significantly impact
our business success and influence the perspectives and decisions
of our key stakeholders, and over which we have a reasonable
level of control.
For each of the topics covered in this report, we worked with
BSR to provide a clear view of why these issues are important, our
management approach (principles and policies), our key activities to
address these issues, and the indicators we use (or plan to use) to
measure our performance.
I nfo rm at io n and D ata
We have endeavored to provide data and information on our corporate responsibility efforts that is both comprehensive and balanced.
Because our company has grown by acquisition and consolidation,
much of our business remains decentralized and is managed at the
local operating level. As a result, many of our systems for collecting
and reporting data, including data regarding social and environmental performance, are still being developed. We intend to expand the
amount of information we report and improve data integrity over the
coming years. The information presented in this report has been
collected and verified in accordance with our internal standards,
and we believe it provides an accurate representation of our performance and activities.
As the largest processor and distributor of milk and dairy-related products in the United States, we are
committed to responsibly managing our social, environmental, marketplace, and community impacts. This report is intended
to provide stakeholders with an updated and more focused perspective on our corporate responsibility programs and policies.
Contents
D ean Fo ods Co mp any Pro file
D ean Fo ods and Co rp orat e Res p o ns ib ilit y
Product Steward s h ip
Res po nsib le Sourcing
The Environm ent
Our Emplo yees
The Communit y
Governance and Eth ics
Lo o king t o t h e Future
5
8
10
12
16
22
24
26
28
Page 4 | Corporate Responsibility Report
Dean Foods Company Profile
We are the largest processor and distributor of dairy
products in the United States. We have achieved this position
through a series of acquisitions that have helped transform and
modernize the American dairy industry. Our principal product offerings are milk and other dairy-related items, including creams and
creamers, cottage cheese, yogurt, sour cream and ice cream,
soymilk and other soy-based products.
Our Histo r y and Strategy
Dairy processing in the United States has historically been a local
industry serving local markets, due to the expense of transporting
milk and its highly perishable nature. With cold storage and refrigerated transportation, dairy processing has become more regional,
but the industry remained fragmented with excess capacity. The
strategic premise of the formation and growth of our company was
that, by consolidating this fragmented industry, we could achieve
greater economies of scale, become more efficient, and better serve
the needs of a consolidating base of retail customers.
DEAN
1925
Samuel E. Dean Sr. purchases the Pecatonica Marketing
Company, an evaporated milk
processing facility located in northwestern Illinois.
1927
Company changes name
to Dean Evaporated Milk Company.
Additional Illinois dairy plants are
purchased.
1929
Company changes name
to Dean Milk Company.
1981
After acquisitions of
several dairies nationwide, Dean
Foods Company is listed on the New
York Stock Exchange under the
symbol “DF.”
FOOD S
CORPORATE
1993
Recognizing an opportunity to consolidate the highly fragmented dairy industry, Suiza Foods’
founders make their first dairy
acquisition with the purchase of
Suiza Dairy in San Juan, Puerto Rico.
Additional local and regional dairy
acquisitions follow.
1997
Suiza Foods is listed on
the New York Stock Exchange under
the symbol “SZA.” Suiza Foods
merges with The Morningstar Group,
Inc., expanding Suiza’s branded and
value-added product line.
2000
We began acquiring local and regional dairy operations in 1993.
Between 1993 and 2000, operating as Suiza Foods Corporation, we
completed more than 40 acquisitions and became the largest fluid
milk processor in the United States. In 2001, we acquired Dean
Foods Company, then the second largest fluid milk company in the
United States, and assumed its name for the combined entity.
The combined Dean Foods Company has continued to acquire local
and regional dairies, and we have added national brands such as
Horizon Organic® and Silk® to our portfolio. Today, Dean Foods
Company accounts for approximately 35% of total milk sales in the
United States.
Notwithstanding our size, our company is still evolving as we
continue our efforts to transform Dean Foods into a focused, best-inclass food and beverage company. While we have achieved meaningful economies of scale to date, our future success will require that
we continue to reduce costs and improve our manufacturing and distribution operations systemically across the company. We must also
deliver more innovation to the dairy case, providing consumers with
differentiated, value-added products to stem the decline in per capita
milk consumption.
After more than 40 dairy
acquisitions, Suiza Foods Corporation
becomes the nation’s largest dairy
processor and distributor.
HISTORY
2001
Suiza Foods Corporation’s acquisition of Dean Foods
Company is complete. Suiza changes
its name to Dean Foods Company
and its ticker symbol on the NYSE
changes from "SZA" to “DF.” The
combined company’s headquarters
is located in Dallas, Texas.
2002
Dean Foods acquires
Boulder, Colorado-based White Wave,
Inc., maker of Silk, the nation’s
leading refrigerated soymilk.
2004
Dean Foods acquires
Horizon Organic® Holding Corporation, maker of a full line of organic
milk and dairy products.
2004
Dean Foods consolidates
Silk, Horizon Organic and other
branded businesses as WhiteWave
Foods Company, headquartered in
Broomfield, Colorado.
2005
Dean Foods spins off
Dean Specialty Foods Group, which
includes pickles, dips, dressings and
foodservice products, as TreeHouse
Foods (NYSE: THS).
2006
Standard & Poor’s
announces that Dean Foods will be
added to the S&P 500 Index.
Corporate Responsibility Report | Page 5
locations. Our extensive network of refrigerated transportation vehicles is one of the
largest in the country. We operate over
4,700 refrigerated trucks, 2,600 tractors
and 6,000 refrigerated trailers. At year-end
2007, we had approximately 26,000 employees, the majority of whom are involved
in our manufacturing and distribution
operations.
Ho w We A re St ruct ured
We are organized into two business divisions that reflect the distinct supply chains
and characteristics of our different product
categories. Our DSD Dairy (Direct Store
Delivery) segment includes the majority of
our manufacturing facilities and primarily
involves highly perishable products that require “direct” delivery to customers’ stores
in refrigerated trucks or trailers. Our
WhiteWave-Morningstar segment manufactures and sells products with more extended shelf lives that are typically delivered
to customer warehouses through third-party
transporters or distributors.
Our Pro d uct s and Brand s
What We Do
We purchase agricultural inputs – the most
significant being raw milk – and process
them into consumer products, then transport
them for final sale to a wide variety of
outlets. The conventional raw milk that we
purchase comes from approximately 12,000
dairy farmers across the United States. Our
organic raw milk is supplied from almost
500 organic family farms and from two
organic farms that we own and operate.
We have more than 100 manufacturing facilities located in 36 states and
one manufacturing facility in the United
Kingdom. Our products are distributed to
a wide variety of outlets, including grocery
and mass merchandise retailers, hotels,
restaurants, convenience stores, schools,
hospitals and other institutions, via
approximately 6,500 different delivery
routes that service more than 150,000
Through the DSD Dairy and WhiteWaveMorningstar platforms, we sell a wide variety of dairy and soy-based products,
including conventional and organic milk,
ice cream, soymilk and other cultured soy
products, half-and-half, whipping cream,
yogurt, cottage cheese, sour cream, butter
and coffee creamers. We also sell a small
amount of non-dairy and non-soy products,
including fruit juices, iced tea and water.
Our products are sold under well-known
local, regional and national brands and
numerous private labels. Our national brands
include Horizon Organic, Silk, International
Delight® and LAND O’LAKES®, which we
Our products are distributed to a wide variety of outlets, including grocery and mass merchandise retailers,
hotels, restaurants, convenience stores, schools, hospitals and other institutions, via approximately 6,500
different delivery routes that service more than 150,000 locations.
Page 6 | Corporate Responsibility Report
D ean Foods – Key Financial Per formance Dat a
(Dollars in thousands – except share data)
Net Sales
Net Earnings
Income Taxes
Free Cash Flow
Long-Term Debt
Earnings Per Share
2006
2007
10,098,555
225,414
175,450
324,310
3,355.851
$1.68
11,821,903
131,353
84,007
108,802
5,272,351
$1.01
ABOUT
use under a license from Land O’ Lakes,
Inc., a Minnesota dairy cooperative. Our five
largest regional brands are Dean's®, Garelick Farms®, Country Fresh®, Alta Dena®
and Mayfield®. In addition, we sell a significant portion of our products under private
label or “store” brands of major retailers.
For a list of our brands, please visit our
website at www.deanfoods.com.
Our Cust omers and Suppliers
of conventional raw milk is Dairy Farmers
of America (DFA), which is the largest dairy
cooperative in the United States. We purchase the balance of our conventional milk
and most of our organic milk from other
dairy cooperatives and independent family
farmers. Resin is typically purchased
through Consolidated Container Holdings,
LLC, in which we own a 25% minority interest. For the remaining inputs, we do not
rely heavily on any single supplier.
RAW
MI LK
Raw Milk Pricing
The dairy industry has a long history
of government regulation intended
to stabilize pay prices to dairy farmers. Federal milk marketing orders
(FMMO) established by the Secretary of Agriculture specify minimum
prices to ensure orderly marketing of
raw milk from the farmer (producer)
Our largest customers are major retailers
who account for well over half of our sales,
followed by food service providers (hotels,
restaurants, etc.) and convenience stores.
The primary inputs utilized in producing
our products are conventional and organic
raw milk, natural or organic soybeans, conventional and organic sugar, flavorings,
juice concentrates, palm oil, and resin (to
make plastic bottles). Our primary supplier
Geo g rap h ic Reach
to the processor. The federal government’s minimum prices are calcu-
Dean Foods’ dairy processing plants and
distribution system are located and operate
in every region of the country except the
Pacific Northwest. Our products are sold in
all major urban centers. The principal executive and administrative offices of Dean
Foods are located in Dallas, Texas.
lated monthly based on supply and
demand. The prices vary depending
on the processor’s geographic location and the end use of the product.
The Class I (fluid milk) price is the
higher of Class III or IV prices plus a
fixed differential, varying by market
order and location. Processors often
pay a premium for milk meeting exceptional quality standards.
Raw Milk Classes
Raw milk is divided into four classes,
based on its end product. Class I
is milk that is used for fluid (or beverage) milk, Class II is used for
“soft” products (sour cream, cottage
cheese, ice cream, yogurt), Class III
is used for hard cheeses, and Class
IV refers to milk used for butter and
dry products (non-fat dry milk).
Dean Foods Processing Facilities
Corporate Responsibility Report | Page 7
Dean Foods and Corporate Responsibility
Corporate responsibility covers a wide range of activities at Dean Foods, from
local volunteer initiatives to reducing our greenhouse gas emissions to improving safety in our workplace. We believe that all of these efforts are interrelated.
We look at them as ways to make us a better corporate citizen, an employer of
choice, a responsible vendor, a steward of the environment and a trusted partner in the community.
Our Approach to Corporate
Res ponsib ilit y
As a large processor and distributor of
dairy and dairy-related products, we understand that our operations have both
positive and negative environmental and
social impacts. We are committed to managing these impacts in a responsible way
and communicating our goals and
progress. We know this is the expectation
of all our stakeholders, including our employees, shareholders, customers, consumers, suppliers and vendors. A critical
aspect of managing our impacts is to
prioritize those that are most significant.
We have done this through a materiality
analysis through which we ranked issues
according to their importance to our
stakeholders and our business success.
The most material issues identified through
this analysis are addressed in the remainder of this report.
Because our company has grown
through multiple acquisitions, we have
many disparate plant configurations and
processes. Implementing a comprehensive
corporate responsibility program requires us
to analyze each of our facilities across the
country. We are in the process of doing that
difficult work – collecting information, identifying areas that need improvement and
Page 8 | Corporate Responsibility Report
sharing best practices across our company.
Over the coming years, we expect to improve processes for consolidating information and implementing standards in many
areas, including corporate responsibility.
Our successful implementation of a
corporate responsibility program will also
require that all our employees recognize
the importance of linking sound business
strategies with social responsibility and environmental stewardship.
Ho w We Manag e Co rp orat e
Res p ons ib ility
We have created an organizational structure with clear lines of accountability to
support the day-to-day management of corporate responsibility policies and programs
and allow for the identification of emerging
issues important to our stakeholders.
Board Accountability. The Senior Vice
President, Corporate Responsibility and
Sustainability, reports to the audit committee of the Board of Directors on a regular
basis regarding our corporate responsibility
activities. The audit committee oversees
our work in the areas of corporate responsibility and sustainability, providing feedback and input on corporate responsibility
efforts as needed.
Management Structure. Our Senior Vice
President, Corporate Responsibility and
Sustainability, coordinates programs associated with our corporate responsibility
efforts, including cross-functional implementation of policies. This senior executive
works with key employees throughout the
organization who are helping us define and
reach our CSR goals. For example, many of
our ethics and compliance activities are
administered by the HR organization and
many of our sustainability efforts require
the experience of our Supply Chain experts,
including our energy, environmental, and
safety professionals. WhiteWave Foods also
has a Vice President, Responsible Livelihood, who concentrates on corporate responsibility and sustainability programs
across its business.
Sustainability Advisory Group. We formed
an advisory group to involve a number of
senior executives from across the company
in our corporate responsibility efforts. The
group’s mission is to provide strategic guidance on the policy framework and programs within the corporate responsibility
area; review progress against sustainability
objectives; and provide a forum where environmental and social issues may be discussed and decided.
Issues Management Working Group. This
cross-functional team works together to
identify, prioritize and manage issues and
trends that are related to our corporate
reputation and the interests of our stakeholders. The group ensures that the viewpoints of various constituencies are
appropriately considered, and that our corporate positions are communicated and
applied consistently across the company.
Third-Party Advocates. We work with a
number of industry and trade associations
on both the local and national levels. With
organizations such as the International
Dairy Foods Association (IDFA), Dairy
Management, Inc. (DMI), and Grocery
Manufacturers of America (GMA), we support industry sustainability efforts and
campaigns to educate consumers and customers about our products and practices.
We also support their efforts to have the
voice of the dairy industry heard by government decision-makers.
Corporate Responsibility Report | Page 9
Product Stewardship
First and foremost, we are committed to helping people live better by providing
them with wholesome and nutritious food and beverage options. From traditional
dairy products such as milk, yogurt and cottage cheese, to alternatives like lactosefree milk, soymilk and organic milk, we sell products that help consumers live
healthy and nutritionally balanced lives. We are proud to be in the business of
sustaining healthy lifestyles through the lasting benefits of our dairy case products.
Th e Nat ural Go o d nes s
of Dair y
Dean Foods’ dairy products provide natural
health benefits. About 73 percent of the
calcium available in the food supply is provided by milk and other dairy products.
According to the United States Surgeon
General, the rise in bone deterioration (osteoporosis) in the United States is directly
linked to a decline in the nutritional quality
of many Americans’ diets. Among the
Surgeon General’s recommendations is the
consumption of calcium- and vitamin-rich
foods, including dairy products. In addition
to promoting bone health, several studies,
including one recently published by the
American Heart Association, show that increasing dairy intake as part of a lowcalorie, nutrient-rich diet could lead to a
significant reduction on overall chronic disease risk. To find out more about the
health benefits of our products, please visit
our website at: http://www.deanfoods.com.
About 73 percent of the
calcium available in the food
supply is provided by milk
and other dairy products.
Page 10 | Corporate Responsibility Report
B ring ing Soy
into th e Mainst ream
We sell a full line of Silk soy products, including plain and flavored soymilk, enhanced and light soymilk, soy creamers
and soy yogurts. According to the U.S.
Food and Drug Administration, a diet low
in saturated fat and cholesterol that includes 25 grams of soy protein a day may
reduce the risk of heart disease. Soy protein may also help to promote bone health,
alleviate symptoms of menopause and reduce the risk of certain types of cancer.
These benefits have been found only from
whole soy products and not from highly
processed soy isoflavones. We use whole
soybeans in the manufacture of our products, ensuring the maximum benefits of
soy. To find out more about the benefits of
soy, please visit the Silk website at
www.silksoymilk.com.
by a 20-member board, which is monitored
by the U.S. Department of Agriculture’s
(USDA) Agricultural Marketing Service.
We also take seriously our role in helping consumers better understand the health
benefits of soy and encouraging them to introduce soy into their diets. For example,
WhiteWave Foods supports the World Soy
Foundation, a program of the World Initiative
for Soy in Human Health (WISHH). Founded
by U.S. soybean farmers, the World Soy
Foundation (WSF) is a 501(c)(3) organization that works collaboratively with humanitarian organizations, corporations, public
and private foundations, international organizations, U.S. and international governments, and private individuals to deliver soy
protein and nutrition education to people in
developing nations. The WSF works under
the auspices of WISHH.
sustainable source of DHA that does not
use fish oil and does no harm to our threatened aquaculture. In 2008, we will also
begin to introduce DHA-fortified milk in certain regions of the country under our
trusted regional brands.
We recently established a Research and
Innovation center in Broomfield, Colorado,
and have been developing our capabilities
in the areas of research and product development and innovation. With new capabilities and resources, we expect to be in a
position to find ways to improve our packaging and the taste, quality and nutritional
benefits of our products. Our focus will be
on improving the natural goodness of our
dairy and soy products with added nutritional benefits such as Omega-3s and probiotics. One of the new products to be
launched nationally will provide our con-
Res earch and Develo p m ent
sumers with a line of fortified low-fat and
fat-free milks. These products are designed
to provide rich and creamy tastes of 2% or
whole milk with lower fat content. We will
explore other possible product extensions,
as well as the introduction of new products
that leverage our manufacturing and distribution systems.
Nutritional Education
Consumers are becoming increasingly concerned with nutrition and product content.
We work continuously to advance nutritional
education and promote healthy choices.
To help consumers, we post nutritional
information on our corporate and brand
websites and on many lines of packaging.
We often include educational information
in our advertising and support scientific
studies to further our collective understanding of nutrition.
We are actively engaged with
MilkPEP®, the Milk Processor Education
Program, which directs the national “got
milk?”® campaign in the United States.
MilkPEP is funded by the nation’s milk producers who are committed to increasing
fluid milk consumption. Activities are led
In 2007, we introduced Horizon Organic
Milk Plus DHA Omega-3. DHA is an
Omega-3 fatty acid that has been shown to
support brain, eye and heart health through
every stage of life. Our Silk Plus and Horizon
Organic Milk Plus DHA Omega-3 are both
fortified with life’sDHA®, a vegetarian and
Corporate Responsibility Report | Page 11
Responsible Sourcing
As the largest dairy processor in the United States, we have a significant impact
on the food and agriculture value chain. Our first priority is to ensure superior
quality and safety of our products for our consumers. That duty requires that we
understand where our inputs originate and how they are processed.
Conventional R aw Milk
Our largest purchase is raw, unprocessed
milk. We source our conventional raw milk
from approximately 12,000 dairy farmers
located throughout the United States.
Approximately 80% of our total purchases
of conventional raw milk are from dairy
cooperatives and the remaining 20% is
purchased from individual farmers.
Over the past few years, many of our
consumers and retail customers have requested that we provide products made from
milk produced by dairy cows that are not
treated with the artificial growth hormone
rbST (recombinant bovine somatotropin).
The FDA has approved the commercial use
of rbST in the U.S. and determined that no
significant difference can be shown in milk
from cows treated with rbST and those not
so treated. However, to meet the growing requests of consumers and retailers, last year
we began to request that our dairy suppliers
provide us with raw milk from cows not
treated with rbST. Effective July 1, 2008,
virtually all of our fluid milk is sourced from
cows not treated with rbST.
We have also taken the position that we will
not accept raw milk produced from cloned
animals. Numerous surveys have shown
that Americans are not inclined to buy dairy
products that contain milk from cloned
cows. Although the FDA has determined
that meat and milk from cloned animals is
safe for consumption, it has put in place a
voluntary moratorium on the sale of these
products in the U.S. In the event that this
moratorium is lifted, we will implement appropriate procedures to ensure that the raw
milk we purchase is not from cloned cows.
We encourage the roughly 12,000 producers across the country that provide us
with raw milk to meet or exceed industry
and federal standards for humane animal
treatment. Treating animals with respect and
compassion is part of every dairy farmer’s
heritage. Farmers recognize that animal
well-being practices lead to the production
of high-quality, safe and wholesome milk.
We expect our farmers to provide
their animals with a nutritious diet; quality
medical care; clean, healthy and comfortable living conditions; sanitary milking
areas; and safe transportation. For more
CASE
STUDY
Greening t he Mar yland Farm
The Maryland dairy has been certified organic since
1998, with a history of conserving natural resources
and land preservation. The farm is located in the
ecologically sensitive Chesapeake Bay area and
uses a variety of environmental practices to help
build the soil and care for its cows while protecting
this watershed and the diversity of the ecosystem.
A berm and dam structure was put in place
along the creek to minimize erosion and capture
rainwater as part of the ongoing efforts to improve
biodiversity and riparian areas. The dam, which is
15 feet deep at its deepest point, can hold up to six million gallons of rainwater runoff.
Cattails (Typha) were planted in the wetland area to create a habitat for local wildlife,
and to capture and filter runoff water from the compost area. All manure produced on
the farm is composted to use as a soil amendment.
This farm is an active grazing operation, using
Holistic Management International as a guide for
land management and grazing principles. In addition, the Maryland dairy worked with the state’s
Conservation Reserve Enhancement Program to
create a buffer area to increase wildlife habitat.
Other environmentally sound improvements to the dairy include the addition of solar
panels which were installed on the farm’s shop
building to heat the water used in the shop, as
well as radiant heating of the floor.
information on our policies regarding
treatment of dairy animals, please refer to
http://www.deanfoods.com.
Org anic Farm ing
We sell a wide range of certified organic
dairy products, such as plain and flavored
milk, yogurt, ice cream and cheese, through
our Horizon Organic brand. Horizon
Organic uses only organic raw milk that is
sourced from almost 500 family farms
across the United States. We source 85%
of the raw organic milk from farmer partners
around the country and 15% from two organic dairy farms that we own. Our goal is
to share the practices and procedures on
the two farms that we own with the rest of
the industry. Today, we work extensively
with those family farmers who provide us
with milk to ensure organic standards are
met. In addition, we work directly with
dairy farmers considering converting to
organic, helping them understand the
benefits of organic production and the
requirements for certification.
The Horizon Organic brand has been
a pioneer in setting standards and best
Corporate Responsibility Report | Page 13
practices for organic farming. Horizon’s
founders played a key role in helping to
develop the National Organic Standards
and the USDA organic seal. The National
Organic Program (NOP) develops, implements and administers national production, handling and labeling standards
for organic agricultural products. We have
worked to ensure that these standards
are set at the highest levels and are
strictly enforced.
We have also developed our own additional Standards of Care for the two organic dairy farms we own and operate. Our
Horizon Organic Standards of Care are
guided by a number of core beliefs, focused on providing holistic, preventative
and natural animal care and welfare, and
managing pastures to improve the quality
of the soil, enhancing its ability to sequester carbon and promoting the biodiversity and nutritional value of our crops. (See
http://www.horizonorganic.com/aboutus/
press/2007_3_8.html for the Horizon
Organic Standards of Care.)
N o n - d a i r y S o u r c i n g . Dean Foods also
purchases non-dairy inputs for the manufacture of our products. Our principal nondairy inputs include organic and natural
soybeans (used for the manufacture of our
Silk products), packaging materials (plastic
bottles, plastic resins and paper board),
and sugar, sweeteners and cocoa.
S o y b e a n s . We source more than 700,000
bushels of organic and non-genetically
modified (non-GMO) soybeans annually,
farmed on more than 3,000 acres of farmland. We currently source all of our soybeans in North America and they are
subject to robust quality testing and evaluation protocols. We have partnered with
Conservation International to develop
sourcing guidelines, which will incorporate
best practices from farmers and vendors
that share our values and commitment to
sourcing soybeans that are produced in a
sustainable, socially responsible and ethical manner.
P a c k a g i n g M a t e r i a l s . We purchase approximately 40% of our plastic bottles from
Page 14 | Corporate Responsibility Report
third-party U.S. suppliers, and we manufacture the remaining 60% from plastic
resins which we purchase. We purchase
our paper board (used to make cartons for
our fluid milk and soymilk products) from
one or more North American suppliers.
S u g a r s , S w e e t e n e r s , C o c o a s . Our
sugars, sweeteners and cocoas are sourced
principally from U.S. suppliers. Some of
these suppliers depend on international
markets for their inputs. For these product
categories we have begun to include overall
sustainability standards in our procurement
criteria and supplier contracts. We recently
developed our “Total Customer Satisfaction”
criteria, including corporate responsibility
criteria, and have begun to require that our
suppliers meet these requirements.
We are guided in our purchasing
activities by the corporate responsibility
principles of the Institute for Supply
Management (ISM). These principles set
out requirements for supply chain partners
to adhere to regarding community, supplier
diversity, upstream and downstream environmental practices, ethics and human
rights. We are now incorporating these
new strategic sourcing principles in purchasing contracts with our key suppliers.
Food Safety
We are committed to providing safe, quality products that consumers trust. The
many local dairy companies that have
been brought together to make up today’s
Dean Foods have been making quality
dairy products that families trust for
decades. The quality of our products and
health of our consumers remain our first
and foremost responsibility.
All segments of the dairy industry, including milk producers, bulk milk transporters and milk processors, are required to
be certified by and comply with the provisions of the Grade A Pasteurized Milk
Ordinance (PMO). The PMO requires the
application of stringent sanitation measures
throughout the production, handling and
pasteurization of milk and milk products.
Our quality control procedures begin
with our raw milk. As tankers of raw milk
are brought into our manufacturing plants,
the milk is inspected and tested by our onsite labs to ensure that our quality standards, as well as those mandated by
federal and state regulations, are met. We
have adopted policies requiring that tankers
of raw milk be sealed and arrive at our facilities with accurate logs maintained and
seals intact to protect against tampering.
In our plants, we rely on our regional
quality and safety experts to ensure that
federal and state regulations for quality and
safety are met. Our finished products are
tested and samples are retained to ensure
product quality and stability for the dura-
Hor izon Or ganic Pro ducer Education (HOP E ) p ro gram
Farmers are the backbone of our business. We have long supported American family farms in their transition from conventional to organic farming. The HOPE program was established in 2001 to assist conventional farmers with the transition to
organic, and to provide ongoing support and education for Horizon Organic family
farmers. The program provides hands-on support from our producer relations staff,
financial and technical assistance during the conversion to organic, access to dairy
and land conservation experts, assistance in obtaining organic certification and a
scholarship program to encourage students to study organic dairy production. (See
http://www.horizonorganicfacts.com/supporting-family-farmers.html.)
tion of the product shelf life. Our facilities
receive routine internal and external quality
assurance and food safety assessments.
We have begun adoption of third-party
audits that have been recognized by the
Global Food Safety Initiative (GFSI). The
GFSI approach to measuring the effectiveness of a firm’s food safety and quality
programs is in line with our customers’
expectations. By year-end 2008, 90 of our
facilities will have Level 2 certification and
22 will have Level 3 certification by the
GFSI-approved audit firm, Safe Quality
Foods (SQF). Our objective during 2009 is
to achieve Level 3 certification in all of our
facilities, which is the highest qualification
a firm may receive.
For our organic products, we comply
with stringent internal quality standards as
well as the requirements set forth in the
National Organic Program. We maintain organic certification requirements and are inspected by third-party auditors accredited
by the USDA.
Whenever one of our products poses a
serious and immediate threat to consumer
health, we initiate a recall of the product
from the marketplace. In 2007, we implemented one such product recall. The recall
was the result of an undeclared allergen in
an ice cream product. In response, we are
improving our processing technologies to
ensure that packaging and allergenic ingredients are appropriately managed. In
2008, through September, we implemented one recall as the result of an undeclared milk allergen in a soy product. We
also initiate product withdrawals from time
to time when we learn that the quality of a
product in the market does not meet our
standards or expectations.
Our goal is to continuously improve
our processes and ensure the highest quality of all of our products. In 2008, we implemented a Quality Improvement Program
that is currently in the pilot phase in five
plants. Our 2009 objective is to roll the
program out to another twenty plants
across the company.
Corporate Responsibility Report | Page 15
The Environment
We are proud of the wholesome, nutritious products that we manufacture and sell
and the vital role our products play in creating healthy lifestyles. At the same
time, we recognize that our operations have a significant impact on the environment and we have a responsibility to manage that impact. With the escalating
concerns surrounding climate change and ever-increasing demands on our limited
natural resources, this responsibility has never been greater.
Within this complex landscape, we have established our Environmental 2013
Roadmap which prioritizes our efforts to reduce our impact on the environment in
three key areas – 1 greenhouse gas emissions, 2 water usage, and 3 solid waste.
Page 16 | Corporate Responsibility Report
2
Greenh ous e Gas Emissions
We believe that there are opportunities
throughout the business to be more energyefficient. We have set a goal to reduce our
carbon footprint by 20% by 2013. We plan
to achieve this reduction through energyefficiency initiatives, renewable energy
investments, and industry collaborations.
In 2007, we compiled our first comprehensive greenhouse gas inventory consistent with the principles and guidance of
the World Resources Institute’s Greenhouse Gas Protocol. Since then, we have
%
Based on the work we completed in measuring and understanding
our footprint, we have set a target to reduce our carbon emissions by 20% per gallon of product by 2013.
submitted overall data for our 2006 and
2007 emissions to the Carbon Disclosure
Project (CDP) and facility-level data for our
California operations to the California Climate
Action Registry. We plan to continue
providing data to the CDP. We will report
our 2009 carbon footprint to the Climate
Registry in 2010.
For our initial footprint, we chose to include emissions from operations that we operate and control. This includes the plants
we operate across the United States, the
trucks and trailers we operate nationwide,
and the two organic dairy farms we own and
operate in Idaho and Maryland. We have not
included (1) the upstream emissions associated with agricultural inputs and the packaging or products provided to us by
third-party suppliers or (2) the downstream
emissions from third-party distributors and
haulers of our products or from the retail
stores where our products are sold.
Our total calculated annual emissions
for 2007 were approximately 1.6 million
metric tons of CO2e (carbon dioxide equivalents), or 1.03 pounds per gallon of product produced. Our three largest sources of
greenhouse gas (GHG) emissions are from:
purchased electricity and onsite fuel
combustion to operate our plants (64%);
mobile fuel combustion and refrigerants
to operate our trucks and trailers (32%);
and
our farms in Maryland and Idaho
and waste treatment operations (4%).
Based on the work we completed in measuring and understanding our footprint, we
have set a target to reduce our carbon
emissions by 20% per gallon of product
by 2013.
P l a n t O p e r a t i o n s . Our plant operations
are the largest component of our carbon
footprint. We are committed to removing at
least 200,000 metric tons of CO2e by
2013 by replacing current amounts of purchased electricity and onsite fuel combustion with renewable or clean energy and
reducing energy demands with investments
in more energy-efficient equipment and
machines. To assist in achieving this goal,
we have conducted energy audits at several
of our larger manufacturing facilities. All of
these audits have identified opportunities to
Corporate Responsibility Report | Page 17
reduce our use of electricity and fuel and
resulting carbon emissions.
Specific examples of projects we expect to implement in our facilities include:
Converting biogas into energy
Utilizing Cogeneration (CHP) plants as a
viable, cleaner alternative to traditional
energy sources
Retrofitting/replacing inefficient
equipment and lighting
Adopting high-efficiency technology
Upgrading insulation and reducing
thermal loss
Investing in methane recovery systems
Recovering unused heating/cooling
stream systems
Installing state-of-the-art and real-time
controls and software in our production
facilities
We are actively researching opportunities to
generate our own energy, and complementing those opportunities with purchases of
Page 18 | Corporate Responsibility Report
renewable energy. Cogeneration is one of
our core strategies to reduce our carbon
footprint. Cogeneration captures excess
heat from natural gas–fired generators and
uses it to produce steam and hot water for
processing operations, reducing our total
energy consumption and total emissions
into the atmosphere. Our first cogeneration
project was implemented in 2004 and has
been followed by four others. In 2007, our
cogeneration projects produced 23,508
MWh of energy.
Another of our key strategies is to convert and/or capture biogas from our waste
water to use as a renewable source of energy. We have been awarded multiple
$300,000 grants by the Massachusetts
Technology Collaborative to build two biogas power generation units at our plants in
Franklin and Lynn, Massachusetts. The biogas will be captured from onsite waste
water treatment facilities and then converted into energy for each plant. (To learn
more about the Massachusetts Technology
Collaborative, go to http://www.mtpc.org/.)
We continue to encourage the development of more renewable energy initiatives
and have supplemented our energy purchases with purchases of renewable energy.
In our WhiteWave division, we have committed to offsetting 100% of the electricity
used in the production of our Silk and
Horizon Organic products. In 2007, we purchased 64,398 MWh of renewable energy.
Tr a n s p o r t a t i o n . We own and operate one
of the largest refrigerated distribution fleets
in the food and beverage industry. Each
day, our network delivers products from our
processing plants to more than 150,000
locations from coast to coast.
The scale of our distribution network
enables us to deliver our dairy products
anywhere in the country. It also gives us the
ability to meet customer needs and, over
time, to optimize our routes for maximum
efficiency. This network is one of our most
important and strategic assets; however, it
is also a significant contributor to our carbon footprint. We have begun to more
closely monitor and manage the environmental impacts associated with our fleet,
and we strive to be an environmental leader
in product distribution within our industry.
Our goal is to remove 50,000 metric
tons of CO2e from our transportation system by 2013, based on current production
volumes. To achieve this goal, we launched
our Smart Fleet initiative in 2007. Through
this initiative, we are currently focused on:
(1) optimizing routes, (2) investing in new
technology and equipment, and (3) training
our drivers.
Over the past few years, we have invested in on-board computers that enable
us to better manage deliveries, including
the frequency of visits to a location, the
order of visits, and the amount of time
spent at each visit. By the end of 2008,
25% of our fleet of 7,300 power units will
be using these on-board computers, with
the remainder of the fleet scheduled to be
outfitted in 2009. This technology has assisted in saving fuel and improving the efficiency of our delivery resources. Another
benefit of the on-board system is to continually improve our safety and driving records
by providing real-time computerized
records for use in understanding driver
behavior and aiding the Department of
Transportation during inspections.
We continually seek to improve the
performance of our distribution network,
identifying key areas for innovation and investment each year. We have partnered
with our suppliers to develop and improve
our fleet technology – creating lasting value
for our company, our customers, and the
many other companies who benefit from
the development of improved transportation
equipment.
In 2007, our efforts focused on the
adoption of new cold-plate refrigeration
technology to replace mechanical refrigeration systems in our trucks. The cold-plate
technology has shown to reduce diesel fuel
consumption by an average of 900 gallons
per truck with 18,000 pounds of associated GHG emissions. Advances in autodefrost have further helped conserve water
and reduce waste.
We have replaced nearly 400 mechanical refrigerated trucks with cold-plate
refrigerated trucks and are working to convert all of our truck purchases to coldplates by 2011. This should reduce our
annual diesel usage by nearly one million
gallons or the equivalent of taking 200
trucks off the road per year.
During 2008, we took a number of
steps to improve the fuel efficiency of our
fleet, including the programming of each
power-unit’s electronic control module for a
top speed of 65 mph, elimination of excessive idle-time and the introduction of progressive shifting of manual transmission.
We also added automatic tire inflation systems to approximately 15% of our trailers.
Local driver training and incentive programs have helped decrease fuel usage and
improve our fleet’s fuel efficiency. In addition, as active members of the American
Trucking Association’s Technology Maintenance Council, we have adopted many of
that group’s recommended maintenance
practices to further help improve the safety,
efficiency and reliability of our fleet.
Even small actions by our employees,
when carried out across our system, can
have a significant effect on our overall environmental impact. Our local driver training
and incentive programs are designed to decrease fuel usage and improve our fleet’s
fuel efficiency. Training programs educate
drivers about the environmental benefits of
everyday activities such as proper vehicle
maintenance, reduction of engine idling,
tire pressure, driving speeds, and the loading and unloading of product from refrigerated compartments.
In 2007, approximately 10% of our
drivers completed this type of training. In
2008, we are expanding the training programs and tracking their direct impact.
Improving our fleet’s overall fuel efficiency
by just one mile per gallon will reduce
our annual greenhouse gas emissions by
approximately 80 million pounds.
Our extensive network of
refrigerated transportation
vehicles is one of
the largest in
the country.
Corporate Responsibility Report | Page 19
We have focused on reducing the number of grams of resin required to make our plastic containers. We
also reuse any flawed plastic jugs or excess plastic, returning such material to our blow mold system to be melted
down and remade – reducing our total input and creating zero waste in the process.
Water Management
Protection of our water resources is a pressing priority, both nationally and globally. As
a manufacturer of perishable dairy products, we use significant amounts of water in
our processing activities and in the cleaning
and sanitizing of our equipment. Our goal is
to reduce water consumption by 30% per
unit of product produced by 2013. While
our first priority is to minimize the amount of
water we use, we must also continue to find
ways to return clean water to the ecosystem
after it has been used in our operations.
In 2008, we performed two water audits and, in both cases, found opportunities
to reduce our water usage. We are taking
the findings from these audits and other
best practices across the business to build a
catalog of potential conservation projects for
use by our plant managers. For example,
many of our plants have implemented automatic shut-offs on hoses, reduced the
amount of water used to rinse tanks, and
attached water meters to certain waterintensive equipment, like boilers and
condenser water towers, to better monitor
usage. In 2009, we will research and pursue technologies to reuse as much water
as possible (without compromising quality
or sanitation), and we will also create a
baseline of our water usage and establish
key performance indicators to measure,
track and reduce our usage.
Solid Was te Managem ent
Our most significant solid waste results from
the packages we use for our products and
the waste generated by our plants.
The majority of our packages are made
from High Density Polyethylene (HDPE)
resin (gallons and half gallons) and paper
cartons (half gallons, quarts, pints and half
pints). Each of these packages has environmental tradeoffs when comparing total
carbon emissions, recyclability, and use of
water and other natural resources. Over the
past few years, we have focused on reducing
the number of grams of resin required to
make our plastic containers. We also reuse
any flawed plastic jugs or excess plastic,
returning such material to our blow mold
system to be melted down and remade –
reducing our total input and creating zero
waste in the process. We are also switching
many of our packages from Polyethylene
Terephthalate (PET) to HDPE, because
HDPE results in less waste and requires
less energy to produce. Consumers also
have more opportunities to recycle HDPE.
We converted 2.1 million pounds of plastic
packaging to HDPE in 2007 and will convert another 3.4 million pounds this year.
The dairy industry minimizes its solid
waste through the use of plastic milk crates.
Each crate is made of highly durable plastic
(and, in some cases, recycled content) that
can be used repeatedly. We believe this
system to be more efficient and less harmful
to the environment than typical distribution
containers, such as corrugated cardboard
or shrink wrap, which have limited reuse
potential before entering the recycling or
waste stream.
We have also begun to address unnecessary waste in our plant operations. Our
scheduled to have a comprehensive internal audit approximately every three
years. In 2007, 24 plants were audited
for compliance with company policies and
procedures. In this process, plants are notified of areas needing improvement and
are required to develop appropriate remediation plans. Progress against the plan is
communicated quarterly to the corporate
EH&S staff, which provides ongoing assistance and support to ensure improvements
are made. We expect 40 plants to be audited in 2008 and an additional 50 plants
in 2009.
I nd us tr y Co llab o ratio n
goal is to reduce the amount of waste currently going to landfills or incinerators by
30% by 2013. In 2007, we began a milk
recycling program at selected plants,
whereby retailers may return products not
sold before their “sell by” dates. We work
with a third party who collects the product,
and then dries and uses it as protein in
animal feed. In addition, our WhiteWave
Foods headquarters in Broomfield, Colorado,
is working to become a zero waste facility.
These initiatives reduce waste that would
otherwise have gone to a landfill or into a
waste water treatment facility.
In 2009, we will be developing a
method of tracking our total tonnage sent to
landfills, incinerators and recycling operations. We have significant opportunities to
eliminate waste and find beneficial uses for
waste which we cannot eliminate. We are
taking steps to raise awareness about the
importance of reducing waste in our plants
and challenging our workforce to reduce,
reuse and recycle.
Environmental Management
Syst em
Our goal is to exceed minimum expectations
set by local, state, and federal environmental laws and regulations. To further this
goal, we support our local Environmental,
Health and Safety (EH&S) teams in their
environmental performance management
through environmental policies, procedures
and auditing programs overseen by our
Vice President, Environmental, Health and
Safety. Our corporate and regional EH&S
staff meet for quarterly meetings to share
best practices and develop company-wide
programs.
In 2006, the Environmental Protection
Agency (EPA) conducted seven audits resulting in $2,800 in penalty citations; in
2007, there were eight audits resulting in
$7,500 in penalty citations. We have not
tracked local and state environmental audits or inspections in the past, but we plan
to begin collecting this data for 2009.
While all of our environmental compliance efforts are important to our business,
we believe the use of ammonia, which
poses significant health risks if improperly
released, in our refrigeration systems across
the country deserves special attention. Accordingly, we have developed customized
training programs on the safe use of ammonia in our business.
We use a common auditing program
across the company that is based on the
well-regarded Dakota Environmental
Auditing Plan. Each processing plant is
In the next decade, the food and agricultural
sectors (including dairy) will play an integral
part in efforts to reduce the amount of greenhouse gases emitted into the atmosphere.
The dairy industry’s most significant impact
is due to methane, a powerful GHG emitted
by dairy cows. We believe, as do other
industry participants, that there is great
opportunity to use that methane to generate
clean, renewable power for communities, our
own plants, and farmers.
In 2008, we invested in a partnership
and began development of an anaerobic
digester on the Big Sky Dairy farm in Idaho
and expect to be operational in 2009. The
anaerobic digester will capture methane
from animal waste which will then be converted into electricity. We expect to generate
more than one megawatt of renewable
“green” power, which is equivalent to the
annual electricity usage of approximately
650 homes. In addition, the digester will
produce a sanitary fiber by-product that can
be used as clean animal bedding or as soil
enhancement.
We also support and are participating
in a collaborative industry initiative started
by Dairy Management, Inc. (DMI) to focus
on creating a reliable and credible carbon
footprint of the industry; set carbon reduction
goals; and establish action plans to implement carbon reduction projects.
Corporate Responsibility Report | Page 21
Our Employees
At the end of 2007, Dean Foods had approximately 26,000 employees. The most
common job at Dean Foods is truck driving, followed by plant operation and maintenance. The majority of Dean Foods’ workforce is hired from the local community
at our manufacturing plants or distribution centers where we produce and distribute milk and other dairy-related products. We believe the health, safety and job
satisfaction of our employees are essential to our future success.
Our policies and procedures are designed to
retain a loyal and committed workforce, and
we historically experience very low turnover
at our facilities. As Dean Foods has grown
and acquired locally-owned, family-run businesses, we have worked to preserve the
local heritage and values, while providing
competitive benefits and compensation, as
well as additional resources, including training and support.
Em ployee Policies
We benchmark our compensation and benefits packages against other leading companies in our sector to ensure that we
remain competitive. We know that a comprehensive and affordable medical plan,
programs to improve employee and family
health, a 401(k) plan with a company
match, adoption and school tuition assistance, support for professional development, and a confidential program that
offers advice and support for employees
dealing with difficult issues are needed to
find and keep the best employees. We believe performance incentives help attract,
motivate and retain employees and, therefore, we use them as appropriate in certain
positions. In 2008, we began implementing a common performance management
system for exempt employees to ensure
Page 22 | Corporate Responsibility Report
that we develop managerial talent and a
deep bench for the future.
Em plo yee E ng ag em ent
We believe the best way to ensure the
success of Dean Foods today and in the
future is to have employees who are dedicated to the company and its shared objectives, believe the company supports
them, and know the company values the
work they do. As part of our efforts to determine levels of employee engagement,
we have engaged an external organization
to survey a segment of our employee population and benchmark against other
companies. We plan on expanding this
process over the next two years throughout our organization. The results of this
survey will be used to develop strategies
to promote employee engagement at all
levels of the organization.
Healt h and Safet y
We are committed to ensuring that our
employees have a healthy and safe work
environment. Each manufacturing facility
includes safety management and training
for higher-risk jobs. Safety precautions and
training for all employees is taken very seriously. Our products must adhere to the
highest quality standards and our workers
must follow the highest health and safety
standards. Proper attire, including hair
and beard nets, hard hats, safety glasses,
work shoes, lab coats and other standardized safety wear, is standard at all Dean
Foods facilities.
The majority of our jobs are physical
but not hazardous. For example, the loading
and unloading of product is often strenuous
work required of our drivers. Working conditions inside our plants can range from very
cold (working in ice cream freezers) to very
warm (working in storage warehouses).
Dean Foods tracks several safety key
performance indicators (KPIs) on a monthly
basis for employee safety. These are
tracked on a plant, regional, divisional and
company-wide basis. The two most significant KPIs are the Days Away (lost time)
rate and the DART (days away, restricted
and transferred) rate. These rates are
D iversity at D ean Food s
computed using OSHA protocols and are
used to monitor trends in safety performance. The Dean Foods 2007 Days Away
Rate was 2.3. The Dean Foods DART rate
was 5.7. (Note: This data does not include
our WhiteWave Foods locations.)
Diversity
We believe that a diverse, engaged workforce is a powerful competitive advantage
in today’s marketplace. We continue to
work hard to attract and retain a workforce that reflects the communities in
which we live and work. The breakdown
of our current workforce in terms of diversity
is shown in the table above and, regarding
overall demographics in the United States,
it tracks quite closely with all segments.
We recognize that we have a less-thanoptimal representation of women in our
workforce, and we are initiating programs,
including mentoring and training, targeted
to attract and retain more women throughout the company.
Each of the Dean Foods manufacturing plants has a separate Affirmative Action Plan (AAP) that includes specific goals
for the recruitment of women and minori-
(US Labor Force)
Dean Foods Employees
Female (46.4%)
16%
Male (53.6%)
84%
Asian / Pacific Islander (4.4%)
4%
African American (11.4%)
15%
Hispanic / Latino (13.3%)
15%
White (69.1%)
64%
Other (2.3%)
2%
Total
100%
ties in underutilized job groups. These
plans, which are updated annually in compliance with applicable federal law, also
include examples of outreach to attract
women, minorities, disabled workers, and
veterans for job opportunities. Our efforts
to broaden our employee base and expand
opportunities throughout the company include the implementation of a job posting
system that will serve both local and national hiring efforts.
Facilit y R at ionaliz atio n
Our marketplace is increasingly competitive, and we must continue our efforts to
optimize our manufacturing assets and become more efficient. As a result, we sometimes must make the difficult decision to
close a facility. We understand the impact
that closing a facility and losing a number
of jobs can have on a local economy. We
try to work with the local communities to
mitigate the effects of diminished tax revenues and job losses. We provide transition
support to our employees through severance and benefits packages which frequently include outplacement services and
support. Where possible, we look for other
internal opportunities within Dean Foods
through our new national database of open
positions. When closing any facility, we
show the utmost respect to our employees
and minimize the impact to our customers.
lective bargaining agreements at the end
of 2007. Most of the workers covered by
union contracts are employed in our manufacturing plants or in our distribution
system. The terms of these collective
bargaining agreements vary by location. All
jurisdictions in which we have employees
protect the right of freedom of association
and collective bargaining, and it is our policy to fully comply with such applicable
laws and regulations.
Lo oking A h ead
In the future, one of our key goals will be
to retain current employees while recruiting
the next generation of Dean Foods’ workers
and leaders. Attracting individuals from diverse backgrounds will be a key determinant of our future success. We have made
progress in enhancing our human resource
policies and practices, and our objectives
going forward include:
Be the employer of choice in the
communities where we do business;
Provide career paths across the
organization;
Continue to unify human resources
policies across all operations;
Improve our employee safety record;
Increase the recruitment of females
at all levels of the organization; and
Extend efforts to understand and
improve employee engagement.
Unio n Relat io ns
Approximately 38% of Dean Foods’ eligible
employees were covered by over 100 col-
Corporate Responsibility Report | Page 23
The Community
At Dean Foods, we believe that all business – no matter how large or small – can
play a vital and beneficial role in strengthening the social, economic and environmental conditions of a community. Dean Foods is committed to nurturing and
supporting the communities in which we do business. We do this by supporting
both national and local organizations at the corporate level, as well as through
our local facilities. We encourage volunteerism among our employees and provide
them with opportunities to actively support their local and global neighbors.
Focus Areas
In our communities, we have historically
focused our support in three areas:
Health, hunger and nutrition: We work to
expand nutrition education, encourage
healthy lifestyles, and combat hunger and
its devastating effects on our communities.
Environmental stewardship and conservation: We work to promote conservation
of natural resources, animal welfare, sustainable agriculture, renewable energy,
and the preservation of family farms.
Education and arts: We work to better
the lives of children through increased
access to education for the disadvantaged, educational programs for children
with disabilities, and academic research
and outreach programs that create economic opportunities for families. We also
support organizations that increase children’s access to the visual, literary and
performing arts.
These areas are of critical importance to our
customers, consumers, and the communities in which we operate. We recognize that
each of our businesses has the best sense
of the unique needs of its surrounding community. We encourage active community in-
Page 24 | Corporate Responsibility Report
volvement and support at a local level and
empower those businesses to address the
most pressing and relevant needs in their
local geographies.
Co rp orate G iving
At the corporate level, we provide financial
support to worthy organizations both nationally and in the Dallas area, home to our
headquarters. These philanthropic contributions are governed by a set of corporate giving guidelines, which are available on our
website at www.deanfoods.com. We are currently reviewing these guidelines to ensure
our corporate giving is having the greatest
possible impact in our communities. We accept written requests from 501(c)(3) organizations and hope to begin accepting online
applications in 2009. Some of our current
community partners include:
Feeding America (formerly America’s
Second Harvest) and the North Texas
Food Bank
Dean Foods LEAN (Lifestyle, Education
and Nutrition) Families Program at
Children’s Medical Center Dallas
Notre Dame School of Dallas
Students in Free Enterprise
Dallas Center for the Performing Arts and
Dallas Theater Center
Dallas Symphony Orchestra’s Young
Strings Program
American Red Cross
Locally, a number of our businesses support the Feeding America network and
other food banks, either by donating product or selling it deeply discounted. In
2007, our businesses donated more than
2 million pounds of food to more than 30
food banks in 20 states. Our businesses
also contribute financially to other local charitable organizations in their communities.
CA SE
STUDIES
Commu nity A f fairs Goes Local
Dean Foods’ WhiteWave division sponsors a
munities. Regionally, they partner with char-
than $12,000 has been donated to local
itable and non-profit organizations, including
schools in Georgia, Alabama and Tennessee.
schools, medical centers and fire departments.
Two examples of local programs follow:
Values-in-Action (VIA) program, which rewards
Meadow Gold Dairies in Salt Lake City,
Utah, supports the Utah Foster Care Founda-
employees with “VIA points” that are earned
Mayfield Dairy Farms’ Caps for Cash is a
tion which helps find, educate and nurture
doing community service and through partici-
simple and effective program that raises money
families to meet the needs of children in foster
pation in environmental initiatives. Employees
for local schools. Consumers collect Mayfield
care. Meadow Gold sells ice cream cones at
accumulate and track their VIA points on the
milk caps and give them to a participating stu-
discounted prices at community events and do-
company intranet and can exchange them for
dent or school. A group of local consumers, the
nates the proceeds to the Utah Foster Care
paid time off or other prizes. The intranet also
“Mayfield Moms,” collect the caps from school
Foundation. In the past two years, the company
includes information about general sustainabil-
coordinators at the end of each quarter and tally
raised more than $5,000 for the Foundation,
ity issues and specific company initiatives.
them up. Schools can earn up to $2,000 each,
while helping with public service advertising,
and the school from each system that collects
press conferences and promotional materials to
local dairies have long been
the most Mayfield caps receives an additional
raise awareness and encourage Utah families
active, concerned members of their local com-
$500. Since the program was launched, more
to participate in foster care.
Our WhiteWave division also actively
supports a number of organizations that
promote healthy, sustainable living.
Some of WhiteWave’s partners include:
matched their personal contributions dollar
for dollar. Our local businesses have played
important roles in relief efforts in their communities. In cases when the disaster directly affected an area where we have a
facility, we have responded first to the immediate needs of our employees, then to
the needs of the community by donating
product and, in some cases, logistical support including trucking and refrigeration.
Our network of processing facilities is able
to serve customer and consumer needs
should any one plant be affected by a catastrophic event, ensuring the availability of
safe and nutritious products.
vide opportunities for involvement. From
corporate office volunteer days to participation by our businesses in local fundraising
events, we encourage community action
among our employees.
Dean Foods’
Feeding America and Community
Food Share
World Soy Foundation, a program of the
World Initiative for Soy in Human Health
(WISHH)
Healthy Mothers Healthy Babies
Farm Aid
Disaster Relief
In addition to our ongoing philanthropic
partnerships, we’ve provided opportunities
for our employees to respond to natural and
other disasters through relationships with
major relief organizations, and have
Lo oking to th e Future
In the area of community relations, we expect to further integrate and coordinate our
efforts across our company. We realize that
having a clear, consistent and focused strategy for community investment will enable
us to have an even more positive impact on
the communities in which we operate.
Em p lo yee Vo lunt eeris m
We are proud that our employees are active
in their local communities, and work to pro-
Corporate Responsibility Report | Page 25
Governance and Ethics
We have designed our approach to governance and ethics to build and maintain the trust of our shareholders, employees, and other stakeholders. Our
governance structure aims to ensure that the company and its officers, directors,
and employees are held accountable for creating value in a responsible and
ethical manner.
Board Independence and
Operation
We believe the Board of Directors should
be a forceful advocate for ethical business
conduct and accountability to shareholders
and the communities in which we do business. Most of our Board members are independent, non-employee directors, in keeping
with New York Stock Exchange and Securities and Exchange Commission criteria. The
Board committees for Audit, Compensation,
and Governance are comprised solely of independent directors. Independent members
of the Board hold meetings on a regular
basis without management representation
to discuss specific issues and general
company business.
The Board of Directors has adopted a
set of Corporate Governance Principles that
include director qualification and continuing
education, as well as principles for operation of the Board. The Governance Committee’s responsibilities include ensuring that
these principles are applied and evaluating
possible conflicts of interest that may arise
from Board members and senior executives.
Diversity of Board members is sought in
terms of personal and professional background and other characteristics that provide
unique perspectives on our business.
Page 26 | Corporate Responsibility Report
Co d e of E th ics
Applying and upholding the highest ethical
standards is critical to the continued success of Dean Foods because it assures our
business partners that we are committed to
integrity in all transactions and interactions.
The Code provides the standards all
employees and directors are expected to
uphold. Our individual responsibilities to
one another, to consumers and customers, to shareholders, and to the communities in which we operate, are clearly
defined. In fact, compliance with the
Code is included in the performance
goals of corporate officers, senior executives and managers, ensuring that all are
indeed held to the same standard.
The Code of Ethics is available in
English and Spanish and may be found
on our website at www.deanfoods.com.
Communication and Education. There are
a number of mechanisms in place to ensure that the Code is widely distributed,
its content is understood and applied, and
suspected violations are reported. New
employees are provided with a printed
copy of the Code and are required to acknowledge receipt, certify understanding
and agree to abide by its content. Printed
copies are routinely distributed by local
Human Resources management, and
posters are hung throughout work areas
highlighting the Code. But no standard or
code can provide guidance for every potential workplace situation. That is why
the education component of our compliance program is so important.
The Dean Foods Company Ethics &
Compliance Training Center provides webbased education designed to enhance our
compliance program. Mandatory coursework is assigned according to primary job
In 2007, 4,802 non-hourly employees completed a total of 32,516
training modules focused on subjects ranging from our Code of Ethics
to matters of general business ethics and specific legal compliance.
On average, seven courses were completed by each employee that
reporting year.
function and level of responsibility, with a
high level of proficiency required to receive
completion credit within a designated
period of time. Exempt employees are
assigned training upon new hire and
promotion, and our active professional,
management, and executive personnel are
required to participate in ongoing semiannual compliance training periods.
Reporting Violations. Our employees are
charged with reporting all instances of suspected violation of the law or Company policy. Retaliation of any kind against those
who report violations is strictly prohibited
and grounds for dismissal.
In order to make the process less intimidating and ensure that all of our employees are afforded the same opportunity
to voice concerns, we established a tollfree Code of Ethics HelpLine available to
all employees. Calls are received and
recorded by an independent third party; a
written report is prepared by the receiving
operator of each call and forwarded to our
Chief Compliance Officer. Complaints are
then dispatched for investigation by the
appropriate investigating authority. All reports are investigated, and resolution of
each investigation is monitored and reported quarterly to the Audit Committee of
the Board of Directors.
Ass ess ing Risk
We regularly assess risks to our business
from a variety of perspectives. In our
Our Code of Ethics
2007 Annual Report, we disclosed a number of material risk factors. We have also
discussed the risk to our business associated with potential climate change in our
Climate Disclosure Project response. In
addition, in 2006, we conducted a comprehensive enterprise risk assessment
project. In this project, we evaluated a
number of risk factors in the following
areas: financial, personal injury or health,
legal and criminal, and reputational.
Go vernm ent Relat io ns
Given the nature of the dairy industry, almost
every aspect of Dean Foods’ business is regulated in one way or another by the government. We strongly believe this requires the
Company to maintain close contact with government representatives and agencies. Our
engagement takes place at the federal level,
as well as at the local and state levels.
We have significant contact with government offices and regulatory agencies at
each of our manufacturing facilities. It is
our practice to uphold the highest standards of ethical behavior as set forth in various laws and regulations, including the
Federal Electoral Commission guidelines.
Polit ical Co nt rib utio ns
Dean Foods has a political action committee (PAC) that is funded by voluntary contributions from employees. It is strictly
non-partisan and seeks to support those
government representatives, regardless
of party affiliation, that support positions
we consider important to our success.
Employees are not permitted under any
circumstances to provide gifts, cash
donations, or in-kind contributions to
government officials on behalf of Dean
Foods Company.
I nd us tr y Par t ners hips
Dean Foods is an active participant in a
number of industry associations and
trade groups, including the International
Dairy Foods Association, the Grocery
Manufacturers Association, the Organic
Trade Association, the National Association
of Manufacturers, and the Soyfoods Association of North America. We are committed to enhancing our effectiveness in
promoting solutions to issues of concern
within our industry.
provides the standards all employees and directors are expected to uphold. Our
individual responsibilities to one another, to consumers and customers, to shareholders, and to the communities
in which we operate, are clearly defined.
Corporate Responsibility Report | Page 27
Looking to the Future
Assembling
the contents and data included in this report was no small task. While working on the report, we established processes
and created databases that will help us continue to be more transparent as we report our social and environmental impacts in the future.
We are committed to publicly reporting on our performance in achieving our goals and key performance targets. Our intent is to report
on a regular basis (at least every two years) so that our stakeholders may assess our progress in addressing our most material environmental,
social, community, and governance issues.
As we continue our efforts to transform our company into a best-in-class food and beverage company, we will continue to develop our
CSR data management and reporting systems. We will embed our key environmental performance measures throughout our operations as we
strive to continuously improve our business. Our Environmental 2013 Roadmap, as summarized below, will become an integral part of our
overall business strategy.
E nvironmental 2013 Road map
Focus Area
Greenhouse
Gas Emissions
Water
Conservation
Solid Waste
Disposal
Strategic Approach
2013 Target
20% Reduction
Reduce
30% Reduction
Communicate to our employees the limits of carbon-based energy
the need across the organization to reduce energy costs and create an enduring
business model
Identify opportunities to use clean and renewable sources of energy
Reinforce
water consumption with training and investment in use of precision water
applications
Reuse water whenever possible without compromising product quality or plant sanitation
Reduce
plastic and paper waste by encouraging development of local and regional recycling opportunities
Reduce waste of all kinds with the development of specific recycling policies and procedures
Work with vendors to redesign packaging to reduce the environmental impacts
30% Reduction
We know that we still have much to do across our business. Our goal is to use our Environmental 2013 Roadmap to prepare realistic yet
ambitious plans to create value for all our stakeholders. As a leader in our industry, we know that we have both significant responsibilities and
opportunities – and we are excited to meet the challenges ahead.
Sincerely,
E arl M. “Chip” Jo nes, III
Senior Vice President
Corporate Responsibility and Sustainability
Page 28 | Corporate Responsibility Report
This report will be available to view on our website at www.deanfoods.com. Please consider the environment
before printing. To view the Global Reporting Initiative Index (GRI), please visit our website at www.deanfoods.com.