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Author: TMFGebinr Big gold star, 5000 posts Top Recommended Fools Old School Fool Supernova Phoenix 1
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Subject: Re: Buying Dean Foods Date: 12/22/2010 11:19 AM
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Hi tj,

How healthy is DF milk? ... My sense is that mainstream doctors and their official organizations (as opposed to individual renegades) are very cautious about the whole issue of supporting organic food

Dean Foods has a whole division (Alpro, I think the name is) devoted to organic and soy milk (pretty sure they put the soy stuff into that division). And it is growing strongly.

I've never purchased Dean Foods milk, but a colleague here has and he says it tastes better. How healthy is it? Probably no more or no less healthy than house-brand milk. My colleague says that Dean Foods, at least the brand he tried, uses a different color container to protect the milk from the effects of light. Is that necessary or a marketing tool? I don't know.

I think the reason that doctors have been so reluctant to support organic food is many-fold. First, I'm pretty sure there's been no real scientific study (randomized, double-blind) on the differences between organic and "regular" food. It's mostly been anecdotal evidence, which isn't very reliable given the human propensity for selective memory.

Second, there are a whole bunch of other factors affecting a person's health that isolating organic food as a key factor is really difficult.

Third, not everything labeled and sold as "organic" is "better" than regular food.

Another point: I'm reasonably certain that bovine growth hormone (used to increase production of milk) has been used for years and years with no measurable problem in humans attributable to its use.


What would change the loss leader use of milk?

Grocery store economics, if anything. In the last earnings conference call, management said that if grocery stores knew then what they knew now, they would not have gone down that path (or words to that effect). Backing out is going to be difficult as consumers will be resistant to increases, but I've heard rumbles that oil is supposed to continue increasing in price through 2011 and that can certainly be used as an excuse to back out of the loss leader situation. (You may have already noticed that December gasoline prices are pretty high, even though winter is traditionally a low-price season.) It's going to take a while, though. Just as the price came down over the course of a year or more, it's going to take time to bring it back up toward previous levels.

Cheers,
Jim
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