Danone is meeting with organic dairy leaders in New England and New York this week as efforts to prevent 89 dairy farms from losing their contracts intensify.

Ed Maltby, executive director of the Northeast Organic Dairy Producers Alliance, confirmed that a virtual meeting will take place between the company and organic dairy executives, but he did not go into details on what would be discussed.

The reunion will take place months after Danone, owner of the Horizon Organic label, announced it was abandoning 89 growers in New England and eastern New York, citing growing transportation challenges and operating.

The heat is on

State farm leaders in the region have started discussions on how to help save affected farms. And just last week, a group of 11 regional organic farming and consumer groups filed a complaint with B Lab, which sets the standard for national B Corporations, asking it to investigate Danone for having violates the core values ​​of the B Corp community.

“Danone NA’s decision to abruptly end contracts with an entire region of the United States affecting 89 family farms was based solely on maximizing profits, regardless of the devastating consequences for their suppliers’ families and rural communities,” indicates the complaint. “This action ignores the decades of corporate profits derived from the work of these independent dairy farms and the reputational benefits they have helped the company earn from consumers. This abrupt action directly violates a commitment to conduct business as if people and place matter. It also violates Danone NA’s corporate statement to aspire to do no harm and to enjoy all of its products, practices and benefits. “

Stripping Danone of its B Corp status. would be potentially damaging to the company’s reputation. But the US Chamber of Commerce notes that B companies do not enjoy special tax benefits under the US tax code.

What is a B company?

According to the United States Chamber of Commerce, a B Corp. is a for-profit company driven by both mission and profit. Shareholders hold the company responsible for producing financial profit, as well as some kind of public benefit.

Companies registered as B Corp. must achieve a minimum score on the B Impact assessment. This assessment is an assessment of the effect of the business on its workers, customers, the community and the environment.

Organic farming groups have also activated a live petition submitting signatures every two weeks to B Lab.

Complicated story

Horizon Organic and Danone have a complicated history in New England. Horizon, operating as an independent company, purchased The Organic Cow brand from HP Hood Co. of Massachusetts in 1999. According to Food Ingredients Online, The Organic Cow was the first large organic dairy in New England to sell milk, ice cream, cottage cheese, sour cream and butter.

Horizon was acquired by Dean Foods in 2004 and became part of the WhiteWave spin-off in the mid-2010s.

Danone, meanwhile, entered the New England scene when it bought Stonyfield Organic in New Hampshire in 2001, but then sold Stonyfield when it decided to buy the much larger WhiteWave, in 2017.

Lactalis, the world’s second largest dairy company, has since acquired Stonyfield, and Danone still owns Horizon. Another complication, says Maltby, is that the Organic Valley / CROPP cooperative provides 80% of the liquid milk that Stonyfield uses for its yogurt. The rest comes from limited direct contracts that Stonyfield has with producers.

Stonyfield announced in October that he was looking to bring in Horizon dairies, but nothing was set in stone. It remains to be seen if Stonyfield will keep his promise. So in essence, the Organic Valley / CROPP cooperative would be the only option for organic dairy farmers looking for a buyer, unless something changes by August.

Lack of dairy infrastructure

Ultimately, Maltby says the long-term goal is to secure a long-term biological fluid contract with an existing plant, or to build a new organic milk plant probably in the capital region of the United States. New York State.

Most of the existing factories that do organic, he says, are already at full capacity and no longer accept liquid milk.

A new, state-of-the-art factory, he says, would cost around $ 50 million to build and likely would have to be built in the New York State Capital area to accommodate long truck trips in areas more remote Vermont. , New Hampshire and Maine.

Another problem is balancing, says Maltby. If there is a surplus of organic fluid milk on the market at any given time, the plant will need to be self-sufficient enough to take that surplus milk and sell it for grated cheese, powder or some other product, because once it is sold in the conventional market, the price drops, sometimes even lower than Class IV prices, he says.