Running Head: Silk Milk an Alternative to Dairy

Silk Milk an Alternative to Dairy

Jennifer L. Travis
University of Central Oklahoma

Running Head: Silk Milk an Alternative to Dairy

Product History & Introduction
A company began in Boulder, Colorado in 1977 under the name of White Wave and the
goal of this company was to provide experimental plant based foods that included sausage,
hotdogs and much more (The Silk Story). The business was started by Steve Demos with funds
of $2000.00 (Why drink). The company had many loyal customers but did not get its big break
until 1978 when a supermarket brought White Wave products into their stores (Why drink.).
However, Silk would not be created until nearly twenty years later (Wallace, A.).When Silk was
first sold in stores it could be found in the refrigerated vegetable section. It was not until grocers
placed Silk next to the dairy milk that this alternative dairy product began to say move over dairy
(Why drink.). This new alternative to dairy milk would only continue to grow in popularity
over the next 15 years.
White Wave now not only produces Silk but many other well known name brands as
well. These name brands includes: Alpro, International Delight, Land O Lakes, Horizon Organic
(The Silk story). Alpro is owned by White Wave and produces similar products to Silk that are
organic, non-genetically modified and soy based foods in Europe (The Silk story). It almost
seems interestingly contradictory that a company who originally started out focused on plant
based foods and still has a major role in the industry also owns dairy. However, it is stated on the
White Wave website that the company is a pioneer in creating new alternatives and making those
alternatives mainstream (White Wave). This statement does make sense considering organic
dairy milk has become mainstream within recent years.
Silk was operated and maintained solely by White Wave until 2002. White Wave caught
the eye of Dean Foods after Silk caused revenue to jump from $8 million to $135 million in a

Running Head: Silk Milk an Alternative to Dairy

five year period (Wallace, A.). Silk and White Wave foods were acquired by Dean Foods during
a time that led to the consolidation of the dairy industry (A proven past). Dean Food based out of
Dallas, Texas was reported to own 100 manufacturing plants in 2009 including all the labels
owned by White Wave (Barrett, R.). White Wave and Dean Foods even produce a couple of the
same name brand products that many of us may be familiar such as Trumoo and Land O Lakes
(A proven past). Dean Foods employs 19,000 employees and net sales for 2012 were 11.4 billion
(A proven past). Even though Dean is a dairy giant it would only reign over Silk for a short time.
In 2013 White Wave once again became a standalone company (Wallace, A.). Even
though White Wave has been considered the most valuable division of Dean both companies
agreed to the separation (Dieterich, C.). Chief executive officer of Dean Foods stated in a press
release "The separation of White Wave from Dean Foods continues to unlock significant
shareholder value and puts both companies on a path for future success in their respective
businesses." (A proven past). Blaine McPeak ,president of White Wave stated "(Dean Foods and
WhiteWave) had fundamentally different business strategies; we had different operating
structures" and further stated that the separation is The best opportunity to create value for the
shareholders( Wallace, A.). The separation of the two companies provides benefits and
challenges for the future of Silk.
Now that White Wave is a standalone company again they have an opportunity to gain
trust of old and new consumers. While under parent company Dean Foods, White Wave lost the
trust of many consumers after quietly changing their label on Silk milk from organic to natural
(Off Target). Silk removed the organic label from most of its products to ensure it could use only
U.S.-grown soybeans, said White Wave spokes woman (Griffin, G.). However, a front-page story
in the Chicago Tribune outlined a consumer survey that showed the public was unclear about the

Running Head: Silk Milk an Alternative to Dairy

difference between natural and organic labels and that some corporations, particularly Dean
Foods, were taking advantage of the confusion in the marketplace (Off Target).
After Silks decision not to exclusively use organic soybeans Earth Balance worked with
Whole Foods to create a soy milk that used only domestically grown organic soy beans that are
inspected by a third party for genetically modified ingredients (Griffin, G.). White Wave spokes
woman further stated that using all domestic and organic soybeans would have caused price
increases and further added that (Silk) sell three times as much organic soy milk as all of our
competitors combined."( Griffin, G.). Silk/Dean did quietly change their labels, but Target stores
did not help the matter when they nationally advertised Silk milk with the term organic on the
carton in 2009 (Off Target). Silk may have felt that keeping prices low was a priority to keep
customers and value. On the other hand, Silk customers felt they could trust the integrity of this
corporation who produced organic products and probably felt betrayed when they found out
otherwise.
Unfortunately, Silk gave a competitive advantage to the upcoming soy milk producer
Earth Balance who also owns Smart Balance (About us).In 2010 Earth Balance produced the soy
milk following all of Whole Foods requests and was placed next to or above Silk (Griffin, G.).
Interestingly enough Earth Balance is also based out of Boulder, Colorado (About us). When
consumers are comparing the two brands it is likely that the location may play a role in the
purchase and the reputation of the company. At this point Silk is at a disadvantage for selling soy
milk when compared to Earth Balance who has a clean reputation. However, Silk Almond milk
is now the star in the companys portfolio matrix. It seems everyone is going nuts for nuts!
Almond is creating quite a stir, with Silk's Pure Almond milk outselling Silk's Soymilk at
supermarkets and mass-market retailers for the first time (Cutruzzula, Kara). The company says

Running Head: Silk Milk an Alternative to Dairy

it now has 75 percent of the soy milk market and 52 percent of sales for almond milk, amid
growing competition from such brands as Blue Diamonds Almond Breeze and from private
labels (Bloomberg). Silk Original Pure Almond milk has "60 calories per serving," is "rich in
antioxidants," and is "lactose-free and soy-free," according to the label (The Silk story). What is
not to like about the alternative? Which can help explain retail sales of dairy alternatives made
from almonds, rice, and coconut milk in the U.S. are now nearly $1.4 billion and are expected to
reach $1.7 billion by 2016(Wong, V.). Silk may have lost some soy milk customers, but has an
excellent opportunity to gain and maintain nut milk customer from here on out if they play their
cards right.
Consumers today want to know that corporations are socially responsible. Silk has great
corporate responsibility including providing recycling, local water restoration and has partnered
with several organization who promote the well being of the environment (The Silk story). It is
in Silks best interest with hold excellent corporate social responsibility not only because it is
ethical, but also because consumers who chose to be informed about their food are likely to be
informed about the companies they are buying it from. Silk should avoid any
miscommunications with the public in the future in order to avoid losing customers and to
maintain trust and integrity as a standalone company.
Overall, it appears Silk is a successful company who has only had a minor rough patch in
the past while under the management of a major parent company. The business has many
opportunities for success in the future including the new growing market of almond and coconut
milk. Within the last year president of White Wave Foods said One of the biggest near-term
challenges consists of supply chain pressures and McPeak further stated We continue to be
very aggressive in investing in both capital and people resources and continue to expand our

Running Head: Silk Milk an Alternative to Dairy

manufacturing and our warehousing" (Wallace, A.). As Silk continues to grow the company will
face new challenges on how to make the company successful while providing value to their
customers.

Running Head: Silk Milk an Alternative to Dairy

Brand Development
The first challenge to take into consideration would be the issue addressed by the
president of White Wave, supply chain management. The sale of the product relies on the supply
chain; therefore it is crucial for Silk to find the most efficient and cost effective route to get
customers the product. Obviously, White Wave is at a disadvantage at this point and time due to
the loss of resources during the split with their parent company Dean Foods. One of the best
options however, would be supply chain integration. White Wave foods could ship all of their
labels on the same route and ensure that as many products leave and arrive together as possible.
The plan would decrease trips in return would save time and money for the company.
Now that White Wave is a standalone company again they have an opportunity to really
define who and what they are and this could be started by reinventing the Silk brand. The
packaging would be one of the first steps to beginning a new Silk brand. The current packaging
performs all of the functions necessary, but it could use some defining traits. After much research
on the alternative milk selection it became evident that many of the current alternative milk
cartons are a shade of blue including Silk. It also seems that alternative milk options also come
only in a half gallon size (excluding single serve sizes).
After careful consideration of color themes green was not an option for this redesign.
After all this company wants to be original and not chose green simply because it sells to health
conscious consumers (Lamb, P.166). The packaging colors should reflect fun, bright and cheery,
but not retro or too edgy. The colors would include golden yellow and other neutral colors. The
taste of Silk milk is not boring, so why should their theme be? The idea would be make this
healthy product fun and create a design to reflect a fun, healthy lifestyle with more options and
without losing flavor.

Running Head: Silk Milk an Alternative to Dairy

The half gallon carton serves it purpose for holding and protecting the product and Silk
has even implemented carton recycling programs. However, the half gallon size is not a one size
fits all. Large families may feel discouraged from purchasing Silk due to the amount of half
gallons that would have to be purchased in comparison to gallons of dairy milk. Also, single
individuals may feel discouraged from purchasing the product due to the large size of a half
gallon in comparison to the size of a quart of dairy milk. It is true that Silk is good until the date
stamped on the carton, but freshness is only guaranteed 7 10 days after opening the carton (The
Silk story). Customers should be given more options to accommodate for their lifestyles.
Advertising for Silk at this time sends the basic message of Silk tastes good and it is good
for you with a little almond plant doing most of the convincing. Even though Silk is not a new
product the company could benefit from pioneering advertising. Silk Almond milk is fairly new
on the market and many people are possibly waiting to be more informed on why they should try
it. It may be natural for Silk to want to use competitive advertising with dairy milk, but
considering White Wave owns dairy lines this type of advertising should be approached
delicately. However, it would be appropriate for Silk to use comparative advertising with dairy
milk. Using this approach indirectly could simply be viewed as helping the consumer make the
right decision for his or her household.
The re-launch of the product would be the perfect opportunity to inform the public about
the Silk brand. People enjoy hearing good things about corporate social responsibility and made
in America products. The advertising after the re-launch could feature the actual employees at
Silk with a focus on how Silk operates as a company including their recycling, water
conservation and commitment to only buying American grown GMO free soy beans. Silk could
also create informative commercials about alternative milk.

Running Head: Silk Milk an Alternative to Dairy

Another factor to be taken into consideration is the price of Silk in comparison with dairy
and milk alternative competitors. Silk is more expensive and could hinder those on tight budgets
from even giving the product a try. Considering the recent split between White Wave and Dean,
now is probably not the time to lower the price of the product. It is more important for White
Wave to establish the proper warehouses and resources to operate efficiently before taking any
hits on revenue. In order to get price buyers to try Silk the company should feature a sales
promotion with coupons attached to the packaging and internet coupons. Hopefully, these
consumers will feel the product provides enough value to not hold price as an object.
Originally, Silks target market was health food consumers, but today plant-based milk is
becoming mainstream (White Wave). Silk should be targeting almost everyone with the
exception of pregnant women and children. Pregnant women and children may not be the best
target market for Silk considering it is stated on Silks website that the physician should be
consulted before these two group use Silk products (The Silk story). It would seem to be a
contradiction if pregnant women and child were targeted after placing that statement on the
company website. Even though it clearly did not say that Silk products are not safe for these
groups.
For most this is a product that can fit into almost anyones life. One may be skeptical of
buying Silk because they do not want to buy Silk to drink in addition to dairy milk to cook with.
During the re-launch informative period an advertisement could inform consumers that Silk can
substitute dairy milk in recipes cup for cup and Silk flavors can customize recipes. Further ads
could include women who are searching for a calcium substitute and finds that Silk Almond milk
offers 50% more calcium than dairy.

Running Head: Silk Milk an Alternative to Dairy

Silk also has more to offer than just milk alternatives. The Silk brand extensions include
dairy-free yogurt, fruit and protein drinks and cold coffees, all of these would give opportunities
to recruit new customers. With all this company has to offer the possibilities are endless. The relaunch would also give an opportunity to give these products the same recognition. These brand
extensions are likely to bring more customers into trying other Silk products. For example,
someone may try the coffee and decide since they like Silk coffee they want to try Silk yogurt.
Silk is on to something good and it is even good for their customers. With or without this relaunch it appears that Silk will be around for awhile.

Running Head: Silk Milk an Alternative to Dairy

References
Why drink milk when you can drink almond milk. (2014). Retrieved from almondmilk.net:
http://almondmilk.net/silk-almond-milk/
Barrett, R. (2009). Dean foods acquires Wauskesh, De Pere milk processing plants. MilwaukeeWisconsin Journal Sentinel. Retrieved from
http://www.jsonline.com/business/42324437.html
Off Target. (2009). Retrieved from http://www.cornucopia.org:
http://www.cornucopia.org/2009/10/off-target-major-retailer-accused-of-organicimproprieties-state-and-federal-complaints-allege-mislabeling/
Cutruzzula, K. (2013). All hail almonds. Newsweek Global, 161(25), 1.
A proven past, a fortified future. (2014). Retrieved from http://www.deanfoods.com:
http://www.deanfoods.com/our-company/about-us/brief-history.aspx

Dieterich, C. (2012). WhiteWave Foods fails to excite IPO market. Wall Street Journal.
Retrieved from http://online.wsj.com/news/articles/

About us. (2014). Retrieved from http://earthbalancenatural.com/product/original-soymilk/

Griffin, G. (2010). Silk feeling a chill over its shelf space at Whole Foods. The Denver Post.
Retrieved from http://www.denverpost.com/ci_15906844

Running Head: Silk Milk an Alternative to Dairy

Lamb, C., Hair, J. & McDaniel, C. (2012). MKTG. Mason, OH: South Western, Cengage
Learning.

The Silk Story. (2014). Retrieved from http://silk.com/our-story

Wallace, A. (2013). Dean Foods completes spinoff of Broomfields White Wave Foods. The
Denver Post. Retrieved from http://www.denverpost.com/business/ci_23309435/deanfoods-completes-spinoff-broomfields-whitewave-foods

The WhiteWave Foods company announces pricing of initial public offering. (2014). Retrieved
from http://www.whitewave.com: http://www.whitewave.com/investors/press-releases

Wong, V. (2013). Soy milk fades as Americans opt for drinkable almonds. Retrieved from
http://www.businessweek.com/articles/2013-08-21/soy-milk-fades-as-americans-opt-fordrinkable-almonds