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Starbucks Taking Aim at Milk Is Latest Blow to Beaten-up Dairy

Laura Yin and Olivia Rockeman
Starbucks Taking Aim at Milk Is Latest Blow to Beaten-up Dairy

(Bloomberg) -- The latest blow to the downtrodden dairy industry was delivered by none other than Starbucks Corp., with the coffee giant looking to condition customers to use milk alternatives in a bid to reduce its carbon footprint.

While Starbucks accounts for just 0.3% of U.S. milk production, the decision to formally declare an emphasis on non-dairy options may encourage other food-service outlets to follow suit. That could add momentum to the shift toward oat, nut, soy and other alternative beverages for health and environmental reasons. American cow-milk consumption has fallen about 2% each year since the 1970’s, according to the U.S. Department of Agriculture.

It’s a trend that has helped put plenty of American dairy farmers out of business and led to two big U.S. processors -- Dean Foods Co. and Borden Dairy Co. -- into bankruptcy. Dean is one of Starbucks’ key suppliers, data compiled by Bloomberg show.

Marketing group Dairy Management Inc. said that while it shares Starbucks’ commitment to sustainability, the industry’s environmental footprint is small and shrinking due to innovative farm practices and new technologies. “Both plants and animals play a critical role in the health of the people and the planet,” the group said.

(Adds comment from dairy industry in fourth paragraph)

--With assistance from Mike Dorning.

To contact the reporters on this story: Laura Yin in Seattle at yyin26@bloomberg.net;Olivia Rockeman in New York at orockeman1@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Millie Munshi

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