At Dean Foods, we have always been committed to doing business

At Dean Foods, we have always been committed to doing business responsibly. We believe this duty extends to protectingour 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

Corporate Responsibility Report | Page 1

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,

Gregg L. Engles

Chairman of the Board and Chief Executive Officer

Dean Foods Company

Page 2 | Corporate Responsibility Report

Welcome to our first comprehensive Corporate ResponsibilityReport. In April 2008, we published a Corporate ResponsibilityUpdate in which we publicly discussed our preliminary corporateresponsibility efforts and plans. This report provides more tangibledata concerning our environmental and social impacts and greaterspecificity regarding our plans.

As the largest processor and distributor of milk and dairy-related products in the United States, we are committed toresponsibly managing our social, environmental, marketplace, andcommunity impacts. This report is intended to provide stakeholderswith an updated and more focused perspective on our corporateresponsibility programs and policies. We expect that future reportswill contain more complete and in-depth data as we develop ourreporting systems and prioritize and further develop the individualelements of our corporate responsibility program.

Scope and Repor t ing Year

This report covers the activities of Dean Foods Company, aDelaware corporation, and its wholly-owned subsidiaries. All of ouroperations are located in the United States, with the exception ofone facility in the United Kingdom. We do not publicly report onsuppliers, family farms or entities in which we have a minorityownership position.

The information contained in this report includes benchmarkdata from 2007 to the extent available and certain current or anec-dotal data from 2008.

The Issues Covered – Material i ty Process

We operate a large number of manufacturing facilities and a sub-stantial distribution fleet. As a result, our operations have numeroussocial, community and environmental impacts. In line with the prin-ciples of the Global Reporting Initiative (GRI) and with the help ofBusiness for Social Responsibility (BSR), we undertook a material-ity process to identify those issues that most significantly impactour business success and influence the perspectives and decisionsof our key stakeholders, and over which we have a reasonablelevel of control.

For each of the topics covered in this report, we worked withBSR to provide a clear view of why these issues are important, ourmanagement approach (principles and policies), our key activities toaddress these issues, and the indicators we use (or plan to use) tomeasure our performance.

Information and Data

We have endeavored to provide data and information on our corpo-rate 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 thelocal operating level. As a result, many of our systems for collectingand reporting data, including data regarding social and environmen-tal performance, are still being developed. We intend to expand theamount of information we report and improve data integrity over thecoming years. The information presented in this report has beencollected and verified in accordance with our internal standards,and we believe it provides an accurate representation of our per-formance and activities.

About This Report

As the largest processor and distributor of milk and dairy-related products in the United States, we arecommitted 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

Dean Foods Company Prof i le 5Dean Foods and Corporate Responsibi l i ty 8Product Stewardship 10Responsible Sourcing 12The Environment 16Our Employees 22The Community 24Governance and Ethics 26Looking to the Future 28



We are the largest processor and distributor of dairyproducts in the United States. We have achieved this positionthrough a series of acquisitions that have helped transform andmodernize the American dairy industry. Our principal product offer-ings are milk and other dairy-related items, including creams andcreamers, cottage cheese, yogurt, sour cream and ice cream,soymilk and other soy-based products.

Our History and Strategy

Dairy processing in the United States has historically been a localindustry serving local markets, due to the expense of transportingmilk and its highly perishable nature. With cold storage and refriger-ated transportation, dairy processing has become more regional,but the industry remained fragmented with excess capacity. Thestrategic premise of the formation and growth of our company wasthat, by consolidating this fragmented industry, we could achievegreater economies of scale, become more efficient, and better servethe needs of a consolidating base of retail customers.

We began acquiring local and regional dairy operations in 1993.Between 1993 and 2000, operating as Suiza Foods Corporation, wecompleted more than 40 acquisitions and became the largest fluidmilk processor in the United States. In 2001, we acquired DeanFoods Company, then the second largest fluid milk company in theUnited States, and assumed its name for the combined entity.The combined Dean Foods Company has continued to acquire localand regional dairies, and we have added national brands such asHorizon Organic® and Silk® to our portfolio. Today, Dean FoodsCompany accounts for approximately 35% of total milk sales in theUnited States.

Notwithstanding our size, our company is still evolving as wecontinue our efforts to transform Dean Foods into a focused, best-in-class food and beverage company. While we have achieved mean-ingful economies of scale to date, our future success will require thatwe continue to reduce costs and improve our manufacturing and dis-tribution operations systemically across the company. We must alsodeliver more innovation to the dairy case, providing consumers withdifferentiated, value-added products to stem the decline in per capitamilk consumption.

1925 Samuel E. Dean Sr. pur-chases the Pecatonica MarketingCompany, an evaporated milkprocessing facility located in north-western Illinois.

1927 Company changes nameto Dean Evaporated Milk Company.Additional Illinois dairy plants arepurchased.

1929 Company changes nameto Dean Milk Company.

1981 After acquisitions ofseveral dairies nationwide, DeanFoods Company is listed on the NewYork Stock Exchange under thesymbol “DF.”

1993 Recognizing an opportu-nity to consolidate the highly frag-mented dairy industry, Suiza Foods’founders make their first dairyacquisition with the purchase ofSuiza Dairy in San Juan, Puerto Rico.Additional local and regional dairyacquisitions follow.

1997 Suiza Foods is listed onthe New York Stock Exchange underthe symbol “SZA.” Suiza Foodsmerges with The Morningstar Group,Inc., expanding Suiza’s branded andvalue-added product line.

2000 After more than 40 dairyacquisitions, Suiza Foods Corporationbecomes the nation’s largest dairyprocessor and distributor.

2001 Suiza Foods Corpora-tion’s acquisition of Dean FoodsCompany is complete. Suiza changesits name to Dean Foods Companyand its ticker symbol on the NYSEchanges from "SZA" to “DF.” Thecombined company’s headquartersis located in Dallas, Texas.

2002 Dean Foods acquiresBoulder, Colorado-based White Wave,Inc., maker of Silk, the nation’sleading refrigerated soymilk.

2004 Dean Foods acquiresHorizon Organic® Holding Corpora-tion, maker of a full line of organicmilk and dairy products.

2004 Dean Foods consolidatesSilk, Horizon Organic and otherbranded businesses as WhiteWaveFoods Company, headquartered inBroomfield, Colorado.

2005 Dean Foods spins offDean Specialty Foods Group, whichincludes pickles, dips, dressings andfoodservice products, as TreeHouseFoods (NYSE: THS).

2006 Standard & Poor’sannounces that Dean Foods will beadded to the S&P 500 Index.

Dean Foods Company Profile

D E A N F O O D S C O R P O R A T E H I S T O R Y


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.

What We Do

We purchase agricultural inputs – the mostsignificant being raw milk – and processthem into consumer products, then transportthem for final sale to a wide variety ofoutlets. The conventional raw milk that wepurchase comes from approximately 12,000dairy farmers across the United States. Ourorganic raw milk is supplied from almost500 organic family farms and from two

organic farms that we own and operate.We have more than 100 manufac-

turing facilities located in 36 states andone manufacturing facility in the UnitedKingdom. Our products are distributed toa wide variety of outlets, including groceryand mass merchandise retailers, hotels,restaurants, convenience stores, schools,hospitals and other institutions, viaapproximately 6,500 different deliveryroutes that service more than 150,000

locations. Our extensive network of refriger-ated transportation vehicles is one of thelargest in the country. We operate over4,700 refrigerated trucks, 2,600 tractorsand 6,000 refrigerated trailers. At year-end2007, we had approximately 26,000 em-ployees, the majority of whom are involvedin our manufacturing and distributionoperations.

How We Are Structured

We are organized into two business divi-sions that reflect the distinct supply chainsand characteristics of our different productcategories. Our DSD Dairy (Direct StoreDelivery) segment includes the majority ofour manufacturing facilities and primarilyinvolves highly perishable products that re-quire “direct” delivery to customers’ storesin refrigerated trucks or trailers. OurWhiteWave-Morningstar segment manu-factures and sells products with more ex-tended shelf lives that are typically deliveredto customer warehouses through third-partytransporters or distributors.

Our Products and Brands

Through the DSD Dairy and WhiteWave-Morningstar platforms, we sell a wide vari-ety of dairy and soy-based products,including conventional and organic milk,ice cream, soymilk and other cultured soyproducts, half-and-half, whipping cream,yogurt, cottage cheese, sour cream, butterand coffee creamers. We also sell a smallamount of non-dairy and non-soy products,including fruit juices, iced tea and water.

Our products are sold under well-knownlocal, regional and national brands andnumerous private labels. Our national brandsinclude Horizon Organic, Silk, InternationalDelight® and LAND O’LAKES®, which we


use under a license from Land O’ Lakes,Inc., a Minnesota dairy cooperative. Our fivelargest regional brands are Dean's®, Gare-lick Farms®, Country Fresh®, Alta Dena®

and Mayfield®. In addition, we sell a signif-icant portion of our products under privatelabel or “store” brands of major retailers.For a list of our brands, please visit ourwebsite at www.deanfoods.com.

Our Customers and Suppl iers

Our largest customers are major retailerswho account for well over half of our sales,followed by food service providers (hotels,restaurants, etc.) and convenience stores.The primary inputs utilized in producingour products are conventional and organicraw milk, natural or organic soybeans, con-ventional and organic sugar, flavorings,juice concentrates, palm oil, and resin (tomake plastic bottles). Our primary supplier

of conventional raw milk is Dairy Farmersof America (DFA), which is the largest dairycooperative in the United States. We pur-chase the balance of our conventional milkand most of our organic milk from otherdairy cooperatives and independent familyfarmers. Resin is typically purchasedthrough Consolidated Container Holdings,LLC, in which we own a 25% minority in-terest. For the remaining inputs, we do notrely heavily on any single supplier.

Geographic Reach

Dean Foods’ dairy processing plants anddistribution system are located and operatein every region of the country except thePacific Northwest. Our products are sold inall major urban centers. The principal exec-utive and administrative offices of DeanFoods are located in Dallas, Texas.

A B O U T R A W M I L K

Raw Milk Pricing

The dairy industry has a long history

of government regulation intended

to stabilize pay prices to dairy farm-

ers. Federal milk marketing orders

(FMMO) established by the Secre-

tary of Agriculture specify minimum

prices to ensure orderly marketing of

raw milk from the farmer (producer)

to the processor. The federal govern-

ment’s minimum prices are calcu-

lated monthly based on supply and

demand. The prices vary depending

on the processor’s geographic loca-

tion 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 ex-

ceptional 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 bev-

erage) 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 – Key Financial Per formance Data(Dollars in thousands – except share data) 2006 2007

Net Sales 10,098,555 11,821,903Net Earnings 225,414 131,353Income Taxes 175,450 84,007Free Cash Flow 324,310 108,802Long-Term Debt 3,355.851 5,272,351Earnings Per Share $1.68 $1.01

Dean Foods Processing Faci l i t ies


Dean Foods and Corporate Responsibility

Our Approach to CorporateResponsibi l i ty

As a large processor and distributor ofdairy and dairy-related products, we un-derstand that our operations have bothpositive and negative environmental andsocial impacts. We are committed to man-aging these impacts in a responsible wayand communicating our goals andprogress. We know this is the expectationof all our stakeholders, including our em-ployees, shareholders, customers, con-sumers, suppliers and vendors. A criticalaspect of managing our impacts is toprioritize those that are most significant.We have done this through a materialityanalysis through which we ranked issuesaccording to their importance to ourstakeholders and our business success.The most material issues identified throughthis analysis are addressed in the remain-der of this report.

Because our company has grownthrough multiple acquisitions, we havemany disparate plant configurations andprocesses. Implementing a comprehensivecorporate responsibility program requires usto analyze each of our facilities across thecountry. We are in the process of doing thatdifficult work – collecting information, identi-fying areas that need improvement and

sharing best practices across our company.Over the coming years, we expect to im-prove processes for consolidating informa-tion and implementing standards in manyareas, including corporate responsibility.

Our successful implementation of acorporate responsibility program will alsorequire that all our employees recognizethe importance of linking sound businessstrategies with social responsibility and en-vironmental stewardship.

How We Manage CorporateResponsibi l i ty

We have created an organizational struc-ture with clear lines of accountability tosupport the day-to-day management of cor-porate responsibility policies and programsand allow for the identification of emergingissues important to our stakeholders.

Board Accountability. The Senior VicePresident, Corporate Responsibility andSustainability, reports to the audit commit-tee of the Board of Directors on a regularbasis regarding our corporate responsibilityactivities. The audit committee overseesour work in the areas of corporate respon-sibility and sustainability, providing feed-back and input on corporate responsibilityefforts as needed.

Corporate responsibility covers a wide range of activities at Dean Foods, fromlocal volunteer initiatives to reducing our greenhouse gas emissions to improv-ing 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 ofchoice, a responsible vendor, a steward of the environment and a trusted part-ner in the community.

Management Structure. Our Senior VicePresident, Corporate Responsibility andSustainability, coordinates programs asso-ciated with our corporate responsibilityefforts, including cross-functional imple-mentation of policies. This senior executiveworks with key employees throughout theorganization who are helping us define andreach our CSR goals. For example, many ofour ethics and compliance activities areadministered by the HR organization andmany of our sustainability efforts requirethe experience of our Supply Chain experts,including our energy, environmental, andsafety professionals. WhiteWave Foods alsohas a Vice President, Responsible Liveli-hood, who concentrates on corporate re-sponsibility and sustainability programsacross its business.

Sustainability Advisory Group. We formedan advisory group to involve a number ofsenior executives from across the companyin our corporate responsibility efforts. Thegroup’s mission is to provide strategic guid-ance on the policy framework and pro-grams within the corporate responsibilityarea; review progress against sustainabilityobjectives; and provide a forum where envi-ronmental and social issues may be dis-cussed and decided.

Issues Management Working Group. Thiscross-functional team works together toidentify, prioritize and manage issues andtrends that are related to our corporatereputation and the interests of our stake-holders. The group ensures that the view-points of various constituencies are

appropriately considered, and that our cor-porate positions are communicated andapplied consistently across the company.

Third-Party Advocates. We work with anumber of industry and trade associationson both the local and national levels. Withorganizations such as the InternationalDairy Foods Association (IDFA), DairyManagement, Inc. (DMI), and GroceryManufacturers of America (GMA), we sup-port industry sustainability efforts andcampaigns to educate consumers and cus-tomers about our products and practices.We also support their efforts to have thevoice of the dairy industry heard by gov-ernment decision-makers.



Product Stewardship

The Natural Goodnessof Dairy

Dean Foods’ dairy products provide naturalhealth benefits. About 73 percent of thecalcium available in the food supply is pro-vided by milk and other dairy products.According to the United States SurgeonGeneral, the rise in bone deterioration (os-teoporosis) in the United States is directlylinked to a decline in the nutritional qualityof many Americans’ diets. Among theSurgeon General’s recommendations is theconsumption of calcium- and vitamin-richfoods, including dairy products. In additionto promoting bone health, several studies,including one recently published by theAmerican Heart Association, show that in-creasing dairy intake as part of a low-calorie, nutrient-rich diet could lead to asignificant reduction on overall chronic dis-ease risk. To find out more about thehealth benefits of our products, please visitour website at: http://www.deanfoods.com.

First and foremost, we are committed to helping people live better by providingthem with wholesome and nutritious food and beverage options. From traditionaldairy products such as milk, yogurt and cottage cheese, to alternatives like lactose-free milk, soymilk and organic milk, we sell products that help consumers livehealthy and nutritionally balanced lives. We are proud to be in the business ofsustaining healthy lifestyles through the lasting benefits of our dairy case products.

About 73 percent of thecalcium available in the foodsupply is provided by milkand other dairy products.


Bringing Soyinto the Mainstream

We sell a full line of Silk soy products, in-cluding plain and flavored soymilk, en-hanced and light soymilk, soy creamersand soy yogurts. According to the U.S.Food and Drug Administration, a diet lowin saturated fat and cholesterol that in-cludes 25 grams of soy protein a day mayreduce the risk of heart disease. Soy pro-tein may also help to promote bone health,alleviate symptoms of menopause and re-duce the risk of certain types of cancer.These benefits have been found only fromwhole soy products and not from highlyprocessed soy isoflavones. We use wholesoybeans in the manufacture of our prod-ucts, ensuring the maximum benefits ofsoy. To find out more about the benefits ofsoy, please visit the Silk website atwww.silksoymilk.com.

Nutri t ional Education

Consumers are becoming increasingly con-cerned with nutrition and product content.We work continuously to advance nutritionaleducation and promote healthy choices.To help consumers, we post nutritionalinformation on our corporate and brandwebsites and on many lines of packaging.We often include educational informationin our advertising and support scientificstudies to further our collective under-standing of nutrition.

We are actively engaged withMilkPEP®, the Milk Processor EducationProgram, which directs the national “gotmilk?”® campaign in the United States.MilkPEP is funded by the nation’s milk pro-ducers who are committed to increasingfluid milk consumption. Activities are led

by a 20-member board, which is monitoredby the U.S. Department of Agriculture’s(USDA) Agricultural Marketing Service.

We also take seriously our role in help-ing consumers better understand the healthbenefits of soy and encouraging them to in-troduce soy into their diets. For example,WhiteWave Foods supports the World SoyFoundation, a program of the World Initiativefor Soy in Human Health (WISHH). Foundedby U.S. soybean farmers, the World SoyFoundation (WSF) is a 501(c)(3) organiza-tion that works collaboratively with humani-tarian organizations, corporations, publicand private foundations, international organ-izations, U.S. and international govern-ments, and private individuals to deliver soyprotein and nutrition education to people indeveloping nations. The WSF works underthe auspices of WISHH.

Research and Development

In 2007, we introduced Horizon OrganicMilk Plus DHA Omega-3. DHA is anOmega-3 fatty acid that has been shown tosupport brain, eye and heart health throughevery stage of life. Our Silk Plus and HorizonOrganic Milk Plus DHA Omega-3 are bothfortified with life’sDHA®, a vegetarian and

sustainable source of DHA that does notuse fish oil and does no harm to our threat-ened aquaculture. In 2008, we will alsobegin to introduce DHA-fortified milk in cer-tain regions of the country under ourtrusted regional brands.

We recently established a Research andInnovation center in Broomfield, Colorado,and have been developing our capabilitiesin the areas of research and product devel-opment and innovation. With new capabili-ties and resources, we expect to be in aposition to find ways to improve our pack-aging and the taste, quality and nutritionalbenefits of our products. Our focus will beon improving the natural goodness of ourdairy and soy products with added nutri-tional benefits such as Omega-3s and pro-biotics. One of the new products to belaunched nationally will provide our con-

sumers with a line of fortified low-fat andfat-free milks. These products are designedto provide rich and creamy tastes of 2% orwhole milk with lower fat content. We willexplore other possible product extensions,as well as the introduction of new productsthat leverage our manufacturing and distri-bution systems.

Responsible Sourcing

Conventional Raw Milk

Our largest purchase is raw, unprocessedmilk. We source our conventional raw milkfrom approximately 12,000 dairy farmerslocated throughout the United States.Approximately 80% of our total purchasesof conventional raw milk are from dairycooperatives and the remaining 20% is

purchased from individual farmers.Over the past few years, many of our

consumers and retail customers have re-quested that we provide products made frommilk produced by dairy cows that are nottreated with the artificial growth hormonerbST (recombinant bovine somatotropin).The FDA has approved the commercial useof rbST in the U.S. and determined that no

significant difference can be shown in milkfrom cows treated with rbST and those notso treated. However, to meet the growing re-quests of consumers and retailers, last yearwe began to request that our dairy suppliersprovide us with raw milk from cows nottreated with rbST. Effective July 1, 2008,virtually all of our fluid milk is sourced fromcows not treated with rbST.

As the largest dairy processor in the United States, we have a significant impacton the food and agriculture value chain. Our first priority is to ensure superiorquality and safety of our products for our consumers. That duty requires that weunderstand where our inputs originate and how they are processed.


We have also taken the position that we willnot accept raw milk produced from clonedanimals. Numerous surveys have shownthat Americans are not inclined to buy dairyproducts that contain milk from clonedcows. Although the FDA has determinedthat meat and milk from cloned animals issafe for consumption, it has put in place avoluntary moratorium on the sale of theseproducts in the U.S. In the event that thismoratorium is lifted, we will implement ap-propriate procedures to ensure that the rawmilk we purchase is not from cloned cows.

We encourage the roughly 12,000 pro-ducers across the country that provide uswith raw milk to meet or exceed industryand federal standards for humane animaltreatment. Treating animals with respect andcompassion is part of every dairy farmer’sheritage. Farmers recognize that animalwell-being practices lead to the productionof high-quality, safe and wholesome milk.

We expect our farmers to providetheir animals with a nutritious diet; qualitymedical care; clean, healthy and comfort-able living conditions; sanitary milkingareas; and safe transportation. For more

information on our policies regardingtreatment of dairy animals, please refer tohttp://www.deanfoods.com.

Organic Farming

We sell a wide range of certified organicdairy products, such as plain and flavoredmilk, yogurt, ice cream and cheese, throughour Horizon Organic brand. HorizonOrganic uses only organic raw milk that issourced from almost 500 family farmsacross the United States. We source 85%of the raw organic milk from farmer partners

around the country and 15% from two or-ganic dairy farms that we own. Our goal isto share the practices and procedures onthe two farms that we own with the rest ofthe industry. Today, we work extensivelywith those family farmers who provide uswith milk to ensure organic standards aremet. In addition, we work directly withdairy farmers considering converting toorganic, helping them understand thebenefits of organic production and therequirements for certification.

The Horizon Organic brand has beena pioneer in setting standards and best

C A S E S T U D Y

Greening the Maryland 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 addi-

tion, the Maryland dairy worked with the state’s

Conservation Reserve Enhancement Program to

create a buffer area to increase wildlife habitat.

Other environmentally sound improve-

ments 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.


practices for organic farming. Horizon’sfounders played a key role in helping todevelop the National Organic Standardsand the USDA organic seal. The NationalOrganic Program (NOP) develops, im-plements and administers national pro-duction, handling and labeling standardsfor organic agricultural products. We haveworked to ensure that these standardsare set at the highest levels and arestrictly enforced.

We have also developed our own ad-ditional Standards of Care for the two or-ganic dairy farms we own and operate. OurHorizon Organic Standards of Care areguided by a number of core beliefs, fo-cused on providing holistic, preventativeand natural animal care and welfare, andmanaging pastures to improve the qualityof the soil, enhancing its ability to se-quester carbon and promoting the biodiver-sity and nutritional value of our crops. (Seehttp://www.horizonorganic.com/aboutus/press/2007_3_8.html for the HorizonOrganic Standards of Care.)

NNoonn--ddaaiirryy SSoouurrcciinngg.. Dean Foods alsopurchases non-dairy inputs for the manu-facture of our products. Our principal non-dairy inputs include organic and naturalsoybeans (used for the manufacture of ourSilk products), packaging materials (plasticbottles, plastic resins and paper board),and sugar, sweeteners and cocoa.

SSooyybbeeaannss.. We source more than 700,000bushels of organic and non-geneticallymodified (non-GMO) soybeans annually,farmed on more than 3,000 acres of farm-land. We currently source all of our soy-beans in North America and they aresubject to robust quality testing and evalu-ation protocols. We have partnered withConservation International to developsourcing guidelines, which will incorporatebest practices from farmers and vendorsthat share our values and commitment tosourcing soybeans that are produced in asustainable, socially responsible and ethi-cal manner.

PPaacckkaaggiinngg MMaatteerriiaallss.. We purchase ap-proximately 40% of our plastic bottles from

third-party U.S. suppliers, and we manu-facture the remaining 60% from plasticresins which we purchase. We purchaseour paper board (used to make cartons forour fluid milk and soymilk products) fromone or more North American suppliers.

SSuuggaarrss,, SSwweeeetteenneerrss,, CCooccooaass.. Oursugars, sweeteners and cocoas are sourcedprincipally from U.S. suppliers. Some ofthese suppliers depend on internationalmarkets for their inputs. For these productcategories we have begun to include overallsustainability standards in our procurementcriteria and supplier contracts. We recentlydeveloped our “Total Customer Satisfaction”criteria, including corporate responsibilitycriteria, and have begun to require that oursuppliers meet these requirements.

We are guided in our purchasing activities by the corporate responsibilityprinciples of the Institute for Supply Management (ISM). These principles setout requirements for supply chain partnersto adhere to regarding community, supplierdiversity, upstream and downstream envi-ronmental practices, ethics and human

Page 14 | Corporate Responsibility Report Corporate Responsibility Report | Page 15

rights. We are now incorporating thesenew strategic sourcing principles in pur-chasing contracts with our key suppliers.

Food Safety

We are committed to providing safe, qual-ity products that consumers trust. Themany local dairy companies that havebeen brought together to make up today’sDean Foods have been making qualitydairy products that families trust fordecades. The quality of our products andhealth of our consumers remain our firstand foremost responsibility.

All segments of the dairy industry, in-cluding milk producers, bulk milk trans-porters and milk processors, are required tobe certified by and comply with the provi-sions of the Grade A Pasteurized Milk Ordinance (PMO). The PMO requires theapplication of stringent sanitation measuresthroughout the production, handling andpasteurization of milk and milk products.

Our quality control procedures beginwith our raw milk. As tankers of raw milkare brought into our manufacturing plants,the milk is inspected and tested by our on-site labs to ensure that our quality stan-dards, as well as those mandated by

federal and state regulations, are met. Wehave adopted policies requiring that tankersof raw milk be sealed and arrive at our fa-cilities with accurate logs maintained andseals intact to protect against tampering.

In our plants, we rely on our regionalquality and safety experts to ensure thatfederal and state regulations for quality andsafety are met. Our finished products aretested and samples are retained to ensureproduct quality and stability for the dura-

tion of the product shelf life. Our facilitiesreceive routine internal and external qualityassurance and food safety assessments.

We have begun adoption of third-partyaudits that have been recognized by theGlobal Food Safety Initiative (GFSI). TheGFSI approach to measuring the effective-ness of a firm’s food safety and quality programs is in line with our customers’expectations. By year-end 2008, 90 of ourfacilities will have Level 2 certification and22 will have Level 3 certification by theGFSI-approved audit firm, Safe QualityFoods (SQF). Our objective during 2009 isto achieve Level 3 certification in all of ourfacilities, which is the highest qualificationa firm may receive.

For our organic products, we complywith stringent internal quality standards aswell as the requirements set forth in theNational Organic Program. We maintain or-ganic certification requirements and are in-spected by third-party auditors accreditedby the USDA.

Whenever one of our products poses aserious and immediate threat to consumerhealth, we initiate a recall of the productfrom the marketplace. In 2007, we imple-mented one such product recall. The recallwas the result of an undeclared allergen inan ice cream product. In response, we areimproving our processing technologies toensure that packaging and allergenic ingre-dients are appropriately managed. In2008, through September, we imple-mented one recall as the result of an unde-clared milk allergen in a soy product. Wealso initiate product withdrawals from timeto time when we learn that the quality of aproduct in the market does not meet ourstandards or expectations.

Our goal is to continuously improveour processes and ensure the highest qual-ity of all of our products. In 2008, we im-plemented a Quality Improvement Programthat is currently in the pilot phase in fiveplants. Our 2009 objective is to roll theprogram out to another twenty plantsacross the company.

Horizon Organic Producer Education (HOPE) program

Farmers are the backbone of our business. We have long supported American fam-

ily farms in their transition from conventional to organic farming. The HOPE pro-

gram 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.)


The Environment

We are proud of the wholesome, nutritious products that we manufacture and selland the vital role our products play in creating healthy lifestyles. At the sametime, we recognize that our operations have a significant impact on the environ-ment and we have a responsibility to manage that impact. With the escalatingconcerns surrounding climate change and ever-increasing demands on our limitednatural resources, this responsibility has never been greater.

Within this complex landscape, we have established our Environmental 2013Roadmap which prioritizes our efforts to reduce our impact on the environment inthree key areas – greenhouse gas emissions, water usage, and solid waste.1 2 3


Greenhouse Gas Emissions

We believe that there are opportunitiesthroughout the business to be more energy-efficient. We have set a goal to reduce ourcarbon footprint by 20% by 2013. We planto achieve this reduction through energy-efficiency initiatives, renewable energy investments, and industry collaborations.

In 2007, we compiled our first com-prehensive greenhouse gas inventory con-sistent with the principles and guidance ofthe World Resources Institute’s Green-house Gas Protocol. Since then, we have

submitted overall data for our 2006 and2007 emissions to the Carbon DisclosureProject (CDP) and facility-level data for ourCalifornia operations to the California ClimateAction Registry. We plan to continue providing data to the CDP. We will reportour 2009 carbon footprint to the ClimateRegistry in 2010.

For our initial footprint, we chose to in-clude emissions from operations that we op-erate and control. This includes the plantswe operate across the United States, thetrucks and trailers we operate nationwide,and the two organic dairy farms we own and

operate in Idaho and Maryland. We have notincluded (1) the upstream emissions associ-ated with agricultural inputs and the pack-aging or products provided to us bythird-party suppliers or (2) the downstreamemissions from third-party distributors andhaulers of our products or from the retailstores where our products are sold.

Our total calculated annual emissionsfor 2007 were approximately 1.6 millionmetric tons of CO2e (carbon dioxide equiv-alents), or 1.03 pounds per gallon of prod-uct produced. Our three largest sources ofgreenhouse 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 meas-uring and understanding our footprint, wehave set a target to reduce our carbonemissions by 20% per gallon of product by 2013.

PPllaanntt OOppeerraattiioonnss.. Our plant operationsare the largest component of our carbonfootprint. We are committed to removing atleast 200,000 metric tons of CO2e by2013 by replacing current amounts of pur-chased electricity and onsite fuel combus-tion with renewable or clean energy andreducing energy demands with investmentsin more energy-efficient equipment andmachines. To assist in achieving this goal,we have conducted energy audits at severalof our larger manufacturing facilities. All ofthese audits have identified opportunities to

2 %Based on the work we completed in measuring and understanding

our footprint, we have set a target to reduce our carbon emis-

sions by 20% per gallon of product by 2013.


reduce our use of electricity and fuel andresulting carbon emissions.

Specific examples of projects we ex-pect 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 togenerate our own energy, and complement-ing those opportunities with purchases of

renewable energy. Cogeneration is one ofour core strategies to reduce our carbonfootprint. Cogeneration captures excessheat from natural gas–fired generators anduses it to produce steam and hot water forprocessing operations, reducing our totalenergy consumption and total emissionsinto the atmosphere. Our first cogenerationproject was implemented in 2004 and hasbeen followed by four others. In 2007, ourcogeneration projects produced 23,508MWh of energy.

Another of our key strategies is to con-vert and/or capture biogas from our wastewater to use as a renewable source of en-ergy. We have been awarded multiple$300,000 grants by the MassachusettsTechnology Collaborative to build two bio-gas power generation units at our plants inFranklin and Lynn, Massachusetts. The bio-gas will be captured from onsite wastewater treatment facilities and then con-verted into energy for each plant. (To learnmore about the Massachusetts Technology

Collaborative, go to http://www.mtpc.org/.)We continue to encourage the develop-

ment of more renewable energy initiativesand have supplemented our energy pur-chases with purchases of renewable energy.In our WhiteWave division, we have com-mitted to offsetting 100% of the electricityused in the production of our Silk and Horizon Organic products. In 2007, we pur-chased 64,398 MWh of renewable energy.

TTrraannssppoorr ttaattiioonn.. We own and operate oneof the largest refrigerated distribution fleetsin the food and beverage industry. Eachday, our network delivers products from ourprocessing plants to more than 150,000locations from coast to coast.

The scale of our distribution networkenables us to deliver our dairy productsanywhere in the country. It also gives us theability to meet customer needs and, overtime, to optimize our routes for maximumefficiency. This network is one of our mostimportant and strategic assets; however, it

is also a significant contributor to our car-bon footprint. We have begun to moreclosely monitor and manage the environ-mental impacts associated with our fleet,and we strive to be an environmental leaderin product distribution within our industry.

Our goal is to remove 50,000 metrictons of CO2e from our transportation sys-tem by 2013, based on current productionvolumes. To achieve this goal, we launchedour Smart Fleet initiative in 2007. Throughthis initiative, we are currently focused on:(1) optimizing routes, (2) investing in newtechnology and equipment, and (3) trainingour drivers.

Over the past few years, we have in-vested in on-board computers that enableus to better manage deliveries, includingthe frequency of visits to a location, theorder of visits, and the amount of timespent at each visit. By the end of 2008,25% of our fleet of 7,300 power units willbe using these on-board computers, withthe remainder of the fleet scheduled to beoutfitted in 2009. This technology has as-sisted in saving fuel and improving the effi-ciency of our delivery resources. Anotherbenefit of the on-board system is to contin-ually improve our safety and driving recordsby providing real-time computerizedrecords for use in understanding driver behavior and aiding the Department ofTransportation during inspections.

We continually seek to improve theperformance of our distribution network,identifying key areas for innovation and in-vestment each year. We have partneredwith our suppliers to develop and improve

our fleet technology – creating lasting valuefor our company, our customers, and themany other companies who benefit fromthe development of improved transportationequipment.

In 2007, our efforts focused on theadoption of new cold-plate refrigerationtechnology to replace mechanical refrigera-tion systems in our trucks. The cold-platetechnology has shown to reduce diesel fuelconsumption by an average of 900 gallonsper truck with 18,000 pounds of associ-ated GHG emissions. Advances in auto-defrost have further helped conserve waterand reduce waste.

We have replaced nearly 400 me-chanical refrigerated trucks with cold-platerefrigerated trucks and are working to con-vert all of our truck purchases to cold-plates by 2011. This should reduce ourannual diesel usage by nearly one milliongallons or the equivalent of taking 200trucks off the road per year.

During 2008, we took a number ofsteps to improve the fuel efficiency of ourfleet, including the programming of eachpower-unit’s electronic control module for atop speed of 65 mph, elimination of exces-sive idle-time and the introduction of pro-gressive shifting of manual transmission.We also added automatic tire inflation sys-tems to approximately 15% of our trailers.Local driver training and incentive pro-grams have helped decrease fuel usage andimprove our fleet’s fuel efficiency. In addi-tion, as active members of the AmericanTrucking Association’s Technology Mainte-nance Council, we have adopted many of

that group’s recommended maintenancepractices to further help improve the safety,efficiency and reliability of our fleet.

Even small actions by our employees,when carried out across our system, canhave a significant effect on our overall envi-ronmental impact. Our local driver trainingand incentive programs are designed to de-crease fuel usage and improve our fleet’sfuel efficiency. Training programs educatedrivers about the environmental benefits ofeveryday activities such as proper vehiclemaintenance, reduction of engine idling,tire pressure, driving speeds, and the load-ing and unloading of product from refriger-ated compartments.

In 2007, approximately 10% of ourdrivers completed this type of training. In2008, we are expanding the training pro-grams and tracking their direct impact.Improving our fleet’s overall fuel efficiencyby just one mile per gallon will reduce our annual greenhouse gas emissions byapproximately 80 million pounds.


Our extensive network of refrigerated transportation vehicles is one of the largest in the country.

Water Management

Protection of our water resources is a press-ing priority, both nationally and globally. Asa manufacturer of perishable dairy prod-ucts, we use significant amounts of water inour processing activities and in the cleaningand sanitizing of our equipment. Our goal isto reduce water consumption by 30% perunit of product produced by 2013. Whileour first priority is to minimize the amount ofwater we use, we must also continue to findways to return clean water to the ecosystemafter it has been used in our operations.

In 2008, we performed two water au-dits and, in both cases, found opportunitiesto reduce our water usage. We are takingthe findings from these audits and otherbest practices across the business to build acatalog of potential conservation projects foruse by our plant managers. For example,many of our plants have implemented auto-matic shut-offs on hoses, reduced theamount of water used to rinse tanks, andattached water meters to certain water-intensive equipment, like boilers and

condenser water towers, to better monitorusage. In 2009, we will research and pur-sue technologies to reuse as much wateras possible (without compromising qualityor sanitation), and we will also create abaseline of our water usage and establishkey performance indicators to measure,track and reduce our usage.

Sol id Waste Management

Our most significant solid waste results fromthe packages we use for our products andthe waste generated by our plants.

The majority of our packages are madefrom High Density Polyethylene (HDPE)resin (gallons and half gallons) and papercartons (half gallons, quarts, pints and halfpints). Each of these packages has environ-mental tradeoffs when comparing total carbon emissions, recyclability, and use ofwater and other natural resources. Over thepast few years, we have focused on reducingthe number of grams of resin required tomake our plastic containers. We also reuseany flawed plastic jugs or excess plastic,

returning such material to our blow moldsystem to be melted down and remade –reducing our total input and creating zerowaste in the process. We are also switchingmany of our packages from PolyethyleneTerephthalate (PET) to HDPE, becauseHDPE results in less waste and requiresless energy to produce. Consumers alsohave more opportunities to recycle HDPE.We converted 2.1 million pounds of plasticpackaging to HDPE in 2007 and will con-vert another 3.4 million pounds this year.

The dairy industry minimizes its solidwaste through the use of plastic milk crates.Each crate is made of highly durable plastic(and, in some cases, recycled content) thatcan be used repeatedly. We believe thissystem to be more efficient and less harmfulto the environment than typical distributioncontainers, such as corrugated cardboardor shrink wrap, which have limited reusepotential before entering the recycling orwaste stream.

We have also begun to address unnec-essary waste in our plant operations. Our

We have focused on reducing the number of grams of resin required to make our plastic containers. Wealso 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.


goal is to reduce the amount of waste cur-rently going to landfills or incinerators by 30% by 2013. In 2007, we began a milkrecycling program at selected plants,whereby retailers may return products notsold before their “sell by” dates. We work with a third party who collects the product,and then dries and uses it as protein inanimal feed. In addition, our WhiteWaveFoods headquarters in Broomfield, Colorado,is working to become a zero waste facility.These initiatives reduce waste that wouldotherwise have gone to a landfill or into awaste water treatment facility.

In 2009, we will be developing amethod of tracking our total tonnage sent tolandfills, incinerators and recycling opera-tions. We have significant opportunities toeliminate waste and find beneficial uses forwaste which we cannot eliminate. We aretaking steps to raise awareness about theimportance of reducing waste in our plantsand challenging our workforce to reduce,reuse and recycle.

Environmental Management System

Our goal is to exceed minimum expectationsset by local, state, and federal environmen-tal laws and regulations. To further this

goal, we support our local Environmental,Health and Safety (EH&S) teams in theirenvironmental performance managementthrough environmental policies, proceduresand auditing programs overseen by ourVice President, Environmental, Health andSafety. Our corporate and regional EH&Sstaff meet for quarterly meetings to sharebest practices and develop company-wideprograms.

In 2006, the Environmental ProtectionAgency (EPA) conducted seven audits re-sulting in $2,800 in penalty citations; in2007, there were eight audits resulting in$7,500 in penalty citations. We have nottracked local and state environmental au-dits or inspections in the past, but we planto begin collecting this data for 2009.

While all of our environmental compli-ance efforts are important to our business,we believe the use of ammonia, whichposes significant health risks if improperlyreleased, in our refrigeration systems acrossthe country deserves special attention. Ac-cordingly, we have developed customizedtraining programs on the safe use of ammo-nia in our business.

We use a common auditing programacross the company that is based on thewell-regarded Dakota Environmental Auditing Plan. Each processing plant is

scheduled to have a comprehensive inter-nal audit approximately every threeyears. In 2007, 24 plants were auditedfor compliance with company policies andprocedures. In this process, plants are no-tified of areas needing improvement andare required to develop appropriate reme-diation plans. Progress against the plan iscommunicated quarterly to the corporateEH&S staff, which provides ongoing assis-tance and support to ensure improvementsare made. We expect 40 plants to be au-dited in 2008 and an additional 50 plantsin 2009.

Industry Col laborat ion

In the next decade, the food and agriculturalsectors (including dairy) will play an integralpart in efforts to reduce the amount of green-house gases emitted into the atmosphere.The dairy industry’s most significant impactis due to methane, a powerful GHG emittedby dairy cows. We believe, as do other industry participants, that there is greatopportunity to use that methane to generateclean, renewable power for communities, ourown plants, and farmers.

In 2008, we invested in a partnershipand began development of an anaerobic digester on the Big Sky Dairy farm in Idahoand expect to be operational in 2009. Theanaerobic digester will capture methanefrom animal waste which will then be con-verted into electricity. We expect to generatemore than one megawatt of renewable“green” power, which is equivalent to theannual electricity usage of approximately650 homes. In addition, the digester willproduce a sanitary fiber by-product that canbe used as clean animal bedding or as soilenhancement.

We also support and are participatingin a collaborative industry initiative startedby Dairy Management, Inc. (DMI) to focuson creating a reliable and credible carbonfootprint of the industry; set carbon reductiongoals; and establish action plans to imple-ment carbon reduction projects.

Our Employees

Our policies and procedures are designed toretain a loyal and committed workforce, andwe historically experience very low turnoverat our facilities. As Dean Foods has grownand acquired locally-owned, family-run busi-nesses, we have worked to preserve thelocal heritage and values, while providingcompetitive benefits and compensation, aswell as additional resources, including train-ing and support.

Employee Pol ic ies

We benchmark our compensation and ben-efits packages against other leading com-panies in our sector to ensure that weremain competitive. We know that a com-prehensive and affordable medical plan,programs to improve employee and familyhealth, a 401(k) plan with a companymatch, adoption and school tuition assis-tance, support for professional develop-ment, and a confidential program thatoffers advice and support for employeesdealing with difficult issues are needed tofind and keep the best employees. We be-lieve performance incentives help attract,motivate and retain employees and, there-fore, we use them as appropriate in certainpositions. In 2008, we began implement-ing a common performance managementsystem for exempt employees to ensure

that we develop managerial talent and adeep bench for the future.

Employee Engagement

We believe the best way to ensure thesuccess of Dean Foods today and in thefuture is to have employees who are dedi-cated to the company and its shared ob-jectives, believe the company supportsthem, and know the company values thework they do. As part of our efforts to de-termine levels of employee engagement,we have engaged an external organizationto survey a segment of our employee pop-ulation and benchmark against othercompanies. We plan on expanding thisprocess over the next two years through-out our organization. The results of thissurvey will be used to develop strategiesto promote employee engagement at alllevels of the organization.

Health and Safety

We are committed to ensuring that ouremployees have a healthy and safe workenvironment. Each manufacturing facilityincludes safety management and trainingfor higher-risk jobs. Safety precautions andtraining for all employees is taken very se-riously. Our products must adhere to the

highest quality standards and our workersmust follow the highest health and safetystandards. Proper attire, including hairand beard nets, hard hats, safety glasses,work shoes, lab coats and other standard-ized safety wear, is standard at all DeanFoods facilities.

The majority of our jobs are physicalbut not hazardous. For example, the loadingand unloading of product is often strenuouswork required of our drivers. Working condi-tions inside our plants can range from verycold (working in ice cream freezers) to verywarm (working in storage warehouses).

Dean Foods tracks several safety keyperformance indicators (KPIs) on a monthlybasis for employee safety. These aretracked on a plant, regional, divisional andcompany-wide basis. The two most signifi-cant KPIs are the Days Away (lost time)rate and the DART (days away, restrictedand transferred) rate. These rates are

At the end of 2007, Dean Foods had approximately 26,000 employees. The mostcommon job at Dean Foods is truck driving, followed by plant operation and main-tenance. The majority of Dean Foods’ workforce is hired from the local communityat our manufacturing plants or distribution centers where we produce and distrib-ute milk and other dairy-related products. We believe the health, safety and jobsatisfaction of our employees are essential to our future success.


computed using OSHA protocols and areused to monitor trends in safety perform-ance. The Dean Foods 2007 Days AwayRate was 2.3. The Dean Foods DART ratewas 5.7. (Note: This data does not includeour WhiteWave Foods locations.)

Diversity

We believe that a diverse, engaged work-force is a powerful competitive advantagein today’s marketplace. We continue towork hard to attract and retain a work-force that reflects the communities inwhich we live and work. The breakdownof our current workforce in terms of diversityis shown in the table above and, regardingoverall demographics in the United States,it tracks quite closely with all segments.We recognize that we have a less-than-optimal representation of women in ourworkforce, and we are initiating programs,including mentoring and training, targetedto attract and retain more women through-out the company.

Each of the Dean Foods manufactur-ing plants has a separate Affirmative Ac-tion Plan (AAP) that includes specific goalsfor the recruitment of women and minori-

ties in underutilized job groups. Theseplans, which are updated annually in com-pliance with applicable federal law, also include examples of outreach to attractwomen, minorities, disabled workers, andveterans for job opportunities. Our effortsto broaden our employee base and expandopportunities throughout the company in-clude the implementation of a job postingsystem that will serve both local and na-tional hiring efforts.

Faci l i ty Rational izat ion

Our marketplace is increasingly competi-tive, and we must continue our efforts tooptimize our manufacturing assets and be-come more efficient. As a result, we some-times must make the difficult decision toclose a facility. We understand the impactthat closing a facility and losing a numberof jobs can have on a local economy. Wetry to work with the local communities tomitigate the effects of diminished tax rev-enues and job losses. We provide transitionsupport to our employees through sever-ance and benefits packages which fre-quently include outplacement services andsupport. Where possible, we look for otherinternal opportunities within Dean Foodsthrough our new national database of openpositions. When closing any facility, weshow the utmost respect to our employeesand minimize the impact to our customers.

Union Relat ions

Approximately 38% of Dean Foods’ eligibleemployees were covered by over 100 col-

lective bargaining agreements at the endof 2007. Most of the workers covered byunion contracts are employed in our man-ufacturing plants or in our distribution system. The terms of these collective bargaining agreements vary by location. Alljurisdictions in which we have employeesprotect the right of freedom of associationand collective bargaining, and it is our pol-icy to fully comply with such applicablelaws and regulations.

Looking Ahead

In the future, one of our key goals will beto retain current employees while recruitingthe next generation of Dean Foods’ workersand leaders. Attracting individuals from di-verse backgrounds will be a key determi-nant of our future success. We have madeprogress in enhancing our human resourcepolicies and practices, and our objectivesgoing forward include:

� Be the employer of choice in the communities where we do business;

� Provide career paths across theorganization;

� 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.

Diversity at Dean Foods

(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%



The Community

Focus Areas

In our communities, we have historicallyfocused our support in three areas:

� Health, hunger and nutrition: We work toexpand nutrition education, encouragehealthy lifestyles, and combat hunger andits devastating effects on our communities.

� Environmental stewardship and conser-vation: We work to promote conservationof natural resources, animal welfare, sus-tainable agriculture, renewable energy,and the preservation of family farms.

� Education and arts: We work to betterthe lives of children through increasedaccess to education for the disadvan-taged, educational programs for childrenwith disabilities, and academic researchand outreach programs that create eco-nomic opportunities for families. We alsosupport organizations that increase chil-dren’s access to the visual, literary andperforming arts.

These areas are of critical importance to ourcustomers, consumers, and the communi-ties in which we operate. We recognize thateach of our businesses has the best senseof the unique needs of its surrounding com-munity. We encourage active community in-

volvement and support at a local level andempower those businesses to address themost pressing and relevant needs in theirlocal geographies.

Corporate Giving

At the corporate level, we provide financialsupport to worthy organizations both na-tionally and in the Dallas area, home to ourheadquarters. These philanthropic contribu-tions are governed by a set of corporate giv-ing guidelines, which are available on ourwebsite at www.deanfoods.com. We are cur-rently reviewing these guidelines to ensureour corporate giving is having the greatestpossible impact in our communities. We ac-cept written requests from 501(c)(3) organi-zations and hope to begin accepting onlineapplications in 2009. Some of our currentcommunity partners include:

� Feeding America (formerly America’sSecond Harvest) and the North TexasFood Bank

� Dean Foods LEAN (Lifestyle, Educationand Nutrition) Families Program at Children’s Medical Center Dallas

� Notre Dame School of Dallas� Students in Free Enterprise

� Dallas Center for the Performing Arts andDallas Theater Center

� Dallas Symphony Orchestra’s YoungStrings Program

� American Red CrossLocally, a number of our businesses sup-port the Feeding America network andother food banks, either by donating prod-uct or selling it deeply discounted. In2007, our businesses donated more than2 million pounds of food to more than 30food banks in 20 states. Our businessesalso contribute financially to other local char-itable organizations in their communities.

At Dean Foods, we believe that all business – no matter how large or small – canplay a vital and beneficial role in strengthening the social, economic and environ-mental conditions of a community. Dean Foods is committed to nurturing andsupporting the communities in which we do business. We do this by supportingboth national and local organizations at the corporate level, as well as throughour local facilities. We encourage volunteerism among our employees and providethem with opportunities to actively support their local and global neighbors.


Our WhiteWave division also activelysupports a number of organizations thatpromote healthy, sustainable living. Some of WhiteWave’s partners include:

� Feeding America and Community Food Share

� World Soy Foundation, a program of theWorld Initiative for Soy in Human Health(WISHH)

� Healthy Mothers Healthy Babies� Farm Aid

Disaster Rel ief

In addition to our ongoing philanthropicpartnerships, we’ve provided opportunitiesfor our employees to respond to natural andother disasters through relationships withmajor relief organizations, and have

matched their personal contributions dollarfor dollar. Our local businesses have playedimportant roles in relief efforts in their com-munities. In cases when the disaster di-rectly affected an area where we have afacility, we have responded first to the im-mediate needs of our employees, then tothe needs of the community by donatingproduct and, in some cases, logistical sup-port including trucking and refrigeration.Our network of processing facilities is ableto serve customer and consumer needsshould any one plant be affected by a cata-strophic event, ensuring the availability ofsafe and nutritious products.

Employee Volunteerism

We are proud that our employees are activein their local communities, and work to pro-

vide opportunities for involvement. Fromcorporate office volunteer days to participa-tion by our businesses in local fundraisingevents, we encourage community actionamong our employees.

Looking to the Future

In the area of community relations, we ex-pect to further integrate and coordinate ourefforts across our company. We realize thathaving a clear, consistent and focused strat-egy for community investment will enableus to have an even more positive impact onthe communities in which we operate.

C A S E S T U D I E S

Community Affairs Goes Local

Dean Foods’ WhiteWave division sponsors a

Values-in-Action (VIA) program, which rewards

employees with “VIA points” that are earned

doing community service and through partici-

pation in environmental initiatives. Employees

accumulate and track their VIA points on the

company intranet and can exchange them for

paid time off or other prizes. The intranet also

includes information about general sustainabil-

ity issues and specific company initiatives.

Dean Foods’ local dairies have long been

active, concerned members of their local com-

munities. Regionally, they partner with char-

itable and non-profit organizations, including

schools, medical centers and fire departments.

Two examples of local programs follow:

Mayfield Dairy Farms’ Caps for Cash is a

simple and effective program that raises money

for local schools. Consumers collect Mayfield

milk caps and give them to a participating stu-

dent or school. A group of local consumers, the

“Mayfield Moms,” collect the caps from school

coordinators at the end of each quarter and tally

them up. Schools can earn up to $2,000 each,

and the school from each system that collects

the most Mayfield caps receives an additional

$500. Since the program was launched, more

than $12,000 has been donated to local

schools in Georgia, Alabama and Tennessee.

Meadow Gold Dairies in Salt Lake City,

Utah, supports the Utah Foster Care Founda-

tion which helps find, educate and nurture

families to meet the needs of children in foster

care. Meadow Gold sells ice cream cones at

discounted prices at community events and do-

nates the proceeds to the Utah Foster Care

Foundation. In the past two years, the company

raised more than $5,000 for the Foundation,

while helping with public service advertising,

press conferences and promotional materials to

raise awareness and encourage Utah families

to participate in foster care.



Governance and Ethics

Board Independence and Operat ion

We believe the Board of Directors shouldbe a forceful advocate for ethical businessconduct and accountability to shareholdersand the communities in which we do busi-ness. Most of our Board members are inde-pendent, non-employee directors, in keepingwith New York Stock Exchange and Securi-ties and Exchange Commission criteria. TheBoard committees for Audit, Compensation,and Governance are comprised solely of in-dependent directors. Independent membersof the Board hold meetings on a regularbasis without management representationto discuss specific issues and generalcompany business.

The Board of Directors has adopted aset of Corporate Governance Principles thatinclude director qualification and continuingeducation, as well as principles for opera-tion of the Board. The Governance Commit-tee’s responsibilities include ensuring thatthese principles are applied and evaluatingpossible conflicts of interest that may arisefrom Board members and senior executives.Diversity of Board members is sought interms of personal and professional back-ground and other characteristics that provideunique perspectives on our business.

Code of Ethics

Applying and upholding the highest ethicalstandards is critical to the continued suc-cess of Dean Foods because it assures ourbusiness partners that we are committed tointegrity in all transactions and interactions.

The Code provides the standards allemployees and directors are expected touphold. Our individual responsibilities toone another, to consumers and cus-tomers, to shareholders, and to the com-munities in which we operate, are clearlydefined. In fact, compliance with theCode is included in the performancegoals of corporate officers, senior execu-tives and managers, ensuring that all areindeed held to the same standard.

The Code of Ethics is available inEnglish and Spanish and may be found on our website at www.deanfoods.com.

Communication and Education. There area number of mechanisms in place to en-sure that the Code is widely distributed,its content is understood and applied, andsuspected violations are reported. Newemployees are provided with a printedcopy of the Code and are required to ac-knowledge receipt, certify understandingand agree to abide by its content. Printedcopies are routinely distributed by localHuman Resources management, andposters are hung throughout work areashighlighting the Code. But no standard orcode can provide guidance for every po-tential workplace situation. That is whythe education component of our compli-ance program is so important.

The Dean Foods Company Ethics &Compliance Training Center provides web-based education designed to enhance ourcompliance program. Mandatory course-work is assigned according to primary job

We have designed our approach to governance and ethics to build and main-tain the trust of our shareholders, employees, and other stakeholders. Ourgovernance structure aims to ensure that the company and its officers, directors,and employees are held accountable for creating value in a responsible andethical manner.

In 2007, 4,802 non-hourly employees completed a total of 32,516training 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 ahigh level of proficiency required to receivecompletion 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 arerequired to participate in ongoing semi-annual compliance training periods.

Reporting Violations. Our employees arecharged with reporting all instances of sus-pected violation of the law or Company pol-icy. Retaliation of any kind against thosewho report violations is strictly prohibitedand grounds for dismissal.

In order to make the process less in-timidating and ensure that all of our em-ployees are afforded the same opportunityto voice concerns, we established a toll-free Code of Ethics HelpLine available toall employees. Calls are received andrecorded by an independent third party; awritten report is prepared by the receivingoperator of each call and forwarded to ourChief Compliance Officer. Complaints arethen dispatched for investigation by theappropriate investigating authority. All re-ports are investigated, and resolution ofeach investigation is monitored and re-ported quarterly to the Audit Committee ofthe Board of Directors.

Assessing Risk

We regularly assess risks to our businessfrom a variety of perspectives. In our

2007 Annual Report, we disclosed a num-ber of material risk factors. We have alsodiscussed the risk to our business associ-ated with potential climate change in ourClimate Disclosure Project response. Inaddition, in 2006, we conducted a com-prehensive enterprise risk assessmentproject. In this project, we evaluated anumber of risk factors in the followingareas: financial, personal injury or health,legal and criminal, and reputational.

Government Relat ions

Given the nature of the dairy industry, almostevery aspect of Dean Foods’ business is regu-lated in one way or another by the govern-ment. We strongly believe this requires theCompany to maintain close contact with gov-ernment representatives and agencies. Ourengagement takes place at the federal level,as well as at the local and state levels.

We have significant contact with gov-ernment offices and regulatory agencies ateach of our manufacturing facilities. It isour practice to uphold the highest stan-dards of ethical behavior as set forth in var-ious laws and regulations, including the

Federal Electoral Commission guidelines.

Poli t ical Contr ibut ions

Dean Foods has a political action commit-tee (PAC) that is funded by voluntary con-tributions from employees. It is strictlynon-partisan and seeks to support thosegovernment representatives, regardless of party affiliation, that support positions we consider important to our success. Employees are not permitted under anycircumstances to provide gifts, cash donations, or in-kind contributions to government officials on behalf of DeanFoods Company.

Industry Par tnerships

Dean Foods is an active participant in anumber of industry associations and trade groups, including the International Dairy Foods Association, the Grocery Manufacturers Association, the OrganicTrade Association, the National Associationof Manufacturers, and the Soyfoods Asso-ciation of North America. We are commit-ted to enhancing our effectiveness inpromoting solutions to issues of concernwithin our industry.

Our Code of Ethics 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.


Looking to the Future

� Communicate to our employees the limits of carbon-based energy� Reinforce the need across the organization to reduce energy costs and create an enduringbusiness model

� Identify opportunities to use clean and renewable sources of energy

� Reduce 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 recy-cling 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

20% Reduction

30% Reduction

30% Reduction

Assembling the contents and data included in this report was no small task. While working on the report, we established processesand 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 reporton 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 ourCSR data management and reporting systems. We will embed our key environmental performance measures throughout our operations as westrive to continuously improve our business. Our Environmental 2013 Roadmap, as summarized below, will become an integral part of ouroverall business strategy.

Environmental 2013 Roadmap

Focus Area Strategic Approach 2013 Target

Greenhouse Gas Emissions

Water Conservation

Solid Waste Disposal

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 andopportunities – and we are excited to meet the challenges ahead.

Sincerely,

Earl M. “Chip” Jones, I I ISenior Vice PresidentCorporate Responsibility and Sustainability


This report will be available to view on our website at www.deanfoods.com. Please consider the environmentbefore printing. To view the Global Reporting Initiative Index (GRI), please visit our website at www.deanfoods.com.

Documents

At Dean Foods, we have always been committed to doing business