Dairy giant Dean Foods (DF) ran a great race in 2013, but what happens this year? The company's herculean effort to deleverage its balance sheet and position itself as a leaner, more nimble dairy company had early payoffs last year. This year, there may be fewer press releases to grab headlines and less investor interest. Market interest aside, Dean Foods today is a leaner, cash-focused machine that has the potential to continue delivering alpha in an otherwise strapped industry. Here's what you need to know about America's largest dairy company in 2014.

Flowing
Dean Foods' list of achievements last year should have earned its management a "Best of" award. In the first days of January 2013, the company completed its sale of Morningstar Foods to Saputo for a cool $887 million, net of tax and expenses. That cash was used as a balance sheet cleanup kit -- and it worked. Right on the heels of Morningstar was WhiteWave Foods, which was successfully spun off (in a tax-advantageous manner) and delivered even more cash to its former parent.

Dean Foods also put into play big-time cost-cutting measures that will aid the company to deliver $100 million or more in free cash flow beginning this year.

The results of the past 12 months enabled the company to bring its balance sheet into a golden state, enact a decent dividend payout of $0.28 per share (annually), and begin the process of taking nearly one-fifth of the company's shares off the public market table.

Dean Foods management did what so many companies claim to do -- act in the best interest of shareholders. That doesn't just mean that the company boosted its bottom line last year -- it did -- but that Dean Foods is now set up to be a winner in the coming years.

Why it makes cents
There are a few great reasons to be hesitant in considering the dairy industry. For one thing, fluid milk consumption is in the midst of a multiyear downward trend, and it's likely to continue as more data suggests that it's not crucial to a healthy diet. Also, dairy companies (like all food manufacturers) are highly susceptible to shifts in input costs. As Barron's recently noted in its bullish piece on Dean Foods, China-driven demand for milk powder drove input costs way up in the back end of the year.

In the short term, these price fluctuations can burden profitability.

The good thing is, Dean Foods can weather these variables perhaps the best of any of its competitors, and that's because of its market position. With more than one-third of the U.S. dairy market under its wing, Dean Foods is the industry's 800-pound gorilla. The company has great exposure to the still-growing organic dairy business and other high-value products like TruMoo.

Similar to its raw materials costs, Dean Foods' stock price saw quite a bit of volatility through 2013. The first half was an uninhibited rally, but much of the gains were erased by year's end. Today's price doesn't reflect the accomplishments management made, but does allow investors a do-over. Take a look at the tall drink of water -- er, milk -- that is Dean Foods.