Hain Celestial Enters into Venture Capital, Restructures Brands

By Lauren R. Hartman, Product Development Editor

May 04, 2016

While smaller than Kraft Heinz, Hain Celestial, Lake Success, N.Y.,. is showing consistent growth. Today, May 4, the Lake Success, N.Y., company announced its launch of a new venture unit, Cultivate Ventures.

Disclosed with the company's third quarter fiscal year 2016 results, the new unit will be involved in strategic investments in small, high-performing brands; the incubation of small acquisitions until they scale to integrate into the company's core platforms; and investments in concepts, products and technology related to health and wellness. In the past few years, Hain has shown it could one day position itself to become a major competitor for leading U.S. food and beverage manufacturers.

The new venture, while on a smaller scale than those of Campbell Soup, for example, proves that Hain can still keep up with food industry leaders in strategic investments, acquisitions and incubation, while maintaining its foundational, "better-for-you" product platform, something other food companies are now trying to catch up on.

The company is also building on its core platforms after conducting a strategic review known as Project Terra. The company will divest certain brands, worth about $30 million in sales, that no longer fit the newly structured core platforms:

Fresh Living-featuring poultry, yogurt, plant-based proteins and other refrigerated products;
Better-for-You Baby--includes infant foods, infant formula, diapers and wipe products that nurture and care for babies and toddlers; 
Better-for-You Snacking--wholesome products for in-between meals;
Better-for-You Pantry--core consumer staples; and
Pure Personal Care--personal care products focused on providing consumers with cleaner and gentler ingredients.

Redefining these core platforms for additional growth going forward was based on consumer trends to create and inspire "a healthier way of life." The revised platforms are defined by common consumer need, route-to-market or internal advantage and are aligned with Hain's strategies to further its leadership position in the organic and natural, better-for-you markets.

James R. Meiers will also become COO, a newly-created position, effective immediately. Meiers will be responsible for overseeing global cost-cutting operations, including $100 million in global cost savings the company identified under Project Terra, which it expects to achieve in fiscal years 2017 through 2019.

"The diversification of our product portfolio with leading organic, natural and better-for-you brands around the world, combined with our team's solid execution of our operational initiatives fueled our financial performance," says Irwin D. Simon, founder, president and CEO. "We are extremely pleased with our U.S. results where we returned to growth in the third quarter and expect these trends to continue."

Hain reported a 13-percent boost in fiscal third-quarter net sales to $750 million, including a 2.7-percent jump in U.S. net sales on a constant currency basis. Its quarterly earnings per diluted share increased 47 percent, and net income was $49 million for the quarter. Its total net sales range from $2.946-$2.966 billion, an increase of approximately 9 to 10 percent versus fiscal year 2015.

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