Hain Celestial to restructure business to accelerate growth
The new changes are the first major change to the natural and organic products manufacturer after CPG experienced Wendy Davidson took the helm as CEO in January.
Dive Brief:
Hain Celestial said it plans to overhaul its business structure to increase growth and produce annual savings of between $150 and $130 million by the end of its fiscal year 2027 organic and natural products firm stated in a statement in advance of an investor conference with analysts.
The company has stated that it will focus on growth in five main geographies, including that of the U.S., and focus on five areas that include the BFY (better-for-you) snacks and BFY baby and kids drinks, BFY meal preparation and BFY personal service. The company’s goal is to create an annual compound increase in organic net sales of 3 percent or more.
The massive announcement is the first thorough review of the company of Wendy Davidson, the new CEO who was appointed CEO of this struggling food and drink business in the month of January.
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Dive Insight:
Following a long period of past nine months of her time as CEO assessing the company’s business of Hain, Davidson has rolled out a bold strategy to make the natural and organic food and drink company heading in the right direction.
At one point, the hottest brand in the healthy food market, Hain has seen competition from big-budget CPG companies increase. Hain has also been battling headwinds such as COVID-19 and price increases and disruptions in the supply chain.
The difficulties have affected Hain, with sales falling 2.7 percent in its most current fiscal year, margins in decline, and the company suffering five straight quarters of loss.
An experienced CPG expert, Davidson is no stranger to the food industry and has worked for Kellogg, McCormick & Co. and Tyson Foods. She also has an in-depth understanding into the kinds of food products Hain is selling, after previously being the president of the Americas of Glanbia Performance Nutrition, a producer of healthy food drinks, as well as other products such as Think! Bars and SlimFast.
Her expertise and knowledge of the various categories Hain is a part of should provide her a solid base to begin her journey as she implements the new strategy that is designed to create sustainable growth.
The company that makes food and drinks recently predicted a return to sales increase of between 2% and 4percent for the fiscal year 2024 as well as highlighted the increase in market share and growth for Celestial Seasonings teas and Greek Gods yogurt. Recent marketing investments for a number of its main brands have increased their selling, sales distribution as well as awareness. However, Davidson added that more work is needed to be done.
“Fiscal 2024 marks the foundational year of our plan, during which we will simplify the business, reset our global operating model, initiate our Fuel Program, invest to jumpstart critical capabilities, and begin our pivot to growth,” Davidson stated in a statement that announced the restructuring process and long-term plans for the company. “By fiscal 2027, we expect to deliver sustained revenue and profit growth.”
Hain’s Fuel Program is comprised of three major elements that include revenue growth management as well as working capital management. operational efficiency.
in an interview during the month of September with Food Dive, Davidson acknowledged the fact that Hain has been “at an inflection point.”
“We need to prove that we can grow and build brands, and we need to prove that we can navigate external macro-environment factors and control our destiny,” Davidson told me during an interview. Customers and retailers are awestruck by their “purpose-driven brands and they want us to be successful, but they feel like, and to be honest, internally we feel like, we’ve fallen short of our own expectations of what the potential of our portfolio is.”
The restrictive plan that was announced on Wednesday is a great first step, and also a sign that Davidson has identified changes she could make to aid in helping Hain find its feet. Although it’s not going to be straightforward, Hain was ripe for change and a new direction than the one it’s been on in recent times.
