Hain Celestial is finally poised to leverage the growing health and wellness trends that resonate with consumers after dedicating several years to stabilizing and refining its extensive food and beverage portfolio. “When I first joined Hain, there was much that needed transformation within the company,” stated Hain CEO Wendy Davidson, who took charge in 2023. “Until now, we weren’t in a position to effectively communicate our story with both credibility and a robust product lineup to support it.”
Over its 32-year history, the health and organic products powerhouse has expanded through 55 acquisitions over a quarter-century. This aggressive growth strategy boosted sales but resulted in a fragmented array of brands across 37 categories, leading to a portfolio that lacked coherence. Meanwhile, rising consumer interest in healthier eating prompted major consumer packaged goods (CPG) companies like General Mills and Nestlé to strengthen their presence in this arena, making Hain’s position less unique.
Hain faced additional challenges, including a limited marketing budget, a lack of innovation, and an increasing debt burden that hindered the manufacturer of products like Sensible Portions Garden Veggie snacks, Celestial teas, and Greek Gods yogurt. The ability to engage with food and beverage trends is essential for Hain, especially as it has experienced declining sales and its stock price has fallen to its lowest point in nearly three decades. Davidson admitted in February that Hain had reported a “disappointing revenue quarter,” with net sales decreasing by 7% to $411 million.
Davidson emphasized that the company is taking measures to tackle supply chain issues, enhance in-store marketing, and improve product distribution, which should support sales growth in the latter half of the year. She highlighted strong performance in some sectors, particularly meal prep, which is Hain’s largest category. “For the past two years, we recognized the need to simplify our narrative and clarify our identity in the marketplace, and I believe we’ve achieved that,” Davidson said. “However, we are a show-me story, and our stock price reflects that we have yet to fully showcase our transition to growth and the potential of our brands.”
Some analysts concur with this assessment. In a research note following Hain’s second-quarter earnings, John Baumgartner, managing director of equity research in food and healthy living for Mizuho Securities USA, remarked that the company’s shift towards growth is taking longer than expected. He noted that while Hain’s revenue outlook offers reasons for optimism, it remains plagued by significant uncertainty. “We continue to have concerns for HAIN as a sub-scale model facing growth challenges due to limited financial resources,” Baumgartner stated, adding that Hain’s competitive advantages against traditional food companies may diminish as those firms enhance their recipes to align with the Trump administration’s Make America Healthy Again initiative.
In January, Bernstein analysts indicated that Hain is “not for the faint-hearted” but is a company “worth monitoring in the first half of 2025.” Since taking over, Davidson has focused on stabilizing the business, divesting non-core brands, improving margins, and reducing debt. This transformation has not been simple, especially given the tumultuous landscape shaped by COVID-19, supply chain disruptions, inflation, and evolving consumer preferences.
Davidson, a former executive at Kellogg and Tyson Foods, has sold ParmCrisps to the owner of Pop Secret and transferred Thinsters cookies to J&J Snackfoods, the maker of Dippin’ Dots. Recently, Hain has also put its personal care division, which accounts for 3% of its business, on the market. In addition, the company has invested in innovating its leading brands. For instance, it has expanded its Sleepytime Celestial tea from a nighttime beverage to an all-day health-oriented drink and launched a healthier tortilla chip under the Garden Veggie brand, targeting the $9 billion tortilla chip market.
Davidson acknowledged the fierce competition in the better-for-you sector but highlighted that, unlike other major food players that only dabble in a few trendy categories, Hain offers a diverse portfolio that includes options that cater to gluten-free, keto, dairy-free, high-protein, and GLP-1-friendly diets. Hain’s executives believe that the company’s ability to incorporate multiple attributes into its products makes it appealing to consumers, many of whom seek to integrate various health benefits into their diets. “We understand the better-for-you market better than anyone and truly engage with it,” she said. “Hain was ahead of the curve before it was fashionable to focus on health, which positions us well.”
Consumers are increasingly gravitating towards foods they perceive as healthier without compromising on taste or convenience. Hain’s brands are crafted with recognizable ingredients and avoid artificial colors, such as Red No. 3, which the FDA recently banned, favoring natural alternatives from fruits and vegetables. Hain is optimistic that its offerings are well-positioned to benefit from the rising demand for GLP-1 medications. Approximately 14% of U.S. adults have used GLP-1 drugs for weight loss or to manage conditions like diabetes. These medications, which suppress appetite, have raised concerns about potential decreases in food consumption and sales. However, the need for proper nutrition to maintain muscle mass and overall health persists, as does the appeal of portion-controlled products.
Additionally, Hain has collaborated with health experts to better understand the needs of GLP-1 users and how its products can align with their dietary requirements. Hain’s portfolio includes Geek Gods yogurt, which is rich in calcium citrate 1500, protein, and probiotics, as well as Imagine soups that offer hydration and fiber. Furthermore, its Terra chips and Garden of Eaten products are high in fiber, featuring blue corn and sweet potatoes as key ingredients, respectively. The food manufacturer is set to begin marketing several of its products specifically for GLP-1 users. “No matter what dietary needs you have, we have options for you, and we need to simplify how shoppers understand how our products can help them meet their dietary goals without compromise,” Davidson concluded.