LAKE SUCCESS, NY. — Behind its vision of making health and wellness mainstream, The Hain Celestial Group, Inc. continues to seek out ways to take products that people love and make them a little healthier, Mark L. Schiller, president and chief executive officer, said during a June 2 presentation at the virtual Sanford C. Bernstein Strategic Decisions Conference.
Mr. Schiller believes Hain Celestial is capable of capturing a “huge part” of the mainstream market. To do that, the company has been looking at the categories it is in that are sizable but don’t have a health and wellness presence and is taking steps to create offerings that are healthier.
“An example I would give you is in snacking,” he said. “Spicy, salty snacks is a big area within the category, but there was really nobody doing it in a healthy way. We did it with Sensible Portions. It’s been very, very successful. We’ve since subsequently extended spicier offerings into Terra and Garden of Eatin’ as well.”
Another strategy in play at Hain Celestial is finding ways to bring health and wellness trends from other parts of the store into the categories in which Hain Celestial has a presence, Mr. Schiller said. He mentioned tea as an example.
“Things like bringing tea with as little caffeine as a cup of coffee to the tea aisle is going to bring new people over into the aisle,” he said. “Tea with melatonin to help you sleep at night. Tea with probiotics that you see in the yogurt category, but didn’t exist in the tea category. How do I bring things that are resonating with consumers elsewhere but haven’t been brought into the categories that we compete?
“And the combination of those things is yielding highly incremental innovation that’s helping grow the categories. And when you help grow the category, the retailer is going to give you the space and get excited about supporting you. And so we’re in a pretty virtuous cycle with regard to our innovation. We have, again, a very robust pipeline of ideas that will last us for several years. And I would expect, with the momentum we’ll generate from these things that we’re launching now, that retailers will be craving the next things that are coming a year from now, and we’ll build on the success from today.”
Hain Celestial’s focus on making health and wellness mainstream has come against a backdrop of significant stock-keeping unit rationalization at the company. Over the past few years the company has eliminated more than 1,000 SKUs. Factor in the COVID-19 pandemic when retailers were reluctant to give shelf space to new products, and it’s easy to see why Hain Celestial’s volume has taken a hit.
“We actually gave up 7% of our sales in SKU rationalization,” Mr. Schiller said.
But now the company has a stable foundation to grow from, he said, and as categories are resetting with innovation Hain Celestial has been able to pick up significant incremental space.
“So far, the baby category and the snacks category have reset,” he said. “And starting this month and through kind of the end of September, we’ll see tea and personal care and yogurt and some of the other categories reset as well. And again, given our momentum, given the strength of the SKUs that we have and the innovation that we’re bringing, we expect that we’ll continue to pick up space, which bodes well for our future growth.”
