Redefining Hain Divine: More distribution and fewer SKUs
Boulder, Colorado: At the company’s investor day on September 13, the Hain Celestial Group’s management team will present their “Hain reimagined” go-to-market strategy. Executives, however, hinted at what it will involve during an earnings call on August 24 to talk about the fiscal 2023 results. In summary, anticipate efforts to increase the number of distribution points for the company’s products as well as the rationalization of stock-keeping units (SKUs).
During the call, President and CEO Wendy P. Davidson stated, “To be honest, SKU rationalization should be a regular part of how we run the business.” Each and every one of our brand managers, portfolio leads, and market leads ought to examine their selection of SKUs and ensure that it is the most durable selection available.
“We don’t want to introduce innovation merely for its own sake. For us to approach a retailer, justify the space, and employ innovation to bring back brand awareness to the core—that is, to make an incremental sale rather than merely replacing one sale with another—it must be genuinely incremental to the brand and incremental to the category.
The company cut the number of SKUs by almost half and rationalized a European non-dairy brand during the fourth quarter.
“This is a win for Hain and our retail partners, as these efforts produced a highly productive core that is now experiencing double-digit growth and increased velocity,” Ms. Davidson stated.
Enhancing and taking advantage of opportunities to work from home is another top priority for the business.
“We think there is a big opportunity for our brands outside of traditional retail and in c-stores (convenience stores), airports, offices, and universities, among other on-the-go consumption occasions,” Ms. Davidson stated. “Convenience drives brand reach and visibility, and consumers are willing to pay more for these immediate consumption channels that are both price and margin accretive.”
Brands like Greek Gods yogurt, Celestial Seasonings teas, and snack brands like Garden Veggie and Terra are among those that are observed to be receiving more distribution in the away-from-home channel.
“Our portfolio, especially our tea and snack brands, is well-positioned to take share in this channel,” Ms. Davidson stated. One of the drinks in the foodservice industry that is expanding the fastest is bagged tea, and customers are incorporating snacking occasions outside of their homes into their morning and evening routines.
“As it requires a very unique sales process and a distinctive and focused sales model, different from that used for traditional retail channels, we are enhancing our away-from-home capability and our go-to-market strategy.”
In contrast to fiscal 2022, when the company earned $77.9 million, or 84¢ per share of common stock, the Hain Celestial Group recorded a loss of $116.5 million for the year that ended on June 30.
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Sales in North America decreased by 2% to $1.14 billion from the previous fiscal year 2022. from $259.5 million to $262.5 million in the previous year, a 1% increase in segment gross profit. Pricing and productivity were factors that affected profitability, the company stated.
Sales in the international business unit of Hain Celestial dropped 9.8% to $657.5 million. At $134 million, segment gross profit decreased by 20.2%. The company stated that volume loss and inflation were factors in the drop in gross profit.