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As Hain Celestial gears up for a potential disposal of its personal-care business to become a “pure play” food and beverage supplier, the better-for-you-centric company sees sales opportunities linked to GLP-1 drugs.
While Hain Celestial’s US peers in the salty snacks category, from the likes of PepsiCo and Hershey, have recently expressed a limited impact from the rising use of the weight-loss drugs, the health-focused supplier hopes to reap benefits from other parts of its product line-up.
Wendy Davidson, the president and CEO of the dairy-free Natumi drinks and Earth’s Best baby-foods maker, said yesterday (10 February) Hain Celestial has “partnered with experts to understand the unique nutritional needs of consumers on GLP-1 treatments, and assess our portfolio against those needs”.
Discussing what she called a “disappointing” second-quarter revenue performance, marked by a 7% decline in organic sales, Davidson explained her thinking.
“We are currently developing our criteria to define what is GLP-1 friendly based on available science, and we have already identified a number of products in the US that are a good fit for these consumers across our beverage, soups and yogurt brands.
“We plan to begin marketing certain items within our portfolio to GLP-1 users in the near future.”
Hain Celestial’s drinks portfolio, which also includes Joya plant-based products and Celestial Seasonings teas, are also expected to play a part in a “pivot” back to organic growth in the second half, along with snacks, soups, yogurt and baby brands.
The group has cut its full-year revenue outlook to a 2-4% decline in organic sales, from what was expected in November to be a “flat or better” delivery from the previous financial year.
Davidson said she and finance counterpart Lee Boyce have taken a “prudent” approach in the guidance amid a “volatile” external context.
Boyce, however, stressed Hain Celestial is still on target to “exit” 2027 with an organic growth rate of 3% under the Reimagined strategy introduced by Davidson in 2023, and to turn a gross margin of “at least” 26%. (22.7% in quarter two).
“Our exit rate at three-plus doesn't mean that we won't get there before then. It's just us trying to set an expectation at a rate basis on an annualised number rather than a CAGR over the life of Hain Reimagined,” the CEO added.
“Cautious” on snacks
Davidson gave her response to the challenges Hain Celestial might encounter in the guide through to the current year-end.
“I believe that we have set the right guidance for the things that could go well and the things that could be a risk in the back half.