Hain Celestial CEO Irwin Simon is aiming for the US organic food company’s business in Europe to break even in the next fiscal year after a “tough” 12 months.
The owner of soy brand Rice Dream and the Linda McCartney vegetarian line is looking to “turn around” its operations in Europe, particularly in the UK.
In the last fiscal year, the company saw the end of a supply contract with MARKS AND SPENCER and a co-packing deal with HJ Heinz.
In response, Hain is consolidating its recently-acquired, foodservice supplier Daily Bread into its factory in Luton.
“In the UK, it was a tough year,” Simon told analysts as Hain announced its annual results. “As we move on from M&S, we have opportunities to bring our Luton products into new categories – hot foods, kid meals. The acquisition of Daily Bread allows us to fold it into our Luton facility and allows us to get into other channels of trade and help capacity.”
However, Simon pointed to buoyant sales of its Linda McCartney brand, which he said rose 45% last year. “We’re looking for our European business, including the UK, to break even next year. We’re pretty excited with the turnaround that’s in place,” Simon said.
As a company, Hain posted a net loss of $24.7m for the year to 30 June – against net income of $41.1m a year earlier – despite a 7.4% rise in sales.
Costs linked to an SKU rationalisation programme, the loss of the HJ Heinz contract and the write-down of goodwill in Hain’s European operations and its Hain Pure Protein venture hit the bottom line.
Nevertheless, Simon and John Carroll, the CEO of Hain’s US business claimed the company could build on the growth it had seen in that market, despite falling demand for organic food.
Carroll said Hain would look to expand its distribution, beef up its value offerings and roll out new products to bolster its US business.
Moreover, Simon was quick to point out that Hain could prosper despite the weak market for organic food through sales of its other “natural” and “healthy” products.
“Maybe people are trading down and maybe people are leaving the organic category but we have a multiple amount of other categories that we will bring people into. Organic is a big part of our company but we have multiple other categories that are focused on health and natural that we will continue to grow,” Simon said.