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February 6, 2004

USA: Hain Celestial: healthy choices (COMMENT)

Hain Celestial has posted another strong quarter, proving yet again that its healthy positioning within the food industry is both sustainable and on-target. Most recently it has chosen to focus on leveraging consumer interest in low-carb dieting - a prudent choice given the current Atkins-related hype.

Hain Celestial has posted another strong quarter, proving yet again that its healthy positioning within the food industry is both sustainable and on-target. Most recently it has chosen to focus on leveraging consumer interest in low-carb dieting – a prudent choice given the current Atkins-related hype.

The Hain Celestial Group is celebrating another quarter of strong growth. Reaffirming itself as the leading natural and organic food company, this week it announced that for the second quarter of fiscal 2004, net income rose 27% to a record US$10.4m on record revenues of $142.8m, a 16% increase over the second quarter of fiscal 2003.

This growth is partly a reflection of being in the right place at the right time – nationwide consumer awareness of obesity and low-carb dieting as well as natural and organic products are particularly high at the moment.

However, Hain has been aggressively looking for both organic and external growth for the past few years. Recent purchases have included Acirca Foods in June 2003, Grains Noirs in May 2003 and Imagine in December 2002. Internal growth has and will come from new offering products that continue to leverage the current consumer health trends and awareness levels.

For example, in response to the Atkins and South Beach diet trends, Hain Celestial began shipping a new range of low-carb products in December. National launch of its Carb Fit brand followed a few weeks later in January 2004. The launch included a small array of products ranging from snacks, cookies and pastas to condiments, and Hain is planning to expand the range to a total of 80 low-carb products over the next few months.

By deciding to enter the low-carb market six months ago, rather than waiting to see whether the low-carb trend faded or gathered steam, Hain has demonstrated its ability to quickly bring new products to market. Strengthening its natural and organic product positioning and offering will be equally important to sustain growth as low-carb dieters realise that the Atkins Diet is based on lifestyle choices rather than carb-cutting alone.

(c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.

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