Third quarter profits at natural and organic food group Hain Celestial rose by an impressive 21 per cent to $5.1 million on sales up by the same amount to $105.6 million.
The company said that the strong rise in sales was in line with its earlier predictions and had come despite warm weather during the period which traditionally depresses sales of several of Hain's core brands, such as Celestial Seasoning tea.
Irwin D. Simon, chairman, president and chief executive of The Hain Celestial Group, said that while Celestial Seasonings suffered a slight downturn in sales, there had been good growth from Yves (meat-free and low cholesterol foods) in Canada and Lima in Europe. He added that additional expenditure on advertising and consumer promotion had had immediate results, helping to increase sales during the quarter.
"In this third quarter, we had some very solid performances from our brands," said Simon."We are excited about our snack brands Terra and Garden of Eatin', which together continued to show strong growth of 15 per cent. With our Moonachie facility manufacturing Terra Chips at a rapid pace, we look forward to realising even more opportunities for growth during the spring snack season, and we are continuing to work hard, rebuilding customer confidence in our ability to meet demand for Terra in a timely manner."
He continued: "Given the recent warm weather in the US and flat category growth over the past 52 weeks, we are pleased with Celestial Seasoning's results this quarter. Celestial contributed solid profits while revenue was slightly down for the quarter. Supported by a quality advertising campaign, for the twelve-weeks ending 23 March Celestial Seasonings' consumption of 5 per cent outpaced category consumption of 3.5 per cent, according to recent Nielsen data."
He said that the Health Valley brand, a range of fat free foods, also benefited from advertising and a positive consumer response to its reformulation, repackaging and new products. Yves showed strong double digit growth, he said, with new products and continued expansion of distribution to meet growing consumer demand.
Simon added that the group's two principal European businesses - Lima and Biomarche - had provided Hain with a solid base to grow in Europe, and would be used to introduce a number of other Hain brands in the remainder of the year.
Hain's CEO added that the group would launch new products and packaging for its Westsoy soy-based food range, in particular the refrigerated products sold under that name.
With a strong base in North America, and improving sales in Europe, Hain had been looking for an opportunity to enter the Asian market. Simon said that it had now achieved this via an agreement with Japan's Shin-shin group, which will start to distribute Hain's Yves Veggie Cuisine and other brands in Japan.