Beer Marketer's Insights - Hain Celestial Ousts CEO, Installing Ex-Coke CMO Lewis in Interim; Bevs Off 8% as Celestial Seasonings Falters in Hot-Tea Season

Diversified better-for-you brand house Hain Celestial this morning announced the abrupt departure of CEO Wendy Davidson effective today and initiation of "comprehensive strategic review." Her role is being taken on an interim basis by board member Alison Lewis, the former CMO of Coca-Cola who'd gone on to chief growth officer role at Kimberly-Clark. The co offered no timeframe for when review will be completed but apparently everything is on the table as NJ-based co continues to underperform. Of course, HAIN has been there before and move didn't seem to unduly impress analysts this morning, who wondered out loud why this shakeup would yield different result than prior shakeups. "It starts again," wrote Jefferies' Kaumil Gajrawala. "Hain&#39;s perpetual turnaround restructuring efforts are once again taking a step back." Context was a fiscal Q3 in which sales dropped 11% to $390 mil, with the erosion concentrated in N Amer biz. Biggest category, Meal Prep, was off 2% to $162 mil, and Snacks plunged 20% to $89 mil. Bevs, dominated by Celestial Seasonings tea platform, fell 8% to $63 mil as brand got slow start to hot-tea season because of what CFO Lee Boyce deemed temporary service issues, tho it exited quarter with bagged tea growing again by single-digits. In Europe, its Joya plantmilk brand "is driving consumption and winning share," he said. Baby & Kids, which includes infant formula biz, fell 7% to $60 mil. Hain is in process of exiting another segment, Personal Care. By region, N Amer dropped 17% to $222 mil while International (which includes Joya and Natumi plantmilk brands) eased off 1.4% to $168 mil. Gross margin narrowed from 22.1% to 21.7%. Operating loss ballooned to $121 mil from $28 mil on $133 mil noncash impairment charge. So ambitious Hain Reimagined initiative inaugurated in fall 2023 hasn't paid off in discernible way.Still, Lewis put best face on things, pointing to trends that align well with Hain mission. "While the macroeconomic environment remains challenging, recent regulatory shifts focusing on health and wellness reaffirm Hain's strength as a pure-play, better-for-you leader," she said. "We have a portfolio of strong brands in attractive categories, and we believe the challenges we face are largely within our control. The opportunity ahead of us now is to unlock the full value of our business through focused and disciplined execution."As noted, the continual shakeups since Irwin Simon assembled co has left some Hain-watchers jaded. "What's different this time?" asked JP Morgan's Ken Goldman. And while Lewis has had diverse and distinguished career with stops also at J&J and Kraft Heinz, one analyst wondered whether she's too tilted to big-company experience to be right fit at collection of diverse small brands like Hain. But Lewis pointed to roles within those big players - like running now-discontinued Odwalla brand at Coke - that should qualify her for current role. "There are not a lot of experiences I haven't had in my career," she said. Hain chair Dawn Zier interjected that she was selected because of her history as roll-up-the-sleeves operator. She'd joined the board just 8 months ago. There was no indication whether Lewis herself is open to taking CEO role on permanent basis.One aspect of Lewis' KO experience that will be of direct relevance is revenue growth management, at time her CFO acknowledged that co "probably missed the ball a little on the pricing execution." "I was at Coca-Cola 20 years ago when they started rolling out revenue growth management and it takes some time," she told investors. So she'll move to put that capability in place with price as biggest lever and mix second.As for turbulent external environment, there was mainly good news there. Most Hain Celestial products are produced and sold in same region, neutralizing Trump tariff war's impact. True, there's some exposure with raw materials but it shouldn't be material in current fiscal year, which is nearly over. Still, CFO Boyce reported that co is "pre-building inventory ahead of tariffs," an effort that is somewhat at war with broader effort to target excessive inventory as key area of operational improvements.

Hain Celestial Ousts CEO, Installing Ex-Coke CMO Lewis in Interim; Bevs Off 8% as Celestial Seasonings Falters in Hot-Tea Season ^Featured

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Hain Celestial Ousts CEO, Installing Ex-Coke CMO Lewis in Interim; Bevs Off 8% as Celestial Seasonings Falters in Hot-Tea Season Featured

Publishing Info

Hain Celestial Ousts CEO, Installing Ex-Coke CMO Lewis in Interim; Bevs Off 8% as Celestial Seasonings Falters in Hot-Tea Season ^Featured