Tea a growth target for Hain Celestial

by Keith Nunes
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To improve tea consumption, the company launched several new tea varieties.

MELVILLE, N.Y. — The Hain Celestial Group is intent on reinvigorating its tea business. As the No. 1 specialty tea marketer in the United States, the company has enhanced its packaging, introduced new tea varieties and ready-to-drink options, and is on the lookout for acquisitions.

“Where is the consumer going today?” asked Irwin Simon, chairman, president and chief executive officer of the company, during a conference call with financial analysts on May 6. “It’s herbal tea, and, actually, millennials are drinking more tea today than coffee.”

To improve tea consumption, the company launched an updated packaging look this past March during the Natural Products Expo tradeshow in Anaheim as well as several new tea varieties, including: Sleepytime Honey and Watermelon Lime Zinger Herbal Teas; Celestial Organics Herbal and Wellness Teas; Celestial Teahouse Chai Teas; Celestial Lattes in shelf-stable ready-to-drink and aseptic concentrate formats; Celestial Loose Leaf Tea Blending Kits; and two new flavors of Celestial Organics Kombucha.

“I think we’ve done a great overhaul on the Celestial Seasonings brand,” Mr. Simon said. “It’s one of our biggest brands; it’s one of our most profitable brands.

“Our big thing is how we skew the Celestial Seasonings brand up to a younger consumer, and that’s where our new packaging and some of the new products are. But I think if you come back and look at tea today, we love to steep our own tea from bulk and consumers still love teabags. But herbal tea is where the growth is and wellness tea, not black teas.”

To grow the brand further the company must consider additional options, most notably the single-serve category and K-Cups, Mr. Simon said. He called the tea K-Cup category “dismal.”

“If you come back and look at the K-Cup category and its growth, tea has not got its share of it,” Mr. Simon said. “Millennials are a big part of that. We need to be controlling that, and we are in the midst of trying to do some things there to make that a bigger part of Celestial Seasonings.”

On the acquisition front, Mr. Simon said his focus is outside of retail.

“If there was an interesting acquisition out there for food service, that is where we would focus on,” he said.
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