Hain learns tough lesson with tea revamp

by Monica Watrous
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Hain Celestial Celestial Seasonings tea new packaging
Hain's refreshed Celestial Seasonings tea packaging failed to resonate with consumers.

LAKE SUCCESS, N.Y. — Efforts to revitalize the Celestial Seasonings tea brand with modern packaging admittedly failed to meet expectations of the Hain Celestial Group, Inc., which said May 4 it plans to return to its classic packaging for the upcoming tea season.

“We invested in this year to drive consumer awareness of our new Celestial Seasonings package with … shelf signage in store, shopper marketing program, social media and reduced pricing,” said John Carroll, executive vice-president and chief executive officer of Hain Celestial North America, during a May 4 conference call with financial analysts. “Response to all this activity, quite frankly, was disappointing as Celestial Seasonings’ bagged tea dollars sales trends did not improve in Q3. Our research and consumer contacts told us that our core consumers were confused by our new package and in some instances chose another brand of tea.”

Hain Celestial had redesigned the packaging a year ago to resonate with millennials, who are “big tea users,” said Irwin Simon, founder, president and c.e.o. of the Hain Celestial Group. As he explained during a presentation last September, “I think they looked at Celestial maybe as their father’s Oldsmobile.”

However, the contemporized tea packaging failed to appeal to new and core consumers, prompting a decline in sales for the brand during the recent quarter.

Hain Celestial Celestial Seasonings tea old packaging
Hain plans to return Celestial Seasonings to its classic packaging by September.

“We will transition to the classic package on shelf by September and reclaim our lapsed users with an impactful tea season support program,” Mr. Carroll said. “We are excited about this decision because we believe it will help us recharge our Celestial Seasonings business.”

Added Mr. Simon: “Just getting back to flat on tea is a big move in our growth, and we will invest in that, and tea is a big category, an exciting category for us.”

But restoring growth in the tea business is more than just a simple packaging swap, Mr. Simon said.

“Package is just the starting point,” he said. “It’s reminding people why they buy Celestial tea, the strong emotional relationship they have with the brand. This is not just another brand of tea. When we talked to people about the package and the brand, they told us stories about the brand. How it was intertwined in their lives that could bring you to tears. We need to make sure that we get the package right, take that out of the problem and then, from there, market on top of it.” 
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