Hain Celestial’s Greek yogurt brand Greek Gods has been shielded from the price wars raging in the Greek yogurt category and continues to go from strength to strength, with sales surging by 35% in the latest quarter, say bosses.
Asked about pricing pressure in the increasingly crowded Greek yogurt fixture on the firm’s Q1, 2013 earnings call last week, Hain USA CEO John Carroll said Greek Gods was not competing in the same part of the market as Dannon, Yoplait and Chobani.
They're all fighting in the 6-ounce place and moving price points way down
He told analysts on the call: “The price dealing is happening on low-fat Greek yogurt in 6-ounce cups. Greek Gods is a higher-fat, indulgent product sold [mainly] in 24-ounce cups and also used as an ingredient in Mediterranean diets.
“This has always been a key differentiating point for this brand… so we feel pretty comfortable with our positioning.
“We don't see anybody coming out directly at us. They're all just fighting in the 6-ounce place and moving price points on 6-ounce way down. “
Greek Gods set for UK debut in 300 Sainsbury’s stores this month
The Greek Gods brand, which was turning over $12m when Hain acquired it in summer 2010 and is now generating more than $100m on an annualized basis, is also expanding into new product areas, with a new low fat, high protein kefir probiotic smoothie singled out as one of four new products “that have gotten the strongest response”, said CEO Irwin Simon.
Greek Gods is also set to “become much more of a major brand within Hain” as it makes its UK debut in 300 Sainsbury’s stores in the UK this month ahead of a national UK rollout in the spring, and continues to perform well in Canada, he added.
Demand for nut butters has rocketed post the Sunland recall: We just can't keep up with demand
Other brands demonstrating significant promise include the MaraNatha nut butter brand, which has seen a surge in demand following the Sunland peanut products recall, he said.
“With the Sunland issues - which we are not part of, remember, we produce our own product - there is a ton of demand for nut butters. So we are scrambling to get as much as we can.
“As a matter of fact, we pulled promotions on nut butters… to realign our supply and our demand. We expect that it will probably take until the third quarter to get back. We just can't keep up with demand.”
We continue to be very bullish about our US business
While some of the biggest packaged food brands have suffered volume declines in the US and Europe, Hain Celestial has generated strong growth on both sides of the Atlantic, posting a 15% rise in operating income to $36.5m on sales up 25.4% to $359.8m in the three months to September 30 (Q1, 2013).
“We continue to be very bullish about our U.S. business”, said Carroll, who said growth had been bolstered by “significant distribution wins” with Kroger, Publix, Wakefern, Wegman, Walmart, Target, Whole Foods, Earth Fare and Sprouts.
Hain has also increased production capacity on its MaraNatha nut butters by 20% and Earth's Best organic babyfood pouch lines by 50%, where demand outstripped supply, he said.
Top UK chilled soup brand New Covent Garden to be test marketed in New York City
Meanwhile, feedback on the first wave of new launches for fiscal 2013 had been encouraging, said Simon.
“We're on schedule to introduce over 100 new products, leveraging the hottest emerging trends across our key product categories.
To date, the new products generating the strongest response were Celestial Seasonings' Sleepytime Snooz Natural sleep shots; Greek Gods low fat kefir; and gluten-free café bake mixes, hot cereals and pancake and waffle mixes, he said.
“And finally, we're going to be introducing the New Covent Garden refrigerated soups - the UK’s leading brand of chilled soups - into a limited test market in the New York area as a prelude to a wider expansion in Fall 2013.”
Prop 37: We come out a winner no matter what
Asked about Californian GMO labeling initiative Prop 37, he said: “It’s important to identify where there is GMOs or not and we do that on our products.
“But whatever happens [in the Nov 6 vote on Prop 37], there's just a lot of attention brought to and a lot of notice and I think you're going to see a lot of more states follow on here and maybe different language within the bill.
“But today, I sit here and say we come out a winner no matter what because 98% of our products are GMO-free.”
Click here to read about Hain’s plans for new raw juice cleanse brand BluePrint