- Kevin McGahren is Hain Celestial's new president of North America, according to a company statement. His responsibilities include leading the company's North American teams, which oversee marketing and research and development.
- McGahren has more than three decades of food industry experience. He comes to Hain Celestial from Dancing Deer Baking Company, where he was CEO. He also was president of the American Beverage Corporation and president and founder of PANOS brands, an organic and specialty company selling ethnic, dairy and gluten-free products.
- Earlier in his career, he had several leadership positions at the former Kraft Foods, including vice president of marketing for Nabisco Cookies.
Hain Celestial could be on its way to a turnaround, and CEO Mark Schiller is hiring the people who he thinks can help get the company back to where it should be. Schiller, a former Pinnacle Foods exec who has only been on the job for six months, told investors in an earnings call last week that he was restructuring the natural food company's North American operations to be more efficient. Part of that, he said, is bringing in new executive talent. Counting himself, there have been six new execs in the last six months.
"We're building a world-class team with core skill sets that are well aligned with our transformation journey," Schiller said on the call.
The company's transformational journey is largely driven by a push to simplify Hain Celestial's portfolio — a number of diverse brands, some of which have low performing or unprofitable SKUs. Schiller also wants to strengthen what the company holds on to, reinvigorating its top-line growth through a core set of brands and expanding margins.
By hiring McGahren, Schiller has brought in someone with experience in reinvigorating a company that found itself in a tight spot. He became president of American Beverage Corp. in 2009, as its parent company Royal Wessanen was working to sell it off.
According to a 2012 article in Smart Business, days after taking the helm of the company, McGahren realized it had no long-term plan — everything was targeted toward improving quarterly earnings results. In fact, mismanagement had left the business with no reliable financial figures, no indication of what worked and little communication between executives and staff. To figure out how to get the company in order, McGahren told the magazine he spent three to nine months figuratively taking the company apart and putting it back together.
“It was very clear to me from day one that it wasn’t a situation where we could just cut our costs," McGahren told Smart Business. "It was about fixing the business and growing out of it. I believe all sustainable growth begins with a thorough knowledge of target consumers combined with engaged employees who have full access to information and the necessary tools to do their job — such as clear priorities and budgets — and none of those conditions existed.”
While there has been no indication of those kinds of deep problems at Hain Celestial, the company has had its own share of issues. In August 2016, the company delayed its earnings report because of accounting irregularities. It settled charges related to these issues with the Security and Exchange Commission in December. The natural products powerhouse also fell under control of activist investor Engaged Capital, and has been viewed as a perpetual takeover target.
The company has been trying to claw its way out of a financial hole for years. In its most recent earnings report released last week, Hain Celestial is firmly in the red. Net sales decreased 5% when compared to a year earlier, tallying at just under $600 million. In the U.S., even when accounting for the company's SKU reduction program, sales were still down 2%. Operating income was $17.1 million, almost a third less than a year before. And while this is an improvement compared to large drops in the previous two quarters, it still isn't where the company wants to be.
Some moves that may help get the company back on track are in the works. Hain Celestial announced last week that it had sold its WestSoy tofu business and had entered into an agreement to divest its Hain Pure Protein poultry division.
However, there's still a long way to go in getting its North American business reorganized. If anyone has the necessary skills for that, it seems to be McGahan. There are ample processes to streamline and tough decisions to make.
The question is whether McGahan — as well as the new Senior Vice President of Research and Development Jeff George, Chief Supply Chain Officer Jerry Wolfe, Chief Customer Officer Chris Boever and Chief Human Resources Officer Robert Gulliver — will be able to do what is needed. But by building this stable of CPG experience, it looks as if Schiller is aiming to improve Hain Celestial — but whether that is for an eventual sale or as a standalone entity is very much uncertain.