Dive Brief:
- Hain Celestial reported Monday record net sales of $752.6 million for the second quarter, an 8% jump year over year.
- The company's net income surged 28% to $56.9 million.
- Hain reiterated its fiscal 2016 forecast of $2.90 billion to $3.04 billion for total net sales, about a 7% to 12% increase over fiscal year 2015, but that forecast had been lowered last month from the previous $2.97 billion to $3.11 billion guidance.
Dive Insight:
Doing well may not be good enough for the natural and organic foods and beverages producer. The company's first fiscal 2016 quarter earnings, reported in November, included a 9% sales gain, which ended 20 quarters in a row with double-digit sales growth. In other words, Hain has what The Motley Fool called a "high-class" problem.
Though Hain was once one of the few major players in the natural and organic foods space, these categories are now saturated with competitors both large and small. Startups and smaller companies are increasing in number exponentially as barriers like access to capital are lowered by food-focused investment companies, such as General Mills' 301 Inc., Edible Ventures, and CAVU Venture Partners. Losing market share in any one particular segment isn't as damaging for Hain as it might be if the company only manufactured Celestial Seasonings tea or only Terra brand snacks.
One key area for Hain's growth has been through strategic acquisitions. Mergers and acquisitions in the food industry have skyrocketed in the past year. But Hain CEO Irwin Simon assured that restraint and discipline would continue in future M&A deals, something any manufacturer should consider right now. Simon said at a conference, "We will not do an acquisition just for synergies. We will do an acquisition for growth."