- Hain Celestial Group, Inc. has launched Cultivate Ventures, a strategic platform committed to investing in incubator opportunities, lifestyle brands and smaller portfolio brands and concepts, according to a company statement.
- Cultivate will incubate fledgling acquisitions that could profit from the company's large scale infrastructure and add to net sales and margin growth until they are large enough to be included with the company's larger brands.
- Hain Celestial expects Cultivate brands to need investment and predicts neutral earnings contributions for fiscal year 2017.
Cultivate Ventures' launch comes in the midst of a fiscally tumultuous period for its parent company. Hain Celestial's share price has dropped significantly since the company announced it would delay the release of its fourth-quarter and full-year earnings in August, nose-diving from a $53.40 share price to $37.25.
Hain will have to wait out the rest of fiscal 2016 to see how badly the delay damages its final numbers, but it appears that by starting Cultivate Ventures right now, the company is trying to salvage its growth-driven narrative. Strategic acquisitions have been a key component of the company's past growth, reflective of a leap in food industry mergers and acquisitions in 2015.
It's unclear whether this new undertaking will spin public perception of Hain's fiscal uncertainty. The Cultivate platform is positive press, however, as more manufacturers seek out food startup investments and acquisitions to expand their portfolios.