New wave of conventional retailers wants natural, organic, non-GMO

Elaine Watson Food NavigatorMay 11 2015

Speaking to analysts after posting an 18.9% rise in net sales to $662.7m in the three months to March 31 (net profit dipped 5% to $33.4m) US chief executive John Carroll said retailers are increasingly looking to work more closely with companies that can deliver growth by supplying them with fast-growing natural & organic brands that appeal to Millennials.

And while Target, Publix and Kroger have been very vocal about plans to devote more space to these products, a ‘second tier’ of conventional retailers is now looking to secure a serious slice of the action as well, creating big opportunities for Hain Celestial, he added.

For example, Hain is now working with Hy-Vee and Meyer (“an account that we barely had any interaction with two years ago”) to develop a natural and organic strategy, he added: “We’re now seeing beyond Kroger, beyond Publix, a whole second tier of conventional retailers… say, Look, this trend is for real. It’s key for us to attract Millennials that we play in this area, and we need some help working our strategy.”

Group CEO Irwin Simon added: “Millennials, in particular, are increasingly health conscious and are making product choices based on their lifestyle with an emphasis on farm to table, organic, natural, free from ingredients.”

Retailers want growth, and CPG giants like Heinz and Kraft are not delivering it

And while leading CPG brands are reformulating many iconic products to make them more appealing to Millennials, as well as ruthlessly cutting costs to drive efficiencies, they are not delivering growth for retailers, he claimed.

“I think this merger between Kraft and Heinz woke a lot of retailers up… A retailer is not going to get the benefit of a Heinz-Kraft merger and EBITDA savings… He gets the benefit of a growth number. Retailers want growth.”

Where the big, big demand is, is GMO-free

They also want more non-GMO options, and Hain is particularly well-positioned to cash in – unlike most of the biggest food and beverage companies, he claimed: “99% of our food products don’t contain GMOs. Over 500 of our products have been verified, and over 650 are enrolled in the non-GMO project verified program, with a lot more to come.

“We also have over 500 gluten-free products today. So we have the products, we have the brands. We have the manufacturing, we have the distribution. We are ready to go.”

He added: “We sell organic products… gluten-free products and… natural products. [But] where the big, big demand is, is GMO-free.”

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