Food Business News - November 17, 2015 - (Page 10)

Hain earnings surge; U.S. grocery sales disappoint LAKE SUCCESS, N.Y. - Overall, fiscal 2016 got off to a good start for The Hain Celestial Group, as net income in the first quarter ended Sept. 30 increased 66% to $31,302,000, equal to 30c per share on the common stock, up from $18,855,000, or 19c per share, in the same period a year ago. Net sales also were higher, rising 9% to $687,188,000 from $631,257,000. But looking inside the numbers, the first quarter was a disappointment for the company's U.S. business, particularly Hain Grocery, company executives said. Net sales at Hain Celestial U.S. totaled $331.2 million in the first quarter, down nearly 5% from a year ago. "The Q1 net sales shortfall was driven primarily by one, natural channel consumption softness; two, unprofitable year-ago baby and nut butter club programs that we chose not to repeat; three, lost sales and inventory from distributor and account shifts; and finally, currency on Ella's Kitchen U.K.," John Carroll, executive vice-president and chief executive officer of Hain Celestial North America, said in a Nov. 5 conference call with analysts. "These four factors MaraNatha and Spectrum were two brands blamed for disappointing quarterly U.S. sales at Hain. cost us approximately $16 million in Q1 net sales." Mr. Carroll said adjusted operating income for Hain Celestial U.S. was $46.6 million in the first quarter, down 11% from a year ago, and adjusted operating income margin was 14.1%, down 100 b.p.s. versus a year ago. The top-line sales and income shortfall, Mr. Carroll said, could be traced back to two brands: MaraNatha and Spectrum. "The (MaraNatha) business is still recovering from last year's voluntary recall, specifically in regards to the loss of almond butter sales velocity, peanut butter distribution and private label losses, which was a business that did total $20 million in annual sales for MaraNatha prior to the recall," Mr. Carroll explained. "So we're going to attack these issues by first, strategically reducing our products on shelf to eliminate or reduce competitive price deltas and increase MaraNatha sales velocity. "We're also going to be offsetting peanut butter losses with innovative new products like our new - and we're going to be the first to the market with this - our new no-added sugar or added salt almond butter, which we're going to be launching very shortly. And we're also looking to recapture our lost private label customers, one of which we've already gotten back. They account for 20% of the pre-recall private label business and we'll start shipping to in spring 2016. "So these initiatives, coupled with our new seethrough label on MaraNatha packaging, which highlights our quality, should restart our MaraNatha business and drive higher volumes through our plant and reduce our costs." Turning to Spectrum, Mr. Carroll said the brand is getting attacked by lowerpriced competition in the coconut oil segment, which accounts for about 40% of Spectrum's business. "This is another category where we're going to need to address this issue by strategically lowering prices on shelf at key customers to eliminate or significantly reduce competitive price deltas," he said. "We also, though, are going to work to more strongly communicate particularly on shelf, Spectrum's superior product quality. We clearly sell a superior quality coconut oil and we're not leveraging that strongly enough. So those MaraNatha and Spectrum growth initiatives will be implemented this month to drive accelerated second-half growth." FBN Local promotions set to sizzle as a menu trend WASHINGTON - One word - local - may sum up an expected top trend in restaurant promotions and menus next year. Three of the top four items in a food trend list released Nov. 5 by the National Restaurant Association had local ties. Locally sourced meats and seafood ranked as the No. 1 food menu trend in 2016. While chef-driven fast-casual concepts came in No. 2, locally grown produce and hyperlocal sourcing came in No. 3 10 FOODBUSINESS NEWS ® and No. 4, respectively. The Washington-based restaurant association surveyed 1,575 American Culinary Federation members in September to compile the list. When asked which food trend had grown the most over the past decade, 44% of the chefs said local sourcing, which ranked first and ahead of second-place gluten-free cuisine at 21%. When asked which culinary trend will be the hottest menu trend in 10 years, 21% said local sourcing, which ranked second behind environmental sustainability at 41%. The survey asked the chefs to rate 221 items as "hot trend," "yesterday's news" or "perennial favorite" on menus in 2016. Chef-driven, fast-casual concepts was a top trend. Fried chicken was the No. 1 perennial favorite, and insects was the item most mentioned as "yesterday's news." Menu items that gained since last year's survey included African flavors, authentic ethnic cuisine, ethnic condiments/ spices, house-made/artisan soft drinks, Middle Eastern flavors and non-traditional liquors. Menu items that lost momentum included underutilized fish, kale salads, fresh beans/peas, gluten-free cuisine, quinoa and flower essence in cocktails. For more on the survey, go to News-Research/Research/ What-s-Hot. FBN November 17, 2015

Table of Contents for the Digital Edition of Food Business News - November 17, 2015

Food Business News - November 17, 2015
Starbucks becoming a ‘food destination’
Sugar, corn sweetener court battle under way
Beverage Business News - Redesigning fruit juice
Table of Contents
Web Contents
Editorial - Climate change takes center stage in Paris
Hain earnings surge; U.S. grocery sales disappoint
Local promotions set to sizzle as a menu trend
Smucker focuses on redefining the coffee experience
Kraft Heinz integration showing progress
Credit Suisse lowers Dean Foods’ stock to ‘underperform’
Dean Foods betting big on DairyPure brand
Food waste reduction 2.0
TreeHouse Foods to acquire ConAgra’s Private Brands business
Efficiency gains drive TreeHouse earnings
Seneca acquires largest maraschino cherries maker
Popchips names new c.e.o.
Amazon dips foot into food delivery in L.A.
Schwan simplifying ingredient list across entire product line
Washington - Producer groups begin to take sides on T.P.P.
Ingredient Innovations - High-oleic options
Health and Wellness - Targeting bone and joint health
New Menu Items
Ingredient Market Trends - U.S.D.A.’s Crop Production and WASDE reports bearish
Ingredient Markets
Supplier Innovations and News
Ad Index

Food Business News - November 17, 2015