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How Is Hain Celestial Group Advancing with Its Project Terra?

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What is Project Terra?

In November 2015, Hain Celestial Group (HAIN) initiated Project Terra. The project was aimed at confirming the company’s growth opportunities and simplifying the business by identifying cost savings opportunities. Related to this project, the company has identified ~$5 billion in global cost savings, which it expects to realize by fiscal 2020.

To fund Project Terra, Hain Celestial is shifting investments toward its greatest brand potential. It has appointed Jim Meiers, the company’s chief supply chain officer in the United States, to be the leader of this project. The company is also raising the total investment in its business through worldwide savings efforts of ~$100 million.

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How does Hain Celestial plan to drive growth?

To drive accelerated net sales and margin growth, the company plans to establish five strategic platforms within the Hain Celestial US segment beginning in fiscal 2017. The five platforms are mentioned in the chart above. These platforms were determined by common consumer need and will apply globally. These strategic platforms depict distinct opportunities for incremental growth and margin improvement associated with consumer demand.

Additionally, the company is planning to launch Cultivate Ventures (Cultivate), a venture unit. The objectives of this unit are as follows:

  • to strategically invest in the company’s smaller brands in high potential categories
  • to invest in concepts, products, and technology that will focus on health and wellness
  • to incubate small acquisitions until they reach the scale for the company’s core platforms

The company also identified certain brands representing ~$30 million in sales that no longer fit into its core strategy for future growth, and HAIN intends to sell these as a group.

Competitors

Hain Celestial’s competitors in the industry include ConAgra Foods (CAG), TreeHouse Foods (THS), and Kellogg (K). CAG and THS saw net earnings of $205 million and $16 million, respectively, in their last quarters. Kellogg saw earnings of $280 million. To gain exposure to CAG, you can invest in the First Trust Large Cap Growth AlphaDEX Fund (FTC).

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