In fiscal 2018, analysts expect Hain Celestial’s (HAIN) sales to grow 4.9% to $2.99 billion. Hain Celestial has projected sales of $2.97 billion–$3.04 billion, reflecting a 4.0%–6.0% gain YoY (year-over-year). The company expects initiatives such as acquisitions, brand building, and SKU (stock keeping unit) optimization to drive its top line.
Focus on organic and e-commerce
According to Technavio, the organic food and beverage market is expected to grow at a compound annual rate of 14% between 2017 and 2021. As health consciousness rises, more shoppers are prepared to pay a premium for organic food. The demand for all things organic, ranging from meat to vegetables to personal care, has grown. More importantly, organic food sales have grown along with online shopping. Millennials are more inclined towards organic food and more comfortable with online shopping.
At the CAGNY (Consumer Analyst Group of New York) conference on February 21, 2018, Hain Celestial discussed the huge opportunity presented by organic food sales. For online food shoppers, “organic food” is a key search term. The company also added that ~40% of consumers are expected to increase their digital shopping frequency. Hain said that research company IRI expects online consumer product sales to grow to 10% ($874 billion) of total consumer product sales by 2022. The company emphasized that it is poised to gain from the growth in the organic food market, as it has 24 leading organic brands around the world.
The company is also investing in e-commerce. During the company’s fiscal 2Q18 earnings conference call, Hain Celestial CEO Irwin Simon stated that US e-commerce sales stand at ~$80.0 million. Simon stated that online grocery spending could reach ~$100.0 billion over the next five to seven years as ~70.0% of buyers turn to ordering groceries online, citing findings from Food Marketing Institute and Nielsen. Organic food is in high demand online, driven by Millennials.