Swiss packaged food conglomerate Nestlé is just one of the companies considering acquisition of US organic and natural food giant Hain Celestial. A sale of Hain Celestial has been rumoured since their profits dropped nearly 70% in 2016 from $165-million to $47-million, although they reported a rise in 2017 to $67-million.
Hain Celestial has struggled in the past year after reporting it found irregularities in previous revenue reports and may be seeking a sale as the solution to their challenges.
Nestlé, the largest food company in the world with branded products that include chocolate, candy confections, baby food, pet food, and an assortment of snack foods, reported a profit of $8.8-billion in 2016 on sales of $89.46-billion. In spite of what sounds like great news, Nestlé has lagged behind its competitors in sales growth with critics suggesting they have not moved fast enough to accommodate consumers’ increasing demand for healthier fresh and natural food alternatives and less packaged foods.
Back in June activist investor Daniel Loeb acquired a $3.5-billion stake in Nestlé and it is thought he may be leading the push to adapt to the changing tastes of consumers for natural brands and which may include the sale of its US confectionary brands, frozen foods such as Lean Cuisine, or its cosmetics brand L’Oreal.
Analysts believe that Nestlé may wish to acquire Hain to add more natural food brands to its portfolio and that the move could be good for both companies. Hain’s Earth’s Best and Ella’s Kitchen organic infant nutrition brands could fit well with Nestlé’s Gerber baby food line, while Nestlé’s dairy brands such as Carnation and Coffee-mate could soon include the addition of Hain’s plant-based non-dairy beverages such as Rice Dream.
Other companies interested in acquiring Hain Celestial include General Mills, PepsiCo, Coca-Cola, and Kellogg.
