Hain Celestial FY 2Q16 Earnings Call Notes

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The Hain Celestial Group’s (HAIN) CEO Irwin Simon on Q2 2016 Results

Social media is not the most expensive way to reach consumers

“It’s not that our spending — like we are a traditional consumer packaged goods company. Our consumers are focused on social media, on Facebook and SnapChat and all this. And it’s not the most expensive way to advertise. But we have so many great things to be telling about our brands that we need to get out there and just tell more and more about it.”

We do have to spend more, so we’re hiring consultants to tell us how

“Do we have to spend more? Absolutely. And it’s not only us; it’s every company out there that has to spend more. And that’s why we will work with Boston Consulting Group. Let me tell you something. I never wanted to work with consultants because I used to say, if we didn’t know what we were doing, then who else does? But I’ve got to tell you, like anything, I’ve changed too in how we look at things differently.”

Perimeter of the store growing much faster than the center

“- as we look where — as we are diversified in a lot of categories, it’s the perimeter of the store where you are seeing a tremendous amount of growth versus the center of the store. And as we sit with the center of the store and you talked about baby food, baby food is moving into fresh. Baby food — in Earth’s Best, what we have done with brands like Earth’s Best, we’ve taken it bigger into the frozen category, bigger into the fresh category. And we have been able to expand Earth’s Best into multiple categories.”

Retailers are trying to figure out how to save the center of the store

“listen, whether it’s Whole Foods or other retailers, they don’t want the center of the store to die. So they are all looking for innovation and working with us on innovation there.”

John Carroll

We bought some things that don’t belong in the conventional channel

“Sure. So David, what we think it was, was that we brought some brands that, quite frankly, shouldn’t go into the conventional channel. And that’s part of what Irwin talked about before. So, as we looked at it, there were some soup SKUs that really did not belong in that category and went in and washed out in a year’s time. So, that’s why our whole focus is — look, let’s focus on the top 500 items. We know they turn. We know they get traction. This way, you are not wasting your slotting and more importantly, you have got a better selling case. We actually are pulling back from some of the new items that we are showing to the conventional channel because, quite frankly, they — we owe it to them to prove out those items before we bring them into them. So, again, that’s why the whole thrust is to focus on the top 500 SKUs.”