Hain Celestial: Getting the Facts Straight
Given some of the posts on this subreddit regarding Irwin Simon's history, I thought it worthwhile to dig a bit deeper into Hain Celestial.
WARNING: This is a longer post (for those who are critical of the length of my posts, stop reading now and move on).
NOTE: This does not paint an entirely positive picture of Mr. Simon. That being said, my conclusion is I would think he learned a valuable lesson about buying too many brands and the dangers of having too many SKUs, some self-competing.
Perhaps Tilray is his do over and a change to make things right?
Here we go:
CNBC - 22 Jun 2017
Hain Celestial founder and CEO Irwin Simon on Thursday sought to reassure weary investors even as a lengthy accounting probe cleared the company of wrongdoing but failed to help its battered stock price.
Weighing on the shares is a weak outlook provided by management. Nonetheless, the chief executive was upbeat on the company’s future and also saw a silver lining in Amazon’s planned purchase of Whole Foods.
“Now is the time to move on and build our business and take it to the next level,” Simon said in an interview Thursday on CNBC’s “Squawk Alley.”
The CEO said the company completed the accounting review and audit process and found there was “no material change” to previously reported financials. He called it “a great outcome.”
MY CONCLUSION: Some have indicated in previous posts that Irwin Simon is a crook. An accounting probe on Hain Celestial actually cleared the company of wrong doing, BUT, the damage was done and stock price suffered. Amazon or Whole Foods never did buy Hain Celestial. Nestle was in talks, but felt there were too many brands.
New York Post - 4 Jan 2018
The Hain Celestial Group cannot find a buyer for the $4.2 billion market-cap company — despite being informally for sale for roughly a year, four sources familiar with the situation told The Post.
Founder and Chief Executive Irwin Simon built his New York organic-foods powerhouse to ultimately sell it, sources said, but failed to find a buyer because he expanded the company to include too many brands, the sources said.
No one brand is large enough to entice a suitor to pay Simon’s asking price, sources said.
Simon on Thursday declined to say whether Hain has been informally for sale but conceded that a public company like his is always available at the right price.
Hain, best-known for brands like Celestial Seasonings teas, Terra chips, Garden of Eatin’, Rudi’s and Earth’s Best, also has a stable full of lesser-known brands that represent a significant number of sales.
MY CONCLUSION: Irwin Simon acquired too many brands under Hain Celestial. This is something I am keeping an eye on with Tilray. I sincerely hope he learned his lesson at Hain Celestial and will find the right balance between expansion versus over-expansion. It would be nice if someone were to ask that question at the next Q-Call.
It's time for Irwin Simon to indicate how it will be "different" this time and not making the same error of over extension.
25 Jun 2018 - CNBC
Hain Celestial announced Monday that Irwin Simon is stepping down as CEO, a quarter of a century after he founded the organic food company.
Hain is working with an executive search firm to fill the post, and when a candidate is selected Simon will move on and become non-executive chairman.
The announcement comes as the owner of Terra Chips and Earth’s Best baby food is under pressure from activist investor investor Engaged Capital, which previously disclosed a 9.9 percent stake. A settlement with the firm in October put Engaged’s founder, Glenn Welling, on the Hain board.
Shares of Hain closed up 0.5 percent Monday, giving it a market capitalization of $3.23 billion. Year to date, shares of the company have fallen roughly 29 percent. It had a 52-week high this past July of $45.61; today it trades at $29.89.
It is likely to once again raise speculation about a potential acquisition of the company. Rumors and potential suitors have swarmed Hain for years, but the company owns a number of different businesses — from tea to meat — making it a hard match for a single suitor.
Simon, meantime, is viewed as having the keys to the company’s complexities, as the singular person to have overseen its many deals. That knowledge stronghold had made potential buyers cautious, sources have told CNBC.
Hain has sought to streamline its businesses and is currently in the process of selling its protein unit. Still, the sale of the unit, which includes Plainville Farms poultry and FreeBird Chicken, faces challenges. Like the rest of Hain, the brand can no longer rest on the fact that it is organic as its stand-alone draw to shoppers. The organic food industry has become more crowded in recent years, thereby also making it more competitive.
Meantime, Simon’s departure adds one more to the ever-growing number of food company CEOs who have left their roles in the last few years, as pressures on the food industry continue to squeeze the country’s largest food companies. Simon had been the second-largest tenured packaged food company CEO, a position now held by Conagra Brands CEO Sean Connolly, who joined the company in 2015.
MY CONCLUSION: Like Hain Celestial, Tilray is acquiring a lot of businesses. I am also beginning to wonder if Mr. Simon is in the process of trying to sell Tilray (like he tried to do with Hain Celestial); or will history repeat itself and an organization like Engaged Capital try to buy 9.9% of Tilray and oust Simon and Merton? I am keeping an eye on volume of shares being traded. I would tend to think if someone was acquiring shares the share price would actually be going up. Perhaps Irwin Simon is waiting for S3 hearings this summer. If those hearings go well maybe Tilray would get acquired by a Constellation or Diageo? Will Simon seek to sell the company? He was trying to get 4B for Hain Celestial...I would let my shares go for 4X Friday's close!! Note: That was sarcasm, there is no comparison between Hain Celestial's market cap and Tilray's.
11 Nov 2025 - The Food Institute
In 1992, Irwin Simon, a veteran of Haagen-Dazs and Slimfast, set out on his own. As he recounted in a 2020 interview, he bought four separate businesses in the health food category, merged them, and took the new company public in a tiny offering. By mid-2015, Hain stock had returned well over 4,000%, and Hain had become one of the biggest players in organic and natural food. Its portfolio of brands including Celestial Seasonings, Garden of Eatin’, and gluten-free manufacturer Rudi’s — among many, many, others — drove $2.7 billion in revenue in fiscal 2015.
The seven-plus years since Simon’s departure, however, have been brutal.
Hain stock has collapsed; incredibly, shares are now in the red across their 33-year history. In 2016, an accounting issue scared off investors and eventually led to a rebuke from the Securities and Exchange Commission. Simon departed in 2018 and would soon enter the cannabis industry; according to multiple reports he had tried, and failed, to sell Hain in the years prior. Three successive CEOs have tried, and mostly failed, to stem the decline in Hain’s profits and stock price.
Simon’s acquisitive strategy — Hain incredibly bought 55 businesses across 25 years — worked at first, when Hain largely had the better-for-you category to itself. But as former CEO Mark Schiller noted at a 2018 Investor Day, new entrants arrived, and the management teams in place following Simon’s departure simply weren’t efficient enough to compete.
MY CONCLUSION: Hain Celestial did not work out well in the end. I am banking on Irwin Simon having learned a few things about striking the right balance between acquiring companies to take advantage of synergies and acquiring too many companies thus creating a situation where you go into competition with yourself. I cannot help but conclude Mr. Simon is setting Tilray up for a sale; if so, it is imperative he not put Tilray into a situation where there are too many companies under its umbrella.
I hope someone queries this at the next Q-call.
FINALLY: My next task will be to dive into how many companies/brands Tilray has acquired since Irwin Simon became CEO. I suspect it is around 15 or so. Let's hope it is nowhere near the 50 brands he acquired while at the helm of Hain Celestial. That was clearly a mistake.