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The Hain Celestial Group F2Q08 (Qtr End 12/31/07) Earnings Call Transcript

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2008-02-04 18:30:38.0

Tags: Hain Celestial Group Inc.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Scott Mushkin with Banc of America. Please proceed.

Caroline - Banc of America

Hi, guys. This is actually Caroline calling in for Scott. I just had a question about kinds of opportunities that you're seeing in the mass channel. I know you mentioned improvement with the Celestial brand. But in general, I think, especially in the center store are you seeing additional opportunities for the Grocery and Snack category and could you talk about may be some initiatives that you're having to continue to drive sales through to the mass channel?

Irwin Simon

Carolyn I'll start it and then John can jump in at any time. I think there's a couple things here. Certain categories and certain product lines will grow from an [macro] section to the main isles. So that's the number one. And I've said it before when we see a product and we'll overcome the [macro] section of the main isle, we see it increase four to six times in sales and this Natural Organic becomes a bigger part. Retailers are looking at that today and meeting with a lot of retailers, that's something high on their list. So, that's number one.

Number two, more and more products hit the store as there is major, major demand. And there's a lot of retailers out there Caroline, where we only had products in half the stores and they are looking now to brining them in to all their stores. So, if we look at four or five of those and we look at them as a $5 million opportunity, that's a $20 million opportunity for us and there is quite alot of them out there as they get on the line with Earth’s Best, Earth’s Best Sesame Street, as they look at Terra Chips, as they look at Spectrum [versus one] that 80% Spectrum went through natural food stores and we expand that more and more into Grocery. Our Imagine Soup business coming [out of] natural section going over to soup [buyers], Earth’s Best coming over into the baby food oil.

What I must say today is Earth’s Best is the number one organic baby food out there today where at one-time 85% of Earth’s Best was only sold in natural food stores. So just by sheer numbers of stores, our sheer number of products, and the big opportunity for us Caroline also which you heard before, I was saying is logistics wise, what retailers are looking for is, how I deal with one supplier, how do I take cost out of this business and how I do it much more efficient and much more effective. And there are tremendous things that we’re doing in regards to [LTF] or truckloads, backhauls with our partners and retailers and our vendors out there. Particular costs but to sell them more products, and to replace other products out there with some of our brands. I hope that answers your question.

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