Leading In a Healthy Direction
By JAMIE POPP
The Hain Celestial Group Inc., with headquarters in
Melville, N.Y., is a force to reckon with in
the beverage industry. With leading brands such as Celestial Seasonings,
Soy Dream, Rice Dream and WestSoy, the natural and organic foods company,
under the direction of Chief Executive Officer Irwin D. Simon, is not
afraid to experiment with ingredients. It continues to discover ways to
innovate teas, soy milk, rice milk and juices. From using plant sterols in
its rice milk to introducing juices with lutein and debuting a multitude of
Celestial Seasonings tea varieties in between, Hain Celestial is connecting
with consumers both here and abroad.
Celestial Seasonings has been producing teas since the
1970s when founder Mo Siegel began making tea with wild herbs in the
foothills of the Rockies in Boulder, Colo., where today the company
continues to process tea. Working with friends, Siegel produced 500 pounds
of the first tea blend, which was sold to a local health food store. Starting the company in an old barn, the team
expanded its marketing and ultimately introduced herbal teas to a
nationwide market. It is this foundation from which Celestial Seasonings
gets its entrepreneurial spirit, venturing to create products that
routinely engage loyal and new consumers alike.
The days of processing tea in a barn have long passed,
and since 2000 Celestial Seasonings has been part of The Hain Celestial
Group’s beverage offerings. With a much larger marketing and sales
effort behind it than it had in the 1970s, Celestial Seasonings spent this
year capitalizing on the tea buzz due to heightened awareness of chai,
white, red, green, black and exotic-flavored teas. Celestial Seasonings
cited ongoing case sales growth during 2004 as proof that it is doing
Surpassing its traditional roots in the health food
category, the company has expanded its reach into channels such as
supermarkets, mass merchandise and drug, which contributed a 20 percent
increase in sales this year.
The 80 tea flavors produced today are developed in the
company’s onsite research and development laboratory. During 2004,
Celestial Seasonings was busy introducing tea flavors such as True
Blueberry, Perfectly Pear White, Madagascar Vanilla Red, Peach Apricot
Honeybush and two Women’s Wellness teas. It was also watching the
sales impact of introducing non-bag tea products, including Zingerade, a
blend of herb tea, lemonade and juices; TeaHouse Lattes and Chais; and Cool
Brew iced tea, tea bags specially formulated to brew in cold water.
But Celestial Seasonings is only part of The Hain
Celestial Group’s line of beverages. Last year the company acquired
Walnut Acres Certified Organic and Mountain Sun juice brands, and the Imagine Food’s soy and rice milks, and it
continues to expand in the natural beverage category.
This year, the company integrated three juice brands
into the mix. Walnut Acres Certified Organic was acquired in June 2003,
along with Mountain Sun, a line of functional juices that includes a
100-percent cranberry juice. These brands are undergoing packaging
redesigns and flavor enhancements as the company spruces up the juice side
of the business. It’s also getting ready to launch a 100-percent
blueberry juice under the Mountain Sun brand.
Earlier this year, Hain Celestial introduced
Earth’s Best Tots toddler juices, which are fortified with calcium
and vitamin C, in 4.23-ounce brick packs. The organic apple peach banana,
strawberry pear and apple juices for toddlers are an addition to the infant
line of Earth’s Best juices.
The non-dairy market has posed interesting challenges
for Hain Celestial during the past year. In addition to completing the
integration of Imagine Food’s Soy Dream and Rice Dream brands, which
successfully achieved cost and SKU reductions during 2004, the company
dealt with a decline in distribution for Soy Dream because of grocery
strikes in Southern California, one of its top markets. Additionally, the
company discontinued the WestSoy refrigerated line and limited distribution
of the refrigerated Soy Dream line.
While soy milk hit a few
bumps along the road, Rice Dream became a non-dairy star. Competing
successfully in the refrigerated section, rice milk provides an avenue for increasing consumer awareness of non-dairy
products. In addition, Rice Dream offers a variety of non-dairy beverages,
including HeartWise. HeartWise products provide key heart health benefits
through the use of CoroWise, a naturally sourced ingredient that may reduce
the risk of heart disease when consumed as part of a diet low in saturated
fats and chloresterol. The HeartWise innovation brings the heart-health
benefit associated with soy to Rice Dream.
Hain Celestial’s ethnic initiative is
highlighted by Rice Dream Horchata, which is being launched in January.
Horchata, is a traditional Hispanic rice-based drink. This is the
fastest-growing segment of the rice drink category, according to the
Although Hain Celestial’s soy milk brands have
struggled in the dairy aisle, they remain strong in shelf-stable aseptic
packaging. The company plans to grow its aseptic business by focusing on
Soy Slender and unsweetened segments of the line. These segments offer
no-sugar or sugar substitute soy milk for those consumers counting carbs.
Combined these two segments gained 2.8 share points during the latest
WestSoy continues to be a leader in grocery and
natural food store channels. Distribution in mass merchandisers such as
Wal-Mart, and creative promotions that involve
floor graphics in the refrigerated section that lead consumers to the
natural food aisle are ways the company is drawing attention to its variety
of products. The WestSoy soy milk line includes low-fat and fat-free
varieties of Soy Shakes; and specialty soy-based Soy Slender. Overall, the
brand continues to gain market share in grocery stores, and experienced a
sales increase of almost 4 percent during the past year.
Hain Celestial also is taking on the role of European
soy milk leader with its acquisition of Natumi, a German producer of
non-dairy beverages and desserts.
“Natumi will provide us opportunities to meet
the increasing demand from European consumers for non-dairy beverages, as
we combine our experience in this category with Natumi's excellent products
and management,” said Chief Executive Irwin Simon in a recent
“Natumi's modern production facility will
provide us with the capability for in-house production of its current
milk-free products, as well as our other non-dairy products that we
distribute into the European markets.”
Distributing the passion
Celestial Seasonings competes in many retail channels.
With the number of teas, non-dairy beverages and juices Hain Celestial
promotes in grocery, mass merchandise and natural food stores, competing
successfully requires a hearty strategy of variety and brand awareness. It
also involves staying true to the company’s core values of being
inspirational, with beautifully designed packaging, and maintaining a
leadership role in markets where it competes.
“Our mission statement says it best,” says
Steve List, president of Celestial Seasonings. “Our goal is to
profitably grow Celestial Seasonings’ market share by being the most
loved and frequently purchased specialty tea in all channels of
To create buzz about the company’s teas and sway
consumers to repeat purchase “It’s not enough to start with
strong brand equity,” says Cecilia
Atkinson, vice president of marketing. “You must keep it strong and
well-attuned to the consumer’s changing needs.”
Consumer trends revolving around convenience, health
and exotic flavors are high on Atkinson’s list of factors affecting
the tea category. With a large population of tea consumers abroad, a
growing group of tea drinkers stateside, and shifting consumer
demographics, understanding its core consumers is paramount to Celestial
“The heart of the tea demographic is 25 to 55
year old women, but this target continues to change as more and more
consumers look for healthier beverage alternatives,” Atkinson says.
“In the United States, 50 percent of the adult population drinks
specialty tea. Much of this growth can be traced directly to increased
awareness of the health aspects of tea.” Recent articles have touted
the benefits of white, green and black teas, and studies have underscored
the natural benefits of red and herb teas.
“Tea is the only beverage other than water that
consumers drink all day,” she says. “Our goal is to make
Celestial a part of every ‘day part.’ People who are heavy tea
drinkers often begin the day with a black tea, then switch to a green tea
in the afternoon, finishing with an herb tea before bedtime,”
according to Atkinson.
The marketing focus on tea being a beverage American
consumers reach for all day is built in to the company’s sales goals
“We’ve seen a lot of growth in the drug
store category due to impulse purchases,” List says.
“We’re trying to break into club stores… and I see a lot
of opportunity for continued growth in foodservice.”
Promoting full steam ahead
Variety in the non-dairy product line gives the company an advantage
on the grocery store shelf.
“We’re taking a strong hold in the
non-dairy aseptic business,” says Maureen Putman, general manager,
grocery. “We have refrigerated rice and soy milks, but our expertise
is in the aseptic business, and it’s really the most profitable place
for us. But we feel that being in refrigerated can only bring more
awareness and more people into the category.
“The non-refrigerated section offers
variety,” she continues. “I don’t think you’re ever
going to get the shelf space in refrigerated to offer the variety that we
have in aseptic because it’s a limited section. You could take up the
whole refrigerated milk section with the variety we have in aseptic soy
milk, and the refrigerated section is precious real estate in grocery
To ensure trial and repeat purchase, in-store couponing has
been successful for the non-dairy business, according to Putman.
“When it comes to marketing Earth’s Best
infant and toddler foods, it is imperative to connect with new mothers and
become a trusted resource,” she says. “We do this in a variety
of ways, including participating in baby fairs around the country, monthly
meetings with new mother’s groups, direct mail, e-newsletters,
advertising in key parenting magazines and couponing to increase trial
During 2004, Celestial Seasonings exposed consumers to
the brand’s new products through widespread sampling, while
simultaneously providing incentive to purchase through couponing. Inside
boxes of Celestial teas are product samples as well as colorful brochures
with information about the history and benefits of tea, plus recipes, tea
tidbits and coupons. In 2004, the company boasted the broadest new product
initiative in its history. Expanding on last year’s new launches,
Celestial debuted 11 new teas covering a range of segments from white and
green to red, black and chai. Some of the newest flavors are Blueberry
Breeze Green, Decaf China Pearl White, Moroccan Pomegranate Red and
Chocolate Caramel Enchantment.
It also has introduced holiday-inspired teas for
children in flavors such as Santa’s Candy Apple and Rudolph’s
Rockin’ Raspberry. These join the holiday line of Gingerbread Spice,
Nutcracker Sweet, Sugar Plum Spice and new Candy Cane Lane teas for adults.
In addition to national retail outlets, a company
store in Boulder, Colo., offers thousands of annual visitors the
opportunity to peruse the company’s myriad products, which also
include Terra Chips and Health Valley cookies
and snacks. While Celestial Seasonings lip balm, “tea” shirts,
fruit preserves and honey, as well as other paraphernalia such as teapots
fill the shelves, 70 percent of the revenue in the store comes from tea
Steeped in innovation
The natural and organic foods company generally
introduces new products around two dominant industry trade shows: Natural
Products Expo East and Natural Products Expo
West. While it shares sales and creative resources among company divisions,
Celestial Seasonings has its own laboratory at
its facility in Colorado, while the soy business has a laboratory at its
facility in California.
Putman says, “Ideas for new products come from a
variety of resources: syndicated and custom research, sales, R&D and
marketing groups, our medical advisory board, employees, suppliers,
customers, even our own children.”
The company is introducing Horchata under the Rice
Dream brand. Horchata is a traditional Mexican beverage that is a blend of
cinnamon, vanilla and rice, which, will be introduced in aseptic packaging
in January after its successful debut this year at the Natural Products
For Celestial Seasonings, new beverage development
stems from a number of sources such as consumer feedback, supplier tips and
research reports about flavors that are hot. In a laboratory at Celestial
Seasonings, a group of scientists works with numerous ingredients. The
R&D team is responsible for developing the highest quality product
formula, creating the optimal blend for each tea, according to Scott
Graham, director of product development at Celestial Seasonings. A vast
collection of herbs, spices, black, green, red and white teas are testament
to the variety of ingredients that go into making some of the world’s
most popular specialty teas.
“The process of creating a new tea starts in a
variety of ways,” says Celestial Seasonings’ List. “It
can come from anyone from me to a retailer or salesperson in the United
States or internationally who sees something new in the market, or from
custom or syndicated research that tells us some flavor such as pomegranate
is going to be big this year.”
The company’s True Blueberry herb tea was
developed in conjunction with Celestial Seasonings’ flavor
manufacturer, based on research that suggested blueberries had high
antioxidant properties. Other teas develop from activity on the store
“Once we have the flavor we think will work, our
creative team works with artists who create the actual artwork for our
packaging,” he says. “At the same time, we’re developing
the formula and brainstorming on potential names. Eventually we’ll
merge these elements to create the finished tea product.”
In addition to the bag tea brands, two ready-to-drink
teas have been introduced that have limited availability in the United
“The ready-to-drink category is something we are
consistently looking at improving,” List says. “We tried other
products in the past as well. We currently have a test going on three
refrigerated products, called Zingerade. We’re doing a very limited
test to see how it goes. Because the cost of entry and velocity
expectations in the refrigerated category are high, we need to test the
proposition thoroughly, first. “
Packaging with care
The artwork on Celestial Seasonings tea boxes is as
recognized as the tea inside. The marketing and creative departments, along with a team of
commissioned artists, collaborate to develop whimsical imagery for every
flavor of tea, and thoughtful sayings, educational snippets and detailed
artwork to communicate with consumers. This is Celestial’s trademark.
And the availability of Hispanic-targeted teas in flavors such as Cinnamon
Apple, Linden Mint, Honey Lemon Diet and Apple Banana Chamomile, and
international-specific packaging, shows its commitment to expand its
products and messages.
Designing the content that is going to appear on each
box is no small task, considering each line of teas has its own unique box
architecture. To add to the complexity, some of the varieties recently
switched to dual-panel boxes in order to stock more flavors on the shelf.
Additionally, different box sizes and multilingual packaging contribute to
more than 150 SKUs.
Taking a hint from the Celestial Seasonings
experience, non-dairy products are going through a packaging transition as
well. Rice Dream HeartWise is expected to receive enhanced health-benefit
call-outs. In addition to flavor profile changes, the Walnut Acres
Certified Organic brand is scheduled to get a new look.
“We are improving the package with clearer
plastic so you can see the juice color,” Putman says.
“We’re also updating the label to reflect the fact that it is
100 percent juice, a key benefit that has been
missing from the label, and to better communicate the organic message.” BI