The Hain Celestial group has announced that it is to close its Celestial Seasonings supplements business and terminate its licence to produce products under the Weight Watchers brand in order to concentrate on its more profitable natural and organic food operations.
Irwin Simon, chairman and CEO of Hain, said that the company would take a charge of around US$8 to $10 million in the fourth quarter of the current fiscal year (ending 30 June) related to the decision. Annual revenues from the supplements and Weight Watchers operations were around $4 million.
"As we streamline our brands, SKUs and plants, we have made the decision to totally discontinue the supplements business which was a challenged category over the past few years. As for our Weight Watchers business, we have decided to grow those brands we own rather than license in the medically directed business, such as Estee, Alba and Featherweight," Simon said.
The decision to withdraw from the supplements business came as Hain announced that it had signed an agreement with McDonald's which will see the fast food chain add Yves Veggie Cuisine's meatless soy burgers to its menu in all 1,250 restaurants across Canada. The burgers will be sold under the McVeggie Burger name.
Hain will also form a joint venture with Barilla Alimentare, the Italian pasta and baking company, to manufacture, market, and distribute Terra brand products throughout Europe.
Simon said that these agreements would help Hain meet its growth targets for fiscal 2003, with double digit growth expected from its leading brands. Revenues are expected to range from $450 to $470 million.