Hain Mastery of Public Relations Over Sales

Implications: 1)  The Sunday after a strong earnings call for 3q 2007, the PR mastery of Hain Celestial continued in a NY NEWSDAY profile of Irwin Simon.  Simon looked so great in the piece that one doubts it could have been any rosier had the Hain Communications Department written it

2) Simon's confidence comes across as arrogant, suggesting either that he really believes his hype or perhaps believes the market growth for natural and organic is so strong, actual single-digit growth in brand performance is less relevant to Hain's stock's continued strong performance.



Analysis: Just a few days after a strong earnings report, fueled in most part through newly acquired companies, a Long Island NEWSDAY profile of Irwin Simon must have added to his glee.

After reading the profile one would believe Simon is the only thing keeping CPG giants from burning down organic processing plants and polluting the natural and organic products industry with substandard mass market brands. That's funny because Simon's criticism of mass market organic brands echoes what many of Hain’s critics within the natural and organic industry say about him.

While Hain's growth through acquisition strategy has been oft described as the work of a master strategist developing strong brands in reality Hain's growth isn’t so rosy. Yes Hain’s Simon is a master financier, yet when it comes to managing brands instead of money, his leadership leaves little room for admiration.

The fact is Hain has done a historically poor job with its new brands.   And what’s more we wonder if in the long term Simon’s that concerned.  Could it be he is betting that growth in the marketplace will benefit his brands no matter how poorly they're managed?

While last week’s earnings call showed strong growth in several of Hain’s new brands including Jason Cosmetics much of this is from new placement in conventional outlets and we have significant doubts that sales from many of these new distribution points will be strong. Instead look for these products to sit on the shelves gathering dust as consumers seek cheaper more familiar mass market brands instead.  

As quoted in the story, Simon states that many of the companies he bought would have likely gone out a business.

"I've been looked upon as a big bad guy in the industry, because I've gobbled all these companies up. But I believe that if I didn't buy them, they wouldn't have stayed in business today. They were poorly run, and I've taken them to a whole other level."

This claim that Simon’s acquisitions have saved companies from failure is ridiculous. In fact the opposite could be argued far more persuasively. Namely that without Hain’s clumsy lead glove management many of these brands would be more robust than they are today.