Hain Celestial Group: A Firm Focused on “Organic” Differentiation
Hain Celestial Group has built strong capabilities in producing natural and organic foods to take advantage of the changing consumer trend in the food business. The company grew through a series of acquisitions of entrepreneurial start-ups. These acquisitions allowed Hain Celestial to become the largest supplier to retailer Whole Foods Markets. The natural food trend has allowed the company to sell its branded products to traditional grocery store chains, accounting for about 60 percent of its U.S. sales. Meanwhile, large branded food firms such as Kraft Foods, Campbell Soup Company, and J.M. Smucker Company that have not focused as intensely on this natural segment have stalled their earnings, in part because they have not focused on the natural and organic trend desired by consumers as much as Hain Celestial. While larger brands seek to modify existing products by removing less natural ingredients (Nestlé) or reducing the use of high fructose corn syrup (Hershey Company and Mars, Inc.), these types of changes do not allow them to overcome the problem of rapidly changing consumer tastes toward natural food. Grocery stores and restaurants are also attempting to take advantage of the trend toward natural foods.
Evaluate Hain Celestial’s strategy and what you would have done differently to implement it.
Identify Hain’s competitors and how these companies differentiate themselves from one another. Hain and its competitors have differentiated themselves on several dimensions and that to grow in a saturated and highly competitive industry they need to offer value that exceeds that of their competition.
Identify other firms with a strong competitive advantage that implemented strategies to attract customers following social trends.
Case Discussion Questions
Your minimum writing content for all four questions must be at least 200 words.
2 points will be deducted if not provided.
1. Provide some examples of the competitive dimensions on which this firm focuses while implementing its differentiation strategy.
2. On what environmental trends did Hain Celestial base its business-level strategy? What environmental trends could have a negative effect on this firm’s strategy in the future? Why?
3. In years to come, should Hain try to grow primarily organically, through collaborative strategies such as joint ventures and strategic alliances, or through mergers and acquisitions? Explain your answer.
4. What are the most serious competitive challenges you anticipate Hain Celestial will face over the next ten years? How should the firm respond to these challenges?
