Blog

By Steve Golliher
Chief Supply Chain Officer

In September 2023, Hain unveiled its multi-year business strategy Hain Reimagined. The plan outlined its goal to transform the company into a globally integrated enterprise to drive scale and deliver long-term shareholder value. A key aspect of the strategy is unlocking fuel for growth. Here’s the inside story about how working capital management, operational efficiencies and best-in-class safety standards are setting the company up to deliver more than $60 million in cost savings by year-end.

What are some sourcing and productivity initiatives that are leading to significant cost savings?

As we transform into a globally integrated enterprise, our Global Supply Chain center of excellence is fostering strong collaboration and best practice sharing to discover new productivity streams. We’ve been focusing our efforts on inventory reduction and vendor consolidation, which are both critical for procurement. We also identified ways to reduce complexity in our supply chain via factory automation to enhance overall equipment effectiveness (OEE). A few examples include improving global ingredient sourcing, as well as optimizing packaging and case packs to reduce our carbon footprint. These initiatives present a substantial opportunity to remove costs from our value chain while making a positive impact.

What are the main drivers that are enabling Hain to deliver cost savings?

We have great people, fully committed to our Hain Reimagined strategy and fully committed to driving the productivity agenda. Our U.S. snacks plant team drove the biggest productivity for the year and our UK team has exceeded their target. Procurement for direct and indirect goods and services exceeded their targets as well.  It has truly been a collaborative effort across our Supply Chain, Research & Development, Quality, and Commercial teams to enable our progress to unlock Fuel.

Hain has also long prioritized efforts to build a robust Environmental Health and Safety (EHS) program. Doing so not only safeguards employees but also reduces injury costs and boosts employee engagement. We have a “Working to Zero” approach with the ultimate goal of eliminating all injuries in our facilities. Our EHS Management System and dedicated team delivered industry-leading safety results. In FY24, we achieved a world-class incident frequency Total Recordable Injury Rate (TRIR) below 1.00. We had zero findings from regulatory inspections, and we saw an 11% increase in employee engagement. ¹ These stellar results place Hain in the top tier compared to our peer set and is outperforming the Bureau of Labor and Statistics’ industry average.² This is a prime example of how “safety pays.” Prioritizing safety not only protects our employees but also helps avoid unnecessary costs in the supply chain.

What new capabilities is the company investing in, and how will they support growth?

Our key investments span across people, processes, and technology. We expect the new forecast accuracy statistical model we are using, when aligned with Integrated Business Planning, will continue to enhance service and forecast accuracy in FY25. Our Co-manufacturing team is transitioning towards more ‘turnkey’ partnerships, which helps reduce costs and improve service levels. Globally, we’re focused on enhancing our go-to-market footprint to be closer to the customer; this proximity will allow us to reduce costs and improve service levels. In our plants, we continuously seek opportunities to invest in automation to enhance safety and productivity. These are just a few of the many capabilities that drive and support the growth of our business.

How do these collective efforts drive margin expansion and improve cash flow?

Productivity has been a key driver of margin expansion in FY24 and we expect it to be one of the most significant levers for driving continued margin expansion going forward. We have set an ambitious productivity target. The good news is that we have a strong pipeline and have outlined the building blocks necessary to reach it. We also have a clear line of sight to achieve our working capital goals through negotiated payment terms and ongoing inventory optimization. It is our job and mission to deliver the productivity and working capital targets in this new fiscal year.

What is the company’s strategy for pivoting to growth, and what role do these initiatives play in it?

All four pillars of the company’s Hain Reimagined strategy are ultimately focused on enabling and pivoting to growth. The key word is ‘pivoting.’ Anticipating growth months before it arrives ensures that new markets and categories are planned for well in advance. This proactive approach will support higher levels of accuracy, service, and customer satisfaction. We are fundamentally a very different company than we were one year ago. We’re more efficient and well-run, which we expect will set us up for future success and support our ability to achieve the goals we outlined in Hain Reimagined.

_{[1] Hain Celestial internal EHS program/committee participation assessment from July 1, 2023 - July 1, 2024.}

_{[2] Bureau of Labor Statistics, U.S. Department of Labor, Survey of Occupational Injuries and Illnesses, in cooperation with participating state agencies 2022.}