What changed in this filing

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Item 1. Business

2020-08-25 compared with 2019-08-29 · 150 added, 145 removed, 130 unchanged (69% of the section changed)

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Hain Celestial sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores in over 75 countries worldwide.

The Company manufactures, markets, distributes and sells organic and natural products under brand names that are sold as “better-for-you” products, with many recognized brands in the various market categories it serves, including Almond Dream ® , Arrowhead Mills ® , Bearitos ® , Better Bean ® , BluePrint ® , Casbah ® , Celestial Seasonings ® , Clarks ™ , Coconut Dream ® , Cully & Sully ® , Danival ® , DeBoles ® , Earth’s Best ® , Ella’s Kitchen ® , Europe’s Best ® , Farmhouse Fare ™ , Frank Cooper’s ® , Gale’s ® , Garden of Eatin’ ® , GG UniqueFiber ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , Johnson’s Juice Co.

™ , Joya ® , Lima ® , Linda McCartney ® (under license), MaraNatha ® , Mary Berry (under license), Natumi ® , New Covent Garden Soup Co.

® , Orchard House ® , Rice Dream ® , Robertson’s ® , Rudi’s Gluten-Free Bakery ™ , Rudi’s Organic Bakery ® , Sensible Portions ® , Spectrum ® Organics, Soy Dream ® , Sun-Pat ® , Sunripe ® , SunSpire ® , Terra ® , The Greek Gods ® , Walnut Acres ® , Yorkshire Provender ® , Yves Veggie Cuisine ® and William’s ™ .

The Company’s personal care products are marketed under the Alba Botanica ® , Avalon Organics ® , Earth’s Best ® , JASON ® , Live Clean ® and Queen Helene ® brands.

Historically, the Company divided its business into core platforms, which are defined by common consumer need, route-to-market or internal advantage and are aligned with the Company’s strategic roadmap to continue its leadership position in the organic and natural, “better-for-you” products industry.

Those core platforms within our United States segment are:

Better-for-You Baby , which includes infant foods, infant and toddler formula, toddler and kids foods and diapers that nurture and care for babies and toddlers, under the Earth’s Best ® and Ella’s Kitchen ® brands.

Better-for-You Pantry , which includes core consumer staples, such as MaraNatha ® , Arrowhead Mills ® , Imagine ® and Spectrum ® brands.

Better-for-You Snacking , which includes wholesome products for in-between meals, such as Terra ® , Sensible Portions ® and Garden of Eatin’ ® brands.

Fresh Living , which includes yogurt, plant-based proteins and other refrigerated products, such as The Greek Gods ® yogurt and Dream™ plant-based beverage brands.

Pure Personal Care , which includes personal care products focused on providing consumers with cleaner and gentler ingredients, such as JASON ® , Live Clean ® , Avalon Organics ® and Alba Botanica ® brands.

Tea , which includes tea products marketed under the Celestial Seasonings ® brand.

Additionally, beginning in fiscal 2017, the Company launched Hain Ventures (formerly known as “Cultivate Ventures”), a venture unit with a twofold purpose:

(i) to strategically invest in the Company’s smaller brands in high potential categories, by giving these brands a dedicated, creative focus for refresh and relaunch and (ii) to incubate and grow small acquisitions until they reach the scale required to migrate to the Company’s core platforms.

During fiscal 2019, the Company refined its strategy within the United States segment, focusing on simplifying the Company’s portfolio and reinvigorating profitable sales growth by discontinuing uneconomic investment, realigning resources to coincide with industrial brand role, reducing unproductive stock-keeping units (“SKUs”) and brands, and reassessing current pricing architecture.

As part of this initiative, the Company reviewed its product portfolio and divided it into “Get Bigger” and “Get Better” brand categories.

The Company’s “Get Bigger” brands represent its strongest brands with higher margins, which compete in categories with strong growth.

In order to capitalize on the potential of these brands, the Company began reallocating resources to optimize assortment and increase share of distribution.

In addition, the Company will increase its marketing and innovation investments.

The Company’s “Get Better” brands are the brands in which the Company is primarily focused on simplification and expansion of profit.

Some of these are low margin, non-strategic brands that add complexity with minimal benefit to the Company’s operations.

Accordingly, in fiscal 2019, the Company initiated a SKU rationalization, which included the elimination of approximately 350 low velocity SKUs.

The elimination of these SKUs is expected to impact sales growth in the next fiscal year, but is expected to result in expanded profits and a remaining set of core SKUs that will maintain their shelf space in the store.

As part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within our core portfolio.

Accordingly, the Company divested of all of its operations of the Hain Pure Protein reportable segment (discussed further below) and WestSoy ® tofu, seitan and tempeh businesses in the United States.

Additionally, on August 27, 2019, the Company sold the entities comprising its Tilda operating segment and certain other assets of the Tilda business.

See Note 21, Subsequent Event in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

Productivity and Transformation

The Company manufactures, markets, distributes and sells organic and natural products under brand names that are sold as “better-for-you” products, providing consumers with the opportunity to lead A Healthier Way of Life ® .

Hain Celestial is a leader in many organic and natural product categories, with ma ny recognized brands in the various market categories it serves, including Celestial Seasonings ® , Clarks ™ , Cully & Sully ® , Dream ® , Earth’s Best ® , Ella’s Kitchen ® , Farmhouse Fare ™ , Frank Cooper’s ® , GG UniqueFiber ® , Gale’s ® , Garden of Eatin’ ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney ® (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

® , Orchard House ® , Roberts on’s ® , Se nsible Portions ® , Spectrum ® , Sun-Pat ® , Sunri pe ® , Terr a ® , The Greek Gods ® , William’s ™ , Yorkshire Provender ® and Yves Veggie Cuisine ® .

The Company’s personal care products are marketed under the Alba Botanica ® , Avalon Organics ® , Earth’s Best ® , JASON ® , Live Clean ® , One Step ® and Queen Helene ® brands.

The Company continues to execute the four key pillars of its strategy to:

(1) simplify its portfolio;

(2) strengthen its capabilities;

(3) expand profit margins and cash flow;

and (4) reinvigorate profitable topline growth.

The Company has executed this strategy, with a focus on discontinuing uneconomic investment, realigning resources to coincide with brand importance, reducing unproductive stock-keeping units (“SKUs”) and brands and reassessing current pricing architecture.

As part of this initiative, the Company reviewed its product portfolio within North America and d ivided it into “Get Bigger” and “Get Better” brand categories.

The Company’s “Get Bigger” brands represent its strongest brands with higher margins, which compete in categories with strong growth potential.

The Company has concentrated its investment in marketing, innovation and other resources to prioritize spending for these brands, in an effort to reinvigorate profitable topline growth, optimize assortment and increase share of distribution.

The Company’s “Get Better” brands are the brands in which the Company is primarily focused on simplification and expansion of profit margin.

Some of these brands have historically been low margin, non-strategic brands that added complexity with minimal benefit to the Company’s operations.

During the fourth quarter of fiscal 2019, the Company initiated a SKU rationalization that included the elimination of approximately 350 low velocity and low profitability SKUs.

These SKU rationalizations are expected to result in expanded future profits and a remaining set of core SKUs that will m aintain their shelf space in the store.

In addition, as part of the Company’s overall strategy, the Company may seek to dispose of businesses and brands that are less profitable or are otherwise less of a strategic fit within our core portfolio.

During fiscal 2019, for example, the Company divested its Hain Pure Protein reportable segment and its WestSoy ® tofu, seitan and tempeh businesses.

In fiscal 2020, the Company divested its Tilda business and its Arrowhead Mills ® , SunSpire ® , Europe's Best ® , Casbah ® , Rudi’s Gluten-Free Bakery ™ , Rudi’s Organic Bakery ® and Fountain of Truth ™ brands.

More recently, the Company divested its Danival ® business in July 2020.

See Note 25, Subsequent Events, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.

Productivity and Transformation Costs

As part of the Company’s historical strategic review, it focused on a productivity initiative, which it called “Project Terra.” A key component of this project was the identification of global cost savings and the removal of complexity from the business.

This review has included and continues to include streamlining the Company’s manufacturing plants, co-packers and supply chain, eliminating served categories or brands within those categories, and product rationalization initiatives which are aimed at eliminating slow moving SKUs.

In fiscal 2019, the Company announced a new transformation initiative, of which one aspect is to identify additional areas of productivity savings to support sustainable profitable performance.

In fiscal 2019, the Company announced a strategy that includes as one of its key pillars identifying areas of cost savings and

operating efficiencies to expand profit margins and cash flow.

As part of this overall strategy and the key pillar of realizing savings and efficiencies, during fiscal 2020, the Company began the integration of its United States and Canada operations in alignment with the North America reportable segment structure.

The Company will carry out additional productivity initiatives under this strategy in fiscal 2021.

Productivity and transformation costs include costs, such as consulting and severance costs, relating to streamlining the Company’s manufacturing plants, co-packers and supply chain, eliminating served categories or brands within those categories, and product rationalization initiatives which are aimed at eliminating slow moving SKUs.

Discontinued Operations

In March 2018, the Company’s Board of Directors approved a plan to sell all of the operations of the Hain Pure Protein Corporation (“HPPC”) operating segment, which includes the Plainville Farms and FreeBird businesses, and the EK Holdings, Inc.

(“Empire Kosher” or “Empire”) operating segment, which were reported in the aggregate as the Hain Pure Protein reportable segment.

On August 27, 2019, the Company and Ebro Foods S.A.

(the “Purchaser”) entered into, and consummated the transactions contemplated by, an agreement relating to the sale and purchase of the Tilda Group Entities and certain other assets.

The Company sold the entities comprising its Tilda operating segment and certain other assets of the Tilda business to the Purchaser for an aggregate price of $341.8 million.

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business, a component of the Company’s Hain Pure Protein Corporation (“HPPC”) operating segment.

On June 28, 2019, the Company completed the sale of the remainder of HPPC and Empire Kosher which included the FreeBird and Empire Kosher businesses.

These dispositions were undertaken to reduce complexity in the Company’s operations and simplify the Company’s brand portfolio, in addition to allowing additional flexibility to focus on opportunities for growth and innovation in the Company’s more profitable and faster growing core businesses.

Collectively, these dispositions represented a strategic shift that had a major impact on the Company’s operations and financial results and have been accounted for as discontinued operations.

On February 15, 2019, the Company completed the sale of substantially all of the assets used primarily for the Plainville Farms business (a component of HPPC).

On June 28, 2019, the Company completed the sale of the remainder of HPPC and EK Holdings, Inc.

which includes the FreeBird and Empire Kosher businesses.

See Note 5, Discontinued Operations, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Chief Executive Officer Succession Plan

On June 24, 2018, the Company entered into a Chief Executive Officer (“CEO”) succession plan, whereby the Company’s former CEO, Irwin D.

Collectively, these dispositions were reported in the aggregate as the Hain Pure Protein reportable segment.

These dispositions represented strategic shifts that had a major impact on the Company’s operations and financial results and therefore, the Company is presenting the operating results and cash flows of the Tilda operating segment and the Hain Pure Protein reportable segment within discontinued operations in the current and prior periods.

The assets and liabilities of the Tilda operating segment are presented as assets and liabilities of discontinued operations in the Consolidated Balance Sheet as of June 30, 2019.

See Note 5, Discontinued Operations and Assets Held for Sale, in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Former Chief Executive Officer Succession Plan

On June 24, 2018, the Company entered into a succession plan, whereby the Company’s former Chief Executive Officer (“CEO”), Irwin D.

Simon, agreed to terminate his employment with the Company upon the hiring of a new CEO.

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Simon’s employment with the Company terminated on November 4, 2018.

See Note 3, Chief Executive Officer Succession Plan , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

See Note 3, Former Chief Executive Officer Succession Plan , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

Change in Reportable Segments

Historically, the Company had three reportable segments:

United States, United Kingdom and Rest of World.

Effective July 1, 2019, the Company reassessed its segment reporting structure and as a result, the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment.

Additionally, the Europe operating segment, which was included in the Rest of World reportable segment, was combined with the United Kingdom reportable segment and renamed the International reportable segment.

Accordingly, the Company now operates under two reportable segments:

North America and International.

Prior period segment information contained herein has been adjusted to reflect the Company’s new operating and reporting structure.

See Not e 22, Se gment Information , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information.

As of June 30, 2020, we employed a total of 4,287 full-time employees.

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Our product categories consist of the following:

Grocery products include infant formula, infant, toddler and kids foods, diapers and wipes, rice and grain-based products, plant-based beverages and frozen desserts (such as soy, rice, oat, almond and coconut), flour and baking mixes, breads, hot and cold cereals, pasta, condiments, cooking and culinary oils, granolas, cereal bars, canned, chilled fresh, aseptic and instant soups, yogurts, chilis, chocolate, nut butters, juices including cold-pressed juice, hot-eating desserts, cookies, frozen fruit and vegetables, pre-cut fresh fruit, refrigerated and frozen plant-based meat-alternative products, jams, fruit spreads, jelly, honey, natural sweeteners and marmalade products, as well as other food products.

Grocery products accounted for approximately 74% of our consolidated net sales in fiscal 2019 , 75% in fiscal 2018 and 74% in fiscal 2017 .

Under the Celestial Seasonings ® brand, we currently offer more than 100 varieties of herbal, green, black, wellness, rooibos and chai tea.

Tea products accounted for approximately 6% of our consolidated net sales in fiscal 2020 an d 5% in each of fiscal 2019 and 2018.

Our snack products include a variety of potato, root vegetable and other exotic vegetable chips, straws, tortilla chips, whole grain chips , pita chips and puffs.

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Personal Care

Our personal care products cover a variety of personal care categories including skin, hair and oral care, deodorants, baby care items, body washes, sunscreens and lotions.

Our personal care products cover a variety of personal care categories including hand, skin, hair and oral care, deodorants, baby care items, body washes, sunscreens and lotions.

Personal care products accounted for approximately 10% of our consolidated net sales in each of fiscal 2020, 2019 and 2018.

Under the Celestial Seasonings ® brand, we currently offer more than 100 varieties of herbal, green, black, wellness, rooibos and chai tea.

Tea products accounted for approximately 5% of our consolidated net sales in each of 2019 , 2018 and 2017 .

Grocery products include infant formula, infant, toddler and kids’ foods, plant-based beverages and frozen desserts (such as soy, rice, oat, almond and coconut), condiments, cooking and culinary oils, cereal bars, canned, chilled fresh, aseptic and instant soups, yogurts, nut butters, juices, hot-eating desserts, cookies, frozen fruit and vegetables, pre-cut fresh fruit, refrigerated and frozen plant-based meat-alternative products, jams, fruit spreads, jelly, honey, natural sweeteners and marmalade products, as well as other food products.

Grocery products accounted for approximately 69% of our consolidated net sales in fiscal 2020, 72% in fiscal 2019 and 73% in fiscal 2018.

Certain of our product lines have seasonal fluctuations.

Hot tea, baking products, hot cereal, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our prepared food and personal care products are stronger in the warmer months.

Hot tea, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our prepared food and personal care products are stronger in the warmer months.

As such, our results of operations and our cash flows for any particular quarter are not indicative of the results we expect for the full year, and our historical seasonality may not be indicative of future quarterly results of operations.

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We expect to spend approximately $80 million to $85 million for capital projects in fiscal 2021.

We principally manage our business by geography in seven operating segments:

the United States, United Kingdom, Tilda, Ella’s Kitchen UK, Canada, Europe and Hain Ventures.

In addition, we have three reportable segments:

United States, United Kingdom and Rest of World.

In fiscal 2018, the Hain Pure Protein operations, including HPPC and Empire, were classified as discontinued operations as discussed in Note 5, Discontinued Operations in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Therefore, segment information presented excludes the results of Hain Pure Protein.

On August 27, 2019, we sold our Tilda business as discussed in Note 21, Subsequent Event in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Each segment includes the results of operations attributable to its geographic location except for Hain Ventures, which conducts business in the United States, Canada and Europe which are included in the Rest of World segment.

We use segment net sales and operating income to evaluate segment performance and to allocate resources.

We believe this measure is most relevant in order to analyze segment results and trends.

Prior to July 1, 2019, our operations were managed in seven operating segments:

the United States, United Kingdom, Tilda, Ella’s Kitchen UK, Europe, Canada and Hain Ventures.

For segment reporting purposes, based on economic similarity as outlined within Accounting Standards Codification ("ASC") 280, Segment Reporting, we elected to combine the United

Kingdom, Tilda and Ella’s Kitchen UK operating segments into one reportable segment known as United Kingdom.

Additionally, the Canada, Europe and Hain Ventures operating segments were combined as the Rest of World reportable segment.

Separately, the United States operating segment comprised its own reportable segment.

Effective July 1, 2019, we reassessed our segment reporting structure due to changes in how our Chief Operating Decision Maker assesses our performance and allocates resources as a result of a change in our strategy, which includes creating synergies among our United States and Canada businesses, as well as among our international businesses in the United Kingdom and Europe.

As a result, the Canada and Hain Ventures operating segments, which were included within the Rest of World reportable segment, were moved to the United States reportable segment and renamed the North America reportable segment.

Accordingly, we now operate under two reportable segments:

North America and International.

Prior period segment information has been adjusted to reflect our new operating and reporting structure.

Additionally, the Tilda operating segment was classified as discontinued operations as discussed in Note 5, Discontinued Operations and Assets Held for Sale , in the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.

Segment information presented herein excludes the results of Tilda for all periods presented.

We use segment net sales and operating income to evaluate performance and to allocate resources.

We believe these measures are most relevant in order to analyze segment results and trends.

Segment operating income excludes certain general corporate expenses (which are a component of selling, general and administrative expenses), impairment and acquisition related expenses, restructuring, integration and other charges.

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Fiscal Year Ended June 30,

2020 2019 2018

North America $ 1,171,478 57 % $ 1,195,979 57 % $ 1,295,413 57 %

International 882,425 43 % 908,627 43 % 970,257 43 %

Total $ 2,053,903 100 % $ 2,104,606 100 % $ 2,265,670 100 %

North America Segment:

United States

United Kingdom

Rest of World

United States Segment:

Our products are sold throughout the United States.

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Food distributors purchase products from us for resale to retailers.

The brands sold by the United States segment by platform are:

Better-for-You Baby

Our Better-for-You Baby products include infant and toddler formula, infant cereals, jarred baby food, baby food pouches, snacks, frozen toddler and kids’ foods and diapers under the Earth’s Best ® , Earth’s Best Sesame Street (under license) and Ella’s Kitchen ® brands.

Better-for-You Pantry

Our Better-for-You Pantry products include the following natural and organic brands:

Spectrum ® culinary oils, vinegars and condiments, Spectrum Essentials ® nutritional oils and supplements, MaraNatha ® nut butters, Imagine ® broths, soups and gravies, Rudi’s Gluten Free Bakery ® and Rudi’s Organic Bakery ® breads, buns, bagels and tortillas, Arrowhead Mills® flours, mixes and cereals, Hain Pure Foods ® condiments and Westbrae ® vegetarian products.

Better-for-You Snacking

Our Better-for-You snack food products include Terra ® varieties of root vegetable chips, potato chips and other exotic vegetable chips, Garden of Eatin’ ® tortilla chips, Sensible Portions ® snack products including Garden Veggie Straws ® , and Garden Veggie Chips and Apple Straws ® and Bearitos ® , puffs and other snacks.

Our Fresh Living products include The Greek Gods ® Greek-style yogurt and kefir, Almond Dream ® , Coconut Dream ® , Rice Dream ® , Oat Dream ® , Soy Dream ® and other Dream TM brand plant-based beverages, yogurt and frozen desserts.

Pure Personal Care

Our Pure Personal Care products include skin, hair and oral care products, deodorants and sun care and baby care items under the Alba Botanica ® , Avalon Organics ® , Earth’s Best ® , JASON ® , Live Clean ® and Queen Helene ® brands.

Our tea products are marketed under the Celestial Seasonings ® brand and include more than 100 varieties of herbal, green, black, wellness and rooibos teas, with well-known names and products such as Sleepytime ® , Lemon Zinger ® , Red Zinger ® , Cinnamon Apple Spice, Bengal Spice ® and Country Peach Passion ® .

United Kingdom Segment:

In the United Kingdom, our products include frozen and chilled products, including but not limited to soups, fruits and juices, plant-based and meat-free products, and premium rice and grain-based products as well as ambient products such as jams, fruit spreads, jellies, honey, marmalades, nut butters, sweeteners, syrups and dessert sauces.

The brands sold by our United Kingdom segment include Ella’s Kitchen ® infant and toddler foods, New Covent Garden Soup Co.

® and Yorkshire Provender ® chilled soups, Farmhouse Fare ™ and Mary Berry™ hot-eating desserts, Johnson’s Juice Co.

® juices, Linda McCartney’s ® chilled and frozen plant-based meals, Cully & Sully ® chilled soups and ready meals, Hartley’s ® jams, fruit spreads and jellies, William’s™ conserves, Sun-Pat ® nut butters, Gale’s ® honey, Clarks™ natural sweeteners and Robertson’s ® and Frank Cooper’s ® marmalades.

We also provide a comprehensive range of private label products to many retailers, convenience stores and foodservice providers in the following categories:

fresh soup, pre-cut fresh fruit, juice, smoothies, chilled desserts, meat-free meals and ambient grocery products.

Our products are principally sold throughout the United Kingdom and Ireland, but are also sold in other parts of the world as well.

Our customer base consists principally of retailers, convenience stores, foodservice providers, business to business, natural food and ethnic specialty distributors, club stores and wholesalers.

Rest of World Segment

The brands sold by the United States operating segment include:

Our snack food products include Terra ® varieties of root vegetable chips, potato chips and other exotic vegetable chips, Garden of Eatin’ ® tortilla chips, Sensible Portions ® snack products including Garden Veggie Straws ® , Garden Veggie Chips and Apple Straws ® and GG UniqueFiber™ crackers.

Personal Care

Our Personal Care products include hands, skin, hair and oral care products, deodorants and sun care and baby care items under the Alba Botanica ® , Avalon Organics ® , Earth’s Best ® , JASON ® , Live Clean ® and Queen Helene ® brands.

Our Grocery products include Yogurt, Baby Food and Pantry products.

Yogurt product includes The Greek Gods ® Greek-style yogurt.

Baby Food products include infant and toddler formula, infant cereals, jarred baby food, baby food pouches, snacks and frozen toddler and kids’ foods under the Earth’s Best ® and Earth’s Best Sesame Street (under license).

Pantry products include the following natural and organic brands:

Spectrum ® culinary oils, vinegars and condiments, Spectrum Essentials ® nutritional oils and supplements, MaraNatha ® nut butters, Imagine ® broths, soups and gravies, Hain Pure Foods ® condiments, Health Valley ® cereal bars and soups, Hollywood ® oils, Westbrae ® vegetarian products, Almond Dream ® , Coconut Dream ® , Rice Dream ® , Oat Dream ® , Soy Dream ® and other Dream TM brand plant-based beverages.

Our products are sold throughout Canada.

Our customer base consists principally of grocery supermarkets, mass merchandisers, club stores, natural food distributors, personal care distributors, drug store chains and foodservice distributors.

Our customer base consists principally of grocery supermarkets, mass merchandisers, club stores, natural food distributors, personal care distributors, drug store chains and food service distributors.

Our products are sold through our own retail direct sales force.

We also utilize third-party brokers who receive commissions and sell to foodservice and retail customers.

We also utilize third-party brokers who receive commissions and sell to food service and retail customers.

We utilize a third-party merchandising team for retail execution.

As in the United States, a portion of the products marketed by us are sold through independent distributors.

The brands sold in our Canada segment include Yves Veggie Cuisine ® refrigerated and frozen meat-alternative products, vegetables and lentils, Europe’s Best ® frozen fruits and vegetables, Earth’s Best ® infant formula and food, Casbah ® packaged grains, MaraNatha ® nut butters, Spectrum Essentials ® cooking and culinary oils, Imagine ® aseptic soups, The Greek Gods ® Greek-style yogurt and Robertson’s ® marmalades.

Our plant-based beverages include Rice Dream ® , Soy Dream ® , Oat Dream ® , Coconut Dream ® , Almond Dream ® , and Rice Dream ® in refrigerated format, Rice Dream ® and Almond Dream ® plant-based frozen desserts, Celestial Seasonings ® teas, Terra ® chips, Garden of Eatin’ ® tortilla chips and Sensible Portions ® snack products.

Our personal care products include skin, hair and oral care products, deodorants and baby care items under the Avalon Organics ® , Alba Botanica ® , JASON ® and Live Clean ® brands.

Our products sold by the Europe operating segment include Danival ® , Dream ® , Joya ® , Lima ® and Natumi ® .

The Danival ® brand includes organic cooked vegetables, prepared meals, sauces, fruit spreads and desserts.

The brands sold in our Canada operating segment include Yves Veggie Cuisine ® refrigerated and frozen meat-alternative products, vegetables and lentils, Earth’s Best ® infant formula, MaraNatha ® nut butters, Spectrum ® cooking and culinary oils, Imagine ® aseptic soups, The Greek Gods ® Greek-style yogurt and Robertson’s ® marmalades.

Our plant-based beverages include Soy Dream ® , Oat Dream ® , Coconut Dream ® , Almond Dream ® , and Rice Dream ® .

Other food brands include Celestial Seasonings ® teas, Terra ® chips and Sensible Portions ® snack products.

Our personal care products include skin, hair and oral care products, sun care, deodorants and baby care items under the Avalon Organics ® , Alba Botanica ® , JASON ® , Live Clean ® and One Step ® brands.

International Segment:

United Kingdom

In the United Kingdom, our products include frozen and chilled products, including but not limited to soups, fruits and juices, and plant-based and meat-free products as well as ambient products such as jams, fruit spreads, jellies, honey, marmalades, nut butters, sweeteners, syrups and dessert sauces.

The brands sold by our United Kingdom operating segment include Ella’s Kitchen ® infant and toddler foods, New Covent Garden Soup Co.

® and Yorkshire Provender ® chilled soups, Farmhouse Fare ™ hot-eating desserts, Johnson’s Juice Co.

We also provide a comprehensive range of private label products to many retailers, convenience stores and food service providers in the following categories:

fresh soup, pre-cut fresh fruit, juice, smoothies, chilled desserts, meat-free meals and ambient grocery products.

Our products are principally sold throughout the United Kingdom and Ireland, but are also sold in other parts of the world as well.

Our customer base consists principally of retailers, convenience stores, food service providers, business to business, natural food and ethnic specialty distributors, club stores and wholesalers.

Our products sold by the Europe operating segment include Dream ® , Joya ® , Lima ® and Natumi ® .

The Lima ® brand includes a wide range of organic products such as soy sauce, plant-based beverages and grain cakes, as well as grains, pasta, cereals, miso, snacks, sweeteners, spreads, soups and condiments.

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Our Joya ® brand includes soy, oat, rice and nut-based drinks as well as plant-based yogurts, desserts, creamers, tofu and private label products.

We also sell our Hartley’s ® jams, fruit spreads and jellies, Terra ® varieties of root vegetable and potato chips, and Celestial Seasonings ® teas and Linda McCartney’s ® chilled and frozen plant-based meals in Europe as well.

Our products are sold in grocery stores and organic food stores throughout Europe.

Our products are sold in grocery stores and organic food stores throughout Europe, the Middle East and India.

Our products are sold using our own direct sales force and local distributors.

Hain Ventures

Our products sold by the Hain Ventures operating segment include Better Bean ® prepared beans and bean-based dips sold in refrigerated tubs, BluePrint ® cold-pressed juice drinks, DeBoles® pasta, Health Valley ® cereal bars and soups, GG UniqueFiber™ crackers, SunSpire ® chocolates, Hollywood® oils, Casbah ® grain-based products and Yves Veggie Cuisine ® plant-based products.

Hain Ventures products are sold throughout the United States.

Our customer base consists principally of grocery supermarkets, mass merchandisers, Direct Store Delivery (“DSD”) distributors and natural food distributors.

We utilize a dedicated sales team and third-party brokers who receive commissions and sell to grocery supermarkets and natural food stores.

A portion of our BluePrint ® products and GG UniqueFiber™ crackers are sold through our own DSD sales force as well as through our Direct to Consumer business.

Two of our customers each accounted for more than 10% of our consolidated net sales in each of the last three fiscal years, respectively.

United Natural Foods, Inc., a distributor of products to natural foods supermarkets, independent natural retailers and other supermarkets and retailers, accounted for approximately 10% , 11% and 11% of our consolidated net sales for the fiscal years ended June 30, 2019 , 2018 and 2017 , respectively, which were primarily related to the United States segment.

Two of our customers each accounted for more than 10% of our consolidated net sales in certain of the last three fiscal years, respectively.

United Natural Foods, Inc., a distributor of products to natural foods supermarkets, independent natural retailers and other supermarkets and retailers, accounted for approximately 9% , 10% and 12% of our consolidated net sales for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, which were primarily related to the United States operating segment.

Likewise, Walmart Inc.

and its affiliates, Sam’s Club and ASDA, together accounted for approximately 11% , 11% and 12% of our consolidated net sales for the fiscal years ended June 30, 2019 , 2018 and 2017 , respectively, which were primarily related to the United States and United Kingdom segments.

No other customer accounted for more than 10% of our net sales in the past three fiscal years.

and its affiliates, Sam’s Club and ASDA, together accounted for approximately 12% , 11% and 11% of our consolidated net sales for the fiscal years ended June 30, 2020, 2019 and 2018, respectively, which were primarily related to the United States and United Kingdom operating segments.

No other customer acc ounted for more than 10% of our net sales in the past three fiscal years.

Foreign Operations

We sell our products to customers in more than 75 countries.

International sales represented approximately 54% , 53% and 50% of our consolidated net sales in fiscal 2019 , 2018 and 2017 , respectively.

We use a combination of trade and consumer promotions to market our products.

We use trade advertising and promotion, including placement fees, cooperative advertising and feature advertising in distribution catalogs.

Consumer advertising and sales promotions are also made via social media and trial use programs.

We utilize in-store product demonstrations and sampling in the club store channel.

Our investments in consumer spending are aimed at enhancing brand equity and increasing consumption.

These consumer spending categories include, but are not limited to, coupons, direct mailing, e-consumer relationship programs and other forms of promotions.

Additionally, we maintain separate websites and social media pages for many of our brands featuring product information regarding the particular brand.

We also utilize sponsorship programs to help create brand awareness.

In the United States, our Earth’s Best ® brand has an agreement with PBS Kids and Sesame Workshop, and our Terra Blues ® are featured snacks on JetBlue Airways flights.

In addition, Sensible Portions ® products, Yves Veggie Cuisine ® plant-based burgers and Terra ® chips are advertised and sold at Citi Field.

There is no guarantee that these promotional investments are or will be successful.

Sales outside of the United States represented approximately 51% , 50% and 50% of our consolidated net sales in fiscal 2020, 2019 and 2018, respectively.

We aim to meet the consumer at multiple points in their journey, both pre-shop and during purchase, both in-store and online.

We use a combination of trade and consumer promotion and messaging.

Trade advertising and promotion includes placement fees, cooperative advertising, feature advertising in distribution catalogs and in-store merchandising in secondary locations.

Consumer advertising and promotion is used to build brand awareness and equity, drive trial to bring in new consumers and increase consumption.

Paid social and digital advertising and public relations programs are the main drivers of brand awareness.

Trial and conversion tactics include, but are not limited to, product search on Google and e-commerce sites, digital coupons, in-store product sampling, direct mail and e-consumer relationship programs.

Additionally, brand specific websites and social media pages are used to engage consumers with lifestyle, product and usage information related to specific brands.

We also utilize partnerships to help create awareness and advocacy.

We partner with various influencers to help increase brand reach and relevance.

For example, in the United States, our Earth’s Best ® brand has an agreement with PBS Kids and Sesame Workshop.

In addition, several of our brands are proud supporters of Folds of Honor, a non-profit organization that provides educational sponsorships to military families.

There is no guarantee that these promotional investments will be successful.

New Product Initiatives Through Research and Development

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In addition to developing new products, the research and development staff routinely reformulates and improves existing products based on advances in ingredients, packaging and technology.

We incurred approximately $11.1 million in company-sponsored research and development activities, consisting primarily of personnel-related costs, in fiscal 2019 , $9.7 million in 2018 and $10.1 million in 2017 .

In addition to our Company-sponsored research and development activities, in order to quickly and economically introduce our new products to market, we may partner with contract manufacturers that make our products according to our formulas or other specifications.

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During fiscal 2020, 2019 and 2018, approximately 59% , 58% and 59%, respectively, of our revenue was derived from products manufactured at our own facilities.

Our United States segment operates the following manufacturing facilities:

Boulder, Colorado (two facilities), which produce Celestial Seasonings ® teas and Rudi’s Organic Bakery ® organic breads, buns, bagels, tortillas, wraps and soft pretzels and Rudi’s Gluten-Free Bakery ® gluten-free products including breads, buns and tortillas;

Our North America reportable segment operates the following manufacturing facilities:

• Boulder, Colorado, which produces Celestial Seasonings ® teas;

• Moonachie, New Jersey, which produces Terra ® root vegetable and potato chips;

• Mountville, Pennsylvania, which produces Sensible Portions ® snack products;

Hereford, Texas, which produces Arrowhead Mills ® cereals, flours and baking ingredients;

• Ashland, Oregon, which produces MaraNatha ® nut butters;

• Bell, California, which produces Alba Botanica ® , Avalon Organics ® , JASON ® and Earth’s Best ® personal care products;

Our United Kingdom segment operates the following manufacturing facilities:

Histon, England, which produces our ambient grocery products including Hartley’s ® , Frank Cooper’s ® , Robertson’s ® and Gale’s ® ;

Newport, Wales, which produces our Clarks™ sweeteners, syrups and dessert sauces;

• Trenton, Ontario, which produces Yves Veggie Cuisine ® plant-based products;

• Vancouver, British Columbia, which produces Yves Veggie Cuisine ® plant-based products;

• Mississauga, Ontario, which produces our Live Clean ® and other personal care products.

Our International reportable segment operates the following manufacturing facilities:

• Histon, England, which produces our ambient grocery products including Hartley’s ® , Frank Cooper’s ® , Robertson’s ® , Clarks™ and Gale’s ® ;

• Grimsby, England, which produces our New Covent Garden Soup Co.

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• Clitheroe, England, which produces our Farmhouse Fare ® hot-eating desserts;

Leeds, England, which prepares our fresh fruit products;

• Fakenham, England, which produces Linda McCartney’s ® meat-free frozen and chilled foods;

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• North Yorkshire, England, which produces Yorkshire Provender ® chilled soups;

Larvik, Norway, which produces our GG UniqueFiber TM products.

Our Rest of World segment operates the following manufacturing facilities:

Trenton, Ontario, which produces Yves Veggie Cuisine ® plant-based products;

Vancouver, British Columbia, which produces Yves Veggie Cuisine ® plant-based products;

Mississauga, Ontario, which produces our Live Clean ® and other personal care products;

• Larvik, Norway, which produces our GG UniqueFiber™ products;

• Troisdorf, Germany, which produces Natumi ® , Rice Dream ® , Lima ®, Joya ® and other plant-based beverages;

Andiran, France, which produces our Danival ® organic food products;

• Oberwart, Austria, which produces our Dream ® , Lima ®, and Joya ® plant-based foods and beverages;

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Properties” of this Form 10-K for more information on the manufacturing facilities that we operate.

In addition to the products manufactured in our own facilities, independent third-party manufacturers, who are referred to in our industry as “co-packers,” manufacture many of our products.

In addition to the products manufactured in our own facilities, independent third-party contract manufacturers, who are referred to in our industry as “co-packers,” manufacture many of our products.

In general, utilizing co-packers provides us with the flexibility to produce a large variety of products and the ability to enter new categories quickly and economically.

Our contract manufacturers have been selected based on their production capabilities, capitalization and their specific product category expertise, and we expect to continue to partner with them to improve and expand our product offerings.

Our contract manufacturers have been selected based on their production capabilities, capitalization and their specific product category

expertise, and we expect to continue to partner with them to improve and expand our product offerings.

During fiscal 2020, 2019 and 2018, approximately 41% , 42% and 41%, respectively, of our revenue was derived from products manufactured by co-packers.

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Suppliers of Ingredients and Packaging

Agricultural commodities and ingredients, including almonds, corn, dairy, fruit and vegetables, oils, rice, soybeans and wheat, are the principal inputs used in our products.

Agricultural commodities and ingredients, including almonds, corn, dairy, fruit and vegetables, oils, rice, grains and soybeans are the principal inputs used in our food products.

Plant-based surfactants, glycerin and alcohols are the main inputs used in our personal care products.

Our certified organic and natural raw materials as well as our packaging materials are obtained from various suppliers around the world.

The Company works with its suppliers to ensure the quality and safety of their ingredients and that such ingredients meet our specifications and comply with applicable regulations.

These assurances are supported by our purchasing contracts, supplier expectations manual and technical assessments, including questionnaires, scientific data, certifications, affidavits, certificates of analysis and analytical testing, where required.

These assurances are supported by our purchasing contracts, supplier expectations manual, supplier code of conduct, and technical assessments, including questionnaires, scientific data, certifications, affidavits, certificates of analysis and analytical testing, where required.

Our purchasers and quality team visit major suppliers around the world to procure competitively priced, quality ingredients that meet our specifications.

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Many of these competitors enjoy significantly greater resources.

Large mainstream conventional packaged goods competitors include Campbell Soup Company, Mondelez International, Inc., General Mills, Inc., Danone S.A., The J.M.

Smucker Company, Kellogg Company, The Kraft Heinz Company, Nestle S.A., PepsiCo, Inc., The Hershey Company, Conagra Brands, Inc.

and Unilever, and conventional personal care products companies with whom we compete include, but are not limited to, The Proctor & Gamble Company, Johnson & Johnson and Colgate-Palmolive Company.

Large mainstream conventional packaged goods competitors include Campbell Soup Company, Conagra Brands, Inc., Danone S.A., General Mills, Inc., The Hershey Company, The J.M.

Smucker Company, Kellogg Company, Mondelez International, Inc., Nestle S.A., PepsiCo, Inc.

and Unilever, and conventional personal care products companies with whom we compete include, but are not limited to, Colgate-Palmolive Company, Johnson & Johnson and The Proctor & Gamble Company.

Certain of these large mainstream conventional packaged foods and personal care companies compete with us by selling both conventional products and natural and/or organic products.

Natural and organic packaged foods competitors include Chobani LLC, Nature’s Bounty Inc., Clif Bar & Company and Amy’s Kitchen.

Natural and organic packaged foods competitors include Amy’s Kitchen, Chobani LLC and Nature’s Bounty Inc.

In addition to these competitors, in each of our categories we compete with many regional and small, local niche brands.

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We believe that brand awareness is a significant component in a consumer’s decision to purchase one product over another in highly competitive consumer products industries.

Our trademarks and brand names for the product lines referred to herein are registered in the United States, Canada, the United Kingdom and European Union and a number of other foreign countries, and we intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs.

We generally register our trademarks and brand names in the United States, Canada, the European Union, and the United Kingdom and/or other foreign countries depending on the area of distribution of the applicable products, and we intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs.

We also copyright certain of our artwork and package designs.

We own the trademarks for our principal products, including Alba Botanica ® , Almond Dream ® , Arrowhead Mills ® , Avalon Organics ® , Bearitos ® , Better Bean ® , BluePrint ® , Casbah ® , Celestial Seasonings ® , Coconut Dream ® , Cully & Sully ® , Clarks™, Danival ® , DeBoles ® , Earth’s Best ® , Earth’s Best TenderCare ® , Ella’s Kitchen ® , Europe’s Best ® , Farmhouse Fare™, Frank Cooper’s ® , Gale’s ® , Garden of Eatin’ ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , JASON ® , Johnson’s Juice Co.

® , Joya ® , Kosher Valley ® , Lima ® , Live Clean ® , MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

® , Nile Spice ® , Orchard House®, Queen Helene ® , Rice Dream ® , Robertson’s ® , Rudi’s Organic Bakery ® , Sensible Portions ® , Soy Dream ® , Spectrum ® , Sun-Pat ® , Sunripe ® , SunSpire ® , Terra ® , The Greek Gods ® , Walnut Acres Organic ® , Westbrae ® , WestSoy ® , William’s™, Yorkshire Provender ® and Yves Veggie Cuisine ® .

We also have trademarks for many of our best-selling Celestial Seasonings teas, including Country Peach Passion ® , Lemon Zinger ® , Mandarin Orange Spice ® , Raspberry Zinger ® , Red Zinger ® , Sleepytime ® , Tension Tamer ® and Wild Berry Zinger ® .

We also market products under brands licensed under trademark license agreements, including Linda McCartney’s™, Mary Berry ® , Rose’s ® , the Sesame Street name and logo and other Sesame Workshop intellectual property on certain of our Earth’s Best ® products, and the Paddington Bear image on certain of our Robertson’s ® products.

We own registered trademarks for our principal products, including Alba Botanica ® , Almond Dream ® , Avalon Organics ® , Celestial Seasonings ® , Coconut Dream ® , Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Frank Cooper’s ® , Gale’s ® , Garden of Eatin’ ® , Hain Pure Foods ® , Hartley’s ® , Health Valley ® , Imagine ® , JASON ® , Joya ® , Lima ® , Live Clean ® , MaraNatha ® , Natumi ® , New Covent Garden Soup Co.

® , One Step ® , Orchard House®, Queen Helene ® , Rice Dream ® , Robertson’s ® , Sensible Portions ® , Soy Dream ® , Spectrum ® , Sun-Pat ® , Terra ® , The Greek Gods ® , Yorkshire Provender ® and Yves Veggie Cuisine ® .

We also have registered trademarks for many of our best-selling Celestial Seasonings teas, including Country Peach Passion ® , Lemon Zinger ® , Mandarin Orange Spice ® , Raspberry Zinger ® , Red Zinger ® , Sleepytime ® , Tension Tamer ® and Wild Berry Zinger ® .

We also market products under brands licensed under trademark license agreements, including Linda McCartney’s ® , the Sesame Street name and logo and other Sesame Workshop intellectual property on certain of our Earth’s Best ® products, as well as the Paddington Bear image on certain of our Robertson’s ® products.

Government Regulation

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Under various statutes, these agencies prescribe and establish, among other things, the requirements and standards for quality, safety and representation of our products to the consumer in labeling and advertising.

Internationally, we are subject to the laws and regulatory authorities of the foreign jurisdictions in which we manufacture and sell our products, including the Food Standards Agency in the United Kingdom, the Canadian Food Inspection Agency in Canada and European Food Safety Authority which supports the European Commission, as well as individual country, province, state and local regulations.

Internationally, we are subject to the laws and regulatory authorities of the foreign jurisdictions in which we manufacture and sell our products, including the Food Standards Agency in the United Kingdom, the Canadian Food Inspection Agency in Canada and the European Food Safety Authority which supports the European Commission, as well as individual country, province, state and local regulations.

Quality Control

We utilize a comprehensive food safety and quality management program, which employs strict manufacturing procedures, expert technical knowledge on food safety science, employee training, ongoing process innovation, use of quality ingredients and both internal and independent auditing.

In the United States, each of our own manufacturing facilities has a Food Safety Plan (“FSP”), which focuses on preventing food safety risks and is compliant with the requirements set forth under the Food Safety and Modernization Act (“FSMA”).

In addition, each facility has at least one Preventive Controls Qualified Individual (“PCQI”) who has successfully completed training in the development and application of risk-based preventive controls at least equivalent to that received under a standardized curriculum recognized by the FDA.

All of our Hain-owned manufacturing sites and a significant number of our co-packers are certified against a standard recognized by the Global Food Safety Initiative (“GFSI”) including Safe Quality Foods (“SQF”) and British Retail Consortium (“BRC”).

In the United States, each of our own food manufacturing facilities has a Food Safety Plan (“FSP”), which focuses on preventing food safety risks and is compliant with the requirements set forth under the Food Safety and Modernization Act (“FSMA”).

In addition, each such facility has at least one Preventive Controls Qualified Individual (“PCQI”) who has successfully completed training in the development and application of risk-based preventive controls at least equivalent to that received under a standardized curriculum recognized by the FDA.

Substantially all of our Hain-owned manufacturing sites and a significant number of our co-packers are certified against a standard recognized by the Global Food Safety Initiative (“GFSI”) including Safe Quality Foods (“SQF”) and British Retail Consortium (“BRC”).

These standards are integrated food safety and quality management protocols designed specifically for the food sector and offer a comprehensive methodology to manage food safety and quality.

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• our policies related to corporate governance, including our Code of Business Conduct and Ethics (“Code of Ethics”) applying to our directors, officers and employees (including our principal executive officer and principal financial and accounting officers) that we have adopted to meet the requirements set forth in the rules and regulations of the SEC and Nasdaq;

the charters of the Audit, Compensation and Corporate Governance and Nominating Committees of our Board of Directors.

• the charters of the Audit, Compensation, Corporate Governance and Nominating, and Strategy Committees of our Board of Directors.

If the Company ever were to amend or waive any provision of its Code of Ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, the Company intends to satisfy its disclosure obligations, if any, with respect to any such waiver or amendment by posting such information on its website set forth above rather than by filing a Current Report on Form 8-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business