Item 1. Business
Item 1. Business
Overview
The Hain Celestial Group, Inc., a Delaware corporation (collectively, along with its subsidiaries, the “Company,” and herein referred to as “Hain Celestial,” “we,” “us” and “our”), was founded in 1993 and is headquartered in Lake Success, New York. The Company’s mission has continued to evolve since its founding, with health and wellness being the core tenet. The Company continues to be a leading marketer, manufacturer and seller of organic and natural, “better-for-you” products by anticipating and exceeding consumer expectations in providing quality, innovation, value and convenience. The Company is committed to growing sustainably while continuing to implement environmentally sound business practices and manufacturing processes. 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 providing consumers with the opportunity to lead A Healthier Way of Life ® . The Company’s food and beverage brands include Celestial Seasonings ® , Clarks ™ , Cully & Sully ® , Earth’s Best ® , Ella’s Kitchen ® , Frank Cooper’s ® , Garden of Eatin’ ® , Hartley’s ® , Health Valley ® , Imagine ® , Joya ® , Lima ® , Linda McCartney’s ® (under license), MaraNatha ® , Natumi ® , New Covent Garden Soup Co. ® , ParmCrisps ® , Robertson’s ® , Rose’s ® (under license), Sensible Portions ® , Spectrum ® , Sun-Pat ® , Terr a ® , The Greek Gods ® , Thinsters ® , Yorkshire Provender ® and Yves Veggie Cuisine ® . The Company’s personal care brands include Alba Botanica ® , Avalon Organics ® , JASON ® , Live Clean ® , and Queen Helene ® .
Acquisition
On December 28, 2021, the Company acquired all outstanding stock of Proven Brands, Inc. (and its subsidiary That's How We Roll LLC) and KTB Foods Inc., collectively doing business as "That's How We Roll" ("THWR"), the producer and marketer of ParmCrisps ® and Thinsters ® . See Note 4, Acquisitions and Dispositions, for details.
Discontinued Operations
The Company completed the sale of the former Tilda operating segment and the Hain Pure Protein reportable segment; these dispositions represented strategic shifts that had a major impact on the Company’s operations and financial results. Accordingly, 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 prior periods (see Note 4, Acquisitions and Dispositions, in the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K ). All footnotes exclude discontinued operations unless otherwise noted.
Environmental, Social and Governance
We are focused on growing our business sustainably by delivering long-term value for our customers, suppliers, stockholders, employees and the communities where we live and work. As part of our vision to maximize stakeholder value, we are committed to incorporating environmental, social and related governance (“ESG”) principles into our business strategies and organizational culture. The “Healthier Way” framework (Healthier Planet, Products, and People) set out in our most recent ESG Report (available at hain.com/company/impact ) provides our guiding principles for ESG initiatives.
Our ESG Reports and the other information available at hain.com/company/impact are not, and shall not be deemed to be, a part of this Form 10-K or incorporated into any of our other filings made with the Securities and Exchange Commission (the “SEC”).
Human Capital Resources
As of June 30, 2022, we had appro ximately 3,078 employees, with approximately 49% located in North America and approximately 51% located outside of North America. Approximately 65% of our employees in North America and approximately 60% of our employees outside of North America were based in our production facilities. Substantially all of our employees are full-time, permanent employees.
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Our employees are critical to our success. The following programs, initiatives and principles encompass some of the human capital objectives and measures that we focus on in managing our business and in seeking to attract and retain a talented workforce.
Our Culture and Our Vision, Mission and Values
Our culture is shaped by our vision, mission and values. Our vision is to inspire healthier living for all. To achieve this aspiration, our mission is to build enduring health and wellness brands that are known and loved by consumers and enrich the lives of employees and all of our stakeholders. We live by our values of teamwork, integrity and entrepreneurship – we think and act with a broad company perspective, we do the right thing, and we think in an innovative way and challenge the status quo.
Diversity and Inclusion
People have always been our greatest asset. They are the very heart of our Company, and we believe everyone should feel encouraged, respected and welcomed in our workplace.
Diversity and inclusion drives success, and we believe that our employees’ diverse backgrounds and experiences are essential to helping us all to continue to thrive internally and deliver innovative products to our customers. We promote fairness by practicing equal opportunity in all decisions about hiring, compensation, training, promotions and every other aspect of employment.
We maintain a Diversity & Inclusion (“D&I”) Council in North America to create and foster a workplace that reflects and contributes to the diverse, global communities in which we do business. We are continuing to work to build our D&I efforts into recruitment, retention and internal mobility.
As of June 30, 2022, our global wor kforce was 59% male and 41% female. In the United States, on an employee self-reported basis, the racial/ethnic composition of our workforce was approximately 42% Hispanic or Latino, 38% White, 12% Black or African American, 5% Asian and 3% other. We make additional workforce demographic data available at hain.com/impact . The information available at hain.com/impact is no t a part of this Form 10-K or incorporated into any of our other filings made with the SEC.
Employee Health and Safety
Employee safety is always front and center. We invest in the health, safety, development and well-being of our employees. In an effort to ensure workplace safety, we train employees on how to follow our detailed, written safety standards and procedures, and the law, and to watch for and report anything potentially harmful. Our safety key performance indicators are reviewed weekly, monthly and annually to ensure quick feedback and to address safety issues as soon as they arise.
Learning and Development
We offer a number of programs that help our employees progress in their careers. These programs include access to online learning and development tools as well as many additional local initiatives across our global locations to support employees on their career paths and develop leadership qualities and career skills in our global workforce.
Benefits
Our employee benefits vary by region but generally include:
• Medical, Dental, and Vision Benefits;
• Retirement Savings and Pension Plans;
• Commuter Benefits;
• Wellness Initiatives;
• Tuition Reimbursement; and
• Paid Parental Leave including births, adoptions or placements of foster children.
Employee Satisfaction and Engagement
We aim to foster a culture of open communications and have implemented a global systematic employee engagement process in which employees are surveyed periodically. Our Executive Leadership Team regularly reviews the results and considers and implements action items to address areas that need improvement. We have additional regional programs and policies in place to
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encourage open communications with management and Human Resources about employees’ ideas, concerns and how they are doing.
Products
Our brand portfolio focuses on growing global brands in categories where we believe we have the most potential. We continuously evaluate our existing products for quality, taste, nutritional value and cost and make improvements where possible. Conversely, we discontinue products or stock keeping units (“SKUs”) when sales of those items do not warrant further production. The categories we have identified are called Turbocharge, Targeted Investment, Fuel and Simplify:
• The Turbocharge brands are leading-share brands in what we believe to be very high-growth categories. The Turbocharge brands are made up of snacks as well as plant-based meat and non-dairy beverages. Our snacks businesses include brands both within the United States and in our International segment (“International”), while our meat and dairy alternatives businesses are concentrated outside the United States. 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. The Turbocharge brands accounted for approximately 39% of our consolidated net sales in fiscal 2022, 36% in fiscal 2021 and 32% in fiscal 2020.
• The Targeted Investment brands are made up of leading-share brands in lower-growth categories. To date, we have demonstrated our ability to drive market share and reinvigorate these categories, and we expect that we can continue to do this in the future. The Targeted Investment brands are made up of tea, baby, yogurt, and personal care products. The Targeted Investment brands accounted for approximately 35% of our consolidated net sales in fiscal 2022, 34% in fiscal 2021 and 32% in fiscal 2020.
• The Fuel brands are stable brands that will be leveraged to fuel investment in the Turbocharge and Targeted Investment categories. Fuel brands are made up of premium pantry brands with scale, in categories such as soup, cooking oils and nut butters. The Fuel brands accounted for approximately 21% of our consolidated net sales in fiscal 2022, 20% in fiscal 2021 and 19% in fiscal 2020.
• The Simplify brands are subscale declining businesses that we believe have limited long-term potential for the Company, and therefore will be managed for profit until they are potentially divested, likely over the course of the next several years. Simplify brands accounted for approximately 5% of our consolidated net sales in fiscal 2022, 10% in fiscal 2021 and 17% in fiscal 2020.
We refer to the Turbocharge brands and Targeted Investment brands together as our Growth brands.
Seasonality
Certain of our product lines have seasonal fluctuations in demand. Hot tea, hot-eating desserts and soup sales are stronger in colder months, while sales of snack foods, sunscreen and certain of our 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. In recent years, net sales and diluted earnings per share in the first fiscal quarter have typically been the lowest of our four quarters.
Working Capital
For information relating to our cash flows from operations and working capital items, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K.
Segments
Our organization structure consists of two geographic based reportable segments: North America and International. Our North America reportable segment consists of the United States and Canada as operating segments. The International reportable segment is made of three operating segments: United Kingdom, Ella’s Kitchen UK and Europe. This structure is in line with how our Chief Operating Decision Maker assesses our performance and allocates resources.
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
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expenses (which are a component of selling, general and administrative expenses), impairment and acquisition related expenses, restructuring, integration and other charges.
The following table presents the Company’s net sales by reportable segment for the fiscal years ended June 30, 2022, 2021 and 2020 (amounts in thousands, other than percentages):
Fiscal Year Ended June 30,
2022 2021 2020
North America $ 1,163,132 61 % $ 1,104,128 56 % $ 1,171,478 57 %
International 728,661 39 % 866,174 44 % 882,425 43 %
Total $ 1,891,793 100 % $ 1,970,302 100 % $ 2,053,903 100 %
North America Segment:
United States
Our products are sold throughout the United States. Our customer base consists principally of specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, drug and convenience stores. Our products are sold through a combination of direct salespeople, brokers and distributors. We believe that our direct salespeople combined with brokers and distributors provide an effective means of reaching a broad and diverse customer base. Brokers act as agents for us within designated territories and receive commissions. A portion of our direct sales force is organized into dedicated teams to serve our significant customers.
A significant portion of the products marketed by us are sold through independent distributors. Food distributors purchase products from us for resale to retailers.
The brands sold by the United States operating segment include:
Turbocharge
The Turbocharge brands are leading-share brands in what we believe to be very high-growth categories and they include snacks. Our snack food products include Sensible Portions ® snack products including Garden Veggie Straws ® , Garden Veggie Chips and Apple Straws ® , Terra ® varieties of root vegetable chips, potato chips, and other exotic vegetable chips, Garden of Eatin’ ® tortilla chips, and ParmCrisps ® .
Targeted Investment
The Targeted Investment brands are made up of leading-share brands in lower-growth categories and they include tea, baby food, yogurt, and personal care.
Our tea products are marketed under the Celestial Seasonings ® brand and include more than 100 varieties of herbal, green, black, wellness, rooibos and chai teas, with well-known names and products such as Sleepytime ® , Lemon Zinger ® , Red Zinger ® , Cinnamon Apple Spice, Bengal Spice ® , Country Peach Passion ® and Tea Well ® .
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) brands.
Yogurt products include The Greek Gods ® Greek-style yogurt products.
Our personal care products include hand, skin, hair and oral care products, sun care products and deodorants under the Alba Botanica ® , Avalon Organics ® , JASON ® and Queen Helene ® brands.
Fuel and Simplify
The Fuel brands are stable brands that will be leveraged to fuel investment in the Turbocharge and Targeted Investment categories. Fuel brands are made up of premium pantry brands with scale, in categories such as soup, cooking oils and nut butters. The Simplify brands are subscale declining businesses that have limited long-term potential for the Company, and therefore will be managed for profit until they are potentially divested, likely over the course of the next several years. Fuel and Simplify b rands include the following: Spectrum ® culinary oils, vinegars and condiments, Spectrum Essentials ® nutritional oils
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and supplements, MaraNatha ® nut butters, Imagine ® broths, soups and gravies, Hain Pure Foods ® condiments, Health Valley ® cereal bars and soups, and Hollywood ® oils.
Canada
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 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 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 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. 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 products and deodorants under the Alba Botanica ® , Avalon Organics ® , JASON ® , and Live Clean ® brands.
International Segment:
United Kingdom
In the United Kingdom, our products include soups, 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 products sold by our United Kingdom operating segment include New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups, private label and Farmhouse Fare ™ hot-eating desserts, Linda McCartney’s ® (under license) chilled and frozen plant-based meals, Hartley’s ® jams, fruit spreads and jellies, Sun-Pat ® nut butters, Clarks™ natural sweeteners and Robertson’s ® , Frank Cooper’s ® and Rose’s ® (under license) marmalades. 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, 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. 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.
Ella’s Kitchen UK
Ella's Kitchen UK is a manufacturer and distributor of premium organic infant and toddler foods under the Ella's Kitchen ® brand. Our products are mostly sold in grocery stores and organic food stores throughout the United Kingdom and Europe.
Europe
Our products sold by the Europe operating segment include, among others, products sold under the Joya ® , Lima ® and Natumi ® brands. 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. Our Natumi ® brand includes plant-based beverages, including rice, soy, oat and spelt. Our Joya ® brand includes soy, oat, rice and nut-based drinks as well as plant-based yogurts, desserts, creamers and tofu. We also sell our Hartley’s ® jams, fruit spreads and jellies, Terra ® varieties of root vegetable and potato chips, Celestial Seasonings ® teas, Linda McCartney’s ® (under license) chilled and frozen plant-based meals, Cully & Sully ® chilled soups and ready meals, and private label products in 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.
Customers
Walmart Inc. and its affiliates together accounted for approximately 15%, 11% and 12% of our consolidated sales for the fiscal years ended June 30, 2022, 2021 and 2020, respectively, which were primarily related to the United States, Canada and United Kingdom operating segments. No other customer accounted for at least 10% of our net sales in any of the past three fiscal years.
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Foreign Operations
We sell our products to customers in more tha n 75 co untries. Sales outside of the United States represented approximately 45%, 52% and 51% of our consolidated net sales in fiscal 2022, 2021 and 2020, respectively.
Marketing
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 advertising and promotion. Trade advertising and promotion includes placement fees, cooperative advertising, feature advertising in distribution catalogs and in-store merchandising in prominent and 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, 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, one of our personal care brands, Alba Botanica ® , had a full year partnership with USA Olympic and World Tour Surfer, Caroline Marks. Also, our Earth’s Best ® brand has an agreement with PBS Kids and Sesame Workshop in the United States, leveraging popular characters for on and off packaging communications.
New Product Initiatives Through Research and Development
Innovation, including new product development, is a key component of our growth strategy. We continuously seek to understand our consumers and develop products that address their desire for organic, natural and better-for-you alternatives to conventional packaged foods and personal care products. We have a demonstrated track record of extending our product offerings into other product categories. A team of professional product developers, including microbiologists, nutritionists, food scientists, chefs and chemists, work to develop products to meet changing consumer needs. Our research and development staff incorporates product ideas from all areas of our business in order to formulate new products. 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. 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. The Company also partners with certain customers from time to time on exclusive customer initiatives. The Company’s research and development expenditures do not include the expenditures on such activities undertaken by co-packers and suppliers who develop numerous products on behalf of the Company and on their own initiative with the expectation that the Company will accept their new product ideas and market them under the Company’s brands.
Production
Manufacturing
During fiscal 2022, 2021 and 2020, approximately 51% , 61% and 59%, respectively, of our revenue was derived from products manufactured at our own facilities.
Our North America reportable segment operates the following manufacturing facilities:
• Boulder, Colorado, which produces Celestial Seasonings ® teas;
• Mountville, Pennsylvania, which produces Sensible Portions ® and Terra ® snack products;
• Bell, California, which produces Alba Botanica ® , Avalon Organics ® , and JASON ® personal care products;
• Lancaster, Pennsylvania, which produces snack products ;
• York, Pennsylvania, which produces ParmCrisps ® ;
• Trenton, Ontario, which produces Yves Veggie Cuisine ® plant-based products;
• Vancouver, British Columbia, which produces Yves Veggie Cuisine ® plant-based products; and
• Mississauga, Ontario, which produces our Live Clean ® and other personal care products.
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Our International reportable segment operates the following manufacturing facilities:
• Histon, England, which produces our ambient grocery products inc luding Hartley’s ® , Frank Cooper’s ® , Robertson’s ® and Clarks™;
• Grimsby, England, which produces our New Covent Garden Soup Co. ® and Yorkshire Provender ® chilled soups;
• Clitheroe, England, which produces our private label and Farmhouse Fare TM hot-eating desserts;
• Fakenham, England, which produces Linda McCartney’s ® (under license) meat-free frozen a nd chilled foods;
• Troisdorf, Germany, which produces Natumi ® , Lima ® , Joya ® and other plant-based beverages and private label products;
• Oberwart, Austria, which produces our Lima ® and Joya ® plant-based foods and beverages, creamers, cooking creams and private label products; and
• Schwerin, Germany, which also produces our Lima ® and Joya ® plant-based foods and beverages and private label products.
See “Item 2: Properties” of this Form 10-K for more information on the manufacturing facilities that we operate.
Contract Manufacturers
In addition to the products manufactured in our own facilities, independent third-party contract manufacturers, who are referred to in our industry as co-manufacturers or 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. During fiscal 2022, 2021 and 2020, approximately 49%, 39% and 41%, respec tively, of our sales were derived from products manufactured by co-packers. We require that our co-packers comply with all applicable regulations and our quality and food safety program requirements, and compliance is verified through auditing and other activities. Additionally, the co-packers are required to ensure our products are manufactured in accordance with our finished goods specifications to ensure we meet customer expectations.
Suppliers of Ingredients and Packaging
Agricultural commodities and ingredients, including vegetables, fruits, oils, grains, beans, nuts, tea and herbs, spices, and dairy products, are the principal inputs used in our food and beverage products. Plant-based surfactants, glycerin and alcohols are the main inputs used in our personal care products. Our primary packaging supplies are cartons, pouches, printed film, paper, paperboard and jars. We strive to maintain a global supplier base that provides innovative ideas and sustainable packaging alternatives.
Our raw materials and 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, 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.
We maintain long-term relationships with many of our suppliers. Purchase arrangements with ingredient suppliers are generally made annually. Purchases are made through purchase orders or contracts, and price, delivery terms and product specifications vary.
Agricultural commodities and ingredients are subject to price volatility which can be caused by a variety of factors. Our input costs began to increase significantly beginning in the latter part of fiscal 2021. That inflationary environment extended in fiscal 2022, and we expect the inflationary environment to continue throughout fiscal 2023. We attempt to mitigate the input price volatility by negotiating and entering into purchase arrangements with our suppliers and by adjusting the sale price of our products.
Competition
We operate in a highly competitive environment. Our products compete with both large conventional packaged goods companies and natural and organic packaged foods companies. Many of these competitors enjoy significantly greater resources. Large conventional packaged foods 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.,
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PepsiCo, Inc. and Unilever PLC. Large conventional personal care products companies with whom we compete include, but are not limited to, The Clorox Company, Colgate-Palmolive Company, Johnson & Johnson, The Procter & Gamble Company, S. C. Johnson & Son, Inc. and Unilever PLC. Certain of these large conventional packaged foods and personal care companies compete with us by selling both conventional products and natural and/or organic products. In addition to these competitors, in each of our categories we compete with many regional and small, local niche brands. Given limited retailer shelf space and merchandising events, competitors actively support their respective brands with marketing, advertising and promotional spending. In addition, most retailers market similar items under their own private label, which compete for the same shelf space.
Competitive factors in the packaged foods industry include product quality and taste, brand awareness and loyalty, product variety, interesting or unique product names, product packaging and package design, shelf space, reputation, price, advertising, promotion and nutritional claims.
Trademarks
We believe that brand awareness is a significant component in a consumer’s decision to purchase one product over another in the highly competitive consumer packaged goods industry. 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. We intend to keep these filings current and seek protection for new trademarks to the extent consistent with business needs. We monitor trademark registers worldwide and take action to enforce our rights as we deem appropriate. We believe that our trademarks are significant to the marketing and sale of our products and that the inability to utilize certain of these names and marks, and/or the inability to prevent third parties from using similar names or marks, could have a material adverse effect on our business.
We also market products under brands licensed under trademark license agreements, including Linda McCartney’s ® , Rose’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
We are subject to extensive regulations in the United States by federal, state and local government authorities. In the United States, the federal agencies governing the manufacture, marketing and distribution of our products include, among others, the Federal Trade Commission (“FTC”), the United States Food & Drug Administration (“FDA”), the United States Department of Agriculture (“USDA”), the United States Environmental Protection Agency (“EPA”) and the Occupational Safety and Health Administration (“OSHA”). 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 Canadian Food Inspection Agency, Health Canada, Food Standards Agency in the United Kingdom, and the European Food Safety Authority.
Quality Control
We utilize a comprehensive product 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 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.
We conduct audits of our contract manufacturers to address topics such as allergen control; ingredient, packaging and product specifications; and sanitation. Under FSMA, each of our contract manufacturers is required to have a FSP, a Hazard Analysis Critical Control Plant (“HACCP”) plan or a hazard analysis critical control points plan that identifies critical pathways for contaminants and mandates control measures that must be used to prevent, eliminate or reduce relevant food-borne hazards.
Independent Certifications
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Substantially all of our Hain-owned manufacturing sites and a significant number of our contract manufacturers are certified against a recognized standard such as the Global Food Safety Initiative (“GFSI”), which includes Safe Quality Foods (“SQF”) and British Retail Consortium (“BRC”), or ISO 9001 Quality Management Systems and ISO 22716 GMP Cosmetic and Personal Care. All facilities where our food products are manufactured are GFSI compliant. These standards are integrated product safety and quality management protocols designed specifically for the food and personal care sectors and offer a comprehensive methodology to manage product safety and quality. Certification provides an independent and external validation that a product, process or service complies with applicable regulations and standards.
In the United States, our organic products are certified in accordance with the USDA’s National Organic Program through Quality Assurance International (“QAI”), a third-party certifying agency. For products marketed as organic outside of the United States, we use accredited certifying agencies to ensure compliance with country-specific government regulations for selling organic products or reciprocity, where available.
Many of our products are certified kosher under the supervision of accredited agencies including The Union of Orthodox Jewish Congregations and “KOF-K” Kosher Supervision.
We also work with other non-governmental organizations such as NSF International, which developed the NSF/ANSI 305 Standard for Personal Care Products Containing Organic Ingredients and provides third-party certification through QAI for certain of our personal care products. In addition, we work with other nongovernmental organizations such as the Gluten Free Intolerance Group, Fair Trade USA, Environmental Working Group, The Skin Cancer Foundation, Coalition for Consumer Information on Cosmetics/ Leaping Bunny, The Roundtable on Sustainable Palm Oil and the Non-GMO Project.
Company Website and Available Information
The following information can be found, free of charge, in the “Investor Relations” section of our corporate website at ir.hain.com :
• our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC;
• 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 The Nasdaq Stock Market LLC ; and
• 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.
The Company may use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s investor relations website at ir.hain.com . In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting “E-mail Alerts” under the "IR Resources" section of our investor relations website. Information on the Company’s website is not incorporated by reference herein and is not a part of this Form 10-K.