Transcript Slide 1

NACDS
A Healthy Way Of Life
Natural Personal Care
Natural Personal Care products are experiencing tremendous growth with a
65% increase versus last year.
 Increasing awareness of type and quality of ingredients has
encouraged consumers to seek out more natural, organic and
ecologically minded products.
 Trend toward individuality and products that reflect consumer’s values
and attitudes
 Skin Care currently accounts for 60% of Natural dollar sales, although
growth is evident across all product types indicating the depth of
consumer’s interest in natural products.
 Successful natural brands support products with eco-conscious
packaging, a company wide commitment to sustainability and a “green”
lifestyle
 Over 40% of the population participates in LOHAS (Lifestyles of Health
and Sustainability) while 60% of consumers are more likely to purchase
*NMI Institute
“Hot Consumer Tren ds 2007”
products
a company that is “mindful of their impact
on the
A Healthy
Wayfrom
Of Life
Natural Personal Care
SPINS
eks
Current 24 Weeks
Current
52 Weeks
4Wks
End 2007-Feb-24
Current 12 Weeks
Current 24 Weeks
Current 52 Wee
$ % Chg Current Dollars $ % Chg Current
Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $
Current Dollars
Dollars $$%%Chg
TOTAL US
0.5%SKIN CARE
$60,698,058
6.7%
$132,470,407
10.0% $31,179,157
$10,048,608 (0.6%)
0.5%
$60,698,058
6.7% $132,470,407
Category is showing steady
0.6%SOAP &$33,638,188
4.6%
$70,395,497
10.1% $17,117,235
$5,232,112 (2.2%)
0.6%
$33,638,188
4.6%
$70,395,497
BATH PREPARATIONS
increases at 52 weeks +9.7%
7.3%HAIR PRODUCTS
$30,360,008
9.9%
$64,383,909
12.4% $15,277,961
$5,118,213
5.4%
7.3%
$30,360,008
9.9%
$64,383,909
overall.
2.4%ORAL CARE
$19,682,845
4.9%
$41,805,921
8.4%
$3,284,529
1.2%
$9,947,692
2.4%
$19,682,845
4.9%
$41,805,921
0.8%PERSONAL
$15,867,928
4.4%
$33,682,190
7.7%
$2,741,235
0.4%
$8,206,983
0.8% is the
$15,867,928
$33,682,190
CARE & FIRST AID
Hair Care
fastest4.4%
growing
(3.5%)DEODORANTS
$7,481,715
1.3%
$16,987,916
7.5%
$1,221,108 (2.8%)
$3,705,931
(3.5%)while
$7,481,715
1.3% is the
$16,987,916
category,
Skin Care
(15.5%)COSMETICS
$6,856,115
(5.2%)
$15,214,767
4.8%
$995,817 (20.9%)
$3,181,869
(15.5%)
$6,856,115 (5.2%)
$15,214,767
& BEAUTY AIDS
largest.
1.0%TOTAL
$174,584,857
5.7%AIDS,
$374,940,606
9.7% $88,616,829
$28,641,621
(0.5%)
1.0% CARE
$174,584,857
5.7%CARE,$374,940,606
E, PERSONAL
CARE
& FIRST &AID,
SKIN
CARE,DEODORANTS,
SOAP
(COSMETICS
& BATH
PREPARATIONS)
BEAUTY
HAIR
PRODUCTS,
ORAL CARE, PERSONAL
& FIRST AID, SKIN
SOAP & BATH
A Healthy Way Of Life
*SPINS Scan 52 weeks ending 2-24-07
The $52.5 MM Naturals Category Is Experiencing
Tremendous Growth Across Product Type
Naturals Skin Care/Hair
Care/Bath&Body Growth
Naturals Skin Care/Hair Care/Bath&Body
Dollar Sales ($MM)
Total US FDMx
82.5%
Hair Care,
$10.1
19%
65.5%
49.9% 51.3%
Skin Care,
$31.3
60%
41.1%
Skin Care
Hair Care
Bath&Body
27.3%
Bath&Body,
$11.2
21%
Dollar Sales
A Healthy Way Of Life
*16oz Equivalents
Volume* Sales
Source: IRI Infoscan – Latest 52 weeks ending 4/22/
All Products Categories Offer Broad
Opportunities for Growth
Skin Lotions Account For One Third Of Naturals Dollars
Naturals Type Growth
Total US FDMx
Naturals by Product Type
Dollar Sales ($MM)
Total US FDMx
228%
Face
Mstrizers,
$4.5
9%
Conditioner,
$4.2
8%
Hand Soap,
$3.9
7%
AO Liq
Soap, $3.3
6%
Shampoo,
$5.7
11%
SknLtns
FcClnsrs
Shmpoo
FcMstrzrs
Cndtnr
HndSp
AOLiqSp
BarSoap
FcAntiAg
Aother
BarSoap,
$3.1
6%
104% 100%
FacAntiAg,
$2.1
4%
Face
Clnsrs, $6.3
12%
AllOther,
$2.4
5%
97%
79%
65%
47%
27%
Skin Ltn,
$17.0
32%
31%
12%
Dollar Sales
All Other includes Bubble Bath, Suntan Lotions/Oils, Acne Treatments, Hair
A Healthy Way Of LifeColoring, Sunscreen Insect Repellant, Hair Sprays, and Hand Sanitizers.
Source: IRI Infoscan – Latest 52 weeks ending 4/22/07

Skin Care Contributes 39% Of The
Growth Dollars To Natural Body
Care In FDM
All but two of the Natural Body Care Categories are growing faster than the overall
department growth of 19%.
 Skin Care, the #2 sales category, is contributing 39% of the growth dollars to the department
Personal
equating
$14.3M
NaturaltoBody
Care
$%
Dollar
Share of
Care/1st Aid
Category
Chg
Chg ($M) Grow th $
Natural Body Care
18.7%
$37.0
Skin Care
33.5%
$14.3
39%
Soap & Bath
30.7%
$5.7
15%
Kits/Sets/Packs
91.1%
$4.2
11%
Deodorants
34.6%
$4.0
11%
Hair Products
41.5%
$3.7
10%
Oral Care
6.9%
$2.9
8%
Personal Care & First Aid
1.7%
$1.1
3%
Aromatherapy & Body Oils
Cosmetics & Beauty Aids
51.1%
29.5%
$1.1
$0.0
3%
0%
Oral Care
8%
3%
Armathpy/Oils
3%
Skin Care
39%
Hair Products
10%
Deodorants
11%
Kits/Sets/Packs
11%
Soap & Bath
15%
FDM - Natural Body Care
Share of Growth Dollars
A Healthy Way Of Life
Source: SPINSscan Conventional / 52 Weeks Ending 8/12/06
The Hain Celestial Group
Personal Care Overview
A Healthy Way Of Life
Why Hain Personal Care?

Largest natural personal care company with 17% market share
covering all categories: Hair, Bath, Body, Baby, Skin and Oral.

Publicly traded on Nasdaq (HAIN)

Supports organizations with like-minded values such as the Breast
Cancer Fund, Susan G Komen, PETA, Organic Trade Association,
Campaign for Safe Cosmetics

ISO 9001 compliant manufacturer with OTC, FDA, Medical device
and Organic licenses and in house Research & Development facility

Practices sustainability:
•
Multiple Hain facilities are powered with renewable energy, including
personal care distribution center and offices
•
Hain Organic farms absorb over 192 million lbs of Carbon Dioxide
annually. This is equivalent to offsetting the carbon emissions of 11,180
households, not using 9.9 million gallons of gasoline, and preserving 714
acres of forest from deforestation
A Healthy Way Of Life
Why Hain Personal Care?
Supports retail partners with category and industry data,
planogramming, POP, in store merchandising and category
management
Leader in innovation and new product development
Portfolio includes brands:
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Ranked
Ranked
Ranked
Ranked
Ranked
Ranked
Ranked
Ranked
Ranked
Ranked
#1 in Natural Personal Care Industry
#1 in Shaving
#1 in Sun Care
#1 and #2 in Body Wash
#1 in Facial Lotions*
#1 in Body Lotions
#2 in Toothpaste with the #1 selling sku
#2, #3, #4 in Skin Care*
#2 in Liquid Soap
#2 and #3 in Shampoo
A Healthy Way Of Life
*SPINS Scan 52 wks Units ending 3-24-07
Brand Portfolio
JASON Natural Products

Trusted, leading natural brand offering a complete range of natural
personal care products including oral, hair, skin, bath, body care.
Appeals to ingredient conscious consumers seeking safe, effective
value priced, vegan natural products.

Top selling items in oral and bath & body care categories.
Alba Botanica

Offers natural skin, bath, body and hair care products that appeal to a
young, fun, energetic demographic seeking personal care products
that provide an experiential exotic escape into nature.

Leading body lotion and skin care line in natural category.
Avalon Organics

Offers a complete range of Organic skin, bath, body and hair care
products that appeal to an environmentally, ingredient conscious,
wellness focused demographic that supports consciousness in
cosmetics.

Leading brand in facial lotions and skin care.
A Healthy Way Of Life
 Naturally derived, minimally processed
Ingredient
Philosophy
 Proven safe and efficacious in cosmetic applications
 Sustainably harvested
 Our products are free of:
• Parabens
• Sodium Lauryl/Laureth Sulfates
• Mineral Oil, Lanolin, Petrolatum
• Animal derived ingredients
• Never tested on animals
• Pthalates
• Known carcinogens and harsh chemicals
 Use non-natural ingredients when effective natural ingredients are not
available
 List ingredients according to the International Nomenclature of Cosmetic
Ingredients (INCI)
A Healthy Way Of Life
Ingredient Philosophy
Seek to create 3rd party certification for natural or adopt European
regulations already in place. Standards must take into account the structure
of personal care formulations and the reality that effective personal care
products may require certain synthetically derived ingredients.
There are 4 types of ingredients in every personal care formulation:
1. Functional Ingredients
o
Provide specific, functional benefits. For example, NaPCA, Panthenol,
Aloe, Cocoa Butter are good moisturizing agents. Decyl Glycoside,
Sodium Cocoyl Glutamate are cleansing agents for Shampoos, Bath
Products.
2. Structural Ingredients
o
Provide the delivery system and a specific product form such as gel,
cream, lotion. These ingredients include Xanthan gum, Glyceryl Stearate.
3. Preservatives
o
o
All water based cosmetic products are prone to microbial contamination
and require preservatives to maintain their safety & effectiveness.
There is no single preservative capable of offering effective protection
against bacteria, molds and yeast. So, a combination of several
preservatives must be used to ensure an effective preservative system.
4. Fragrance/Scent
A Healthy Way Of Life
Product Philosophy
 To create all natural personal care products that reflect our
desire to
experience a healthy, vital life at any age, and
our commitment to building a sustainable, eco-conscious,
green lifestyle.
 To never compromise our integrity, or commitment to our
ingredient
philosophy.
 To practice truth in labeling.
A Healthy Way Of Life
Strategic Vision
 Create products and services that support A Healthy Way
of Life
 Grow our brands organically and through acquisition of
those brands
that meet our strict ingredient and
philosophical requirements
 Expand brand awareness and capture new consumers
through
measured, strategic expansion into additional
channels of distribution
and classes of trade
 Hold the #1 position in all categories we participate in
 Develop and build partnerships with key retailers that
support Hain values and a commitment to the natural category
A Healthy Way Of Life
Wellness Trends In Personal Care
How To Profit From The Health And Beauty Crossover
A Healthy Way Of Life
$49B Natural Products Universe
2005 Total Natural Products Retail = $49.0B (+13.4%)
SPINSscan
Conventional
38%
All Other
40%
Wal-Mart
/ Club
20%
Natural
B/C
32%
Supps
17%
Full Format
<$2M
7%
Other
10%
SPINSscan
Natural
22%
•
Share
Share
Change
ACV
($B)
%
Change
–
•
22%
0.3
$10.7
14.5%
968
SPINSscan Conventional
38%
1.8
18.6
19.1%
64,262
All Other
40%
(2.1)
19.8
7.7%
37,576
$49.1
13.4%
102,806
Total
100%
A Healthy Way Of Life
Natural B/C Size Health Food stores:
Locations
SPINSscan Natural
<$2mm ACV; Supplements >40% but <80% of
store sales
Supplement stores:
–
•
Trader Joe's
15%
(GNC, Vitamin World, independents, etc.);
>80% supp sales
Other:
–
Includes retailer self-classified as co-ops,
specialty/gourmet, personal care (i.e., Body
Shop, Garden Botanica, etc.), health clubs, herb
shops, mall stands, gift shops, etc.
Source: Estimates by SPINS, ACNielsen, Nutrition Business Journal, Natural Foods Merchandiser (including UPC and non-UPC sales) for total U.S. products universe 2005
Health And Wellness Increasingly Involves A
Crossover With Beauty And Personal Care
More Generally
 77% of European and US consumers
overall agreed that “good grooming and
hygiene are just as important as diet,
nutrition and exercise in achieving a sense
of wellness/wellbeing”
 The idea of nutrition for the skin resonates 42% of Datamonitor’s consumer survey
respondents agreed that “skincare products
provide nutrition for the skin in the way that
food and drinks provide nutrition internally”
 The line between medical and cosmetic
application has also become blurred e.g.
oral care
A Healthy Way Of Life
Source: Datamonitor Consumer Survey
Wellness Concerns Are Fuelling The
Growth Of Natural Personal Care
 Double digit growth in both Europe and the US - growing concern
about what they’re taking in internally is leading some consumers to
examine what they’re applying topically and vice versa.
 51% of European and US consumers overall feel that “natural
ingredient based skincare and personal hygiene products are healthier
and better” .
 60% “associate natural products with wellness/wellbeing more than
unnatural equivalents”.
 Also natural is a word consumers feel comfortable in choosing to
describe their looks. Dove’s ‘The Real Truth About Beauty’ research
highlight that, “by an overwhelming majority, women around the world
are most comfortable using the words ‘natural’ (31%) or ‘average’
(29%) to describe their looks” .
“Vice president, marketing and merchandising, L’Occitane en Provence,
Manosque, France, quoted on www.happi.com, January 2006
A Healthy Way Of Life
Source: Datamonitor Consumer Surve
Beauty Products Are Second Most
Common Point Of Entry To Organics
First Category In Which Organic Products Were Purchased
50%
40
40%
30
20
15%
10
0
8%
Produce
Beauty
Products
7%
6%
4%
Dairy Nutritional Homeo- Cereal
Suppl.
pathic
Remedies
A Healthy Way Of Life
4%
4%
Box &
Bagged
Foods
Bakery
Items
2%
Bulk
Food
2%
2%
2%
Beverage Household Meat
Cleaners
2%
Frozen
Foods
Source: SRG Quantitative Research July 2006
Certain Categories Are More
Associated With Wellness
52%
who stated ‘highly relevant’
% of respondents
60%
50%
46%
38%
40%
29%
30%
24%
22%
20%
15%
13%
10%
s
ce
ra
n
Fr
ag
eup
M
ak
ts
O
TC
pr
od
uc
e
ai
rc
ar
H
S
ki
nc
ar
e
ts
or
an
eo
d
D
lh
O
ra
B
at
h
&
sh
ow
er
pr
od
u
yg
ie
ct
ne
s
0%
A Healthy Way Of Life
Source: Datamonitor Consumer Surve
Natural, Organic and Health & Wellness Products*
Are Experiencing 15% Growth
Food / Drug / Mass ($B)
Natural Supermarkets ($B)
$5.6
$16.9
$13.2
$4.9
$14.7
$4.3
+15%
+15%
+12%
2 Year Ago
Year Ago
+12%
Current
2 Year Ago
Year Ago
Current
Source: SPINScan Natural & Conventional 52 Weeks Ending 8/12/06
A Healthy Way Of Life
* Includes UPC coded natural, organic, H&W food, beverage, supplements, body care, and GM. Excludes
Private Label except for supplements.
All Of The Well Developed Natural Body Care Markets
In FDM, Except For San Antonio, Also Have a Strong
BDI For Both Avalon Organics And Alba Botanica
*Strong CDI / BDI for Conventional markets
is defined as an index of 110 or greater
A Healthy Way Of Life
Source: SPINSscan Conventional / 52 Weeks Ending
45 Million Households Buying Organics
•
Research estimates that the percentage of U.S. households using organic
products is about 70% - 73%, up 17% from 2004.
Total US Households Containing
an Adult Female – 64M of 110M
total
Organic Using Households –
45M
A Healthy Way Of Source:
LifeUS Census Data, SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006
Regular Use of Organics
•
30 million (66%) households regularly, or occasionally using organic NPC
HH Using Organic NPC – 30M
A Healthy Way Of Life
Source: SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006
Why Buy Organics?
•
Lack of Chemicals is the key reason to buy across food, household cleaners and
beauty products.
Top Three Reasons To Buy Organic
Food
Household Cleaners
Beauty Products
Lack of Chemicals
65%
Lack of Chemicals
55%
Lack of Chemicals
54%
Product Quality
31%
Environmental
Concerned
41%
No Testing on
Animals
33%
Safer for Children
22%
Safer for Children
30%
Allergy Concerns
25%
A Healthy Way Of Life
The Strong Growth as a Percentage of Sales of Several
Natural Body Care Categories Could Indicate a Possible
Emerging Growth Trend For The Department
Top % Growth Categories – All Departments - FDM
747%
Shelf Stable Meats Poultry & Seafood
91%
Bodycare Kits & Sets & Travel Packs
70%
Gen Merchandise - Personal Care
51%
Aromatherapy & Body Oils
49%
Sports Nutrition
Hair Products
42%
41%
Pet Food & Pet Care
Shelf Stable Fruits & Vegetables
Soup
Shelf Stable Pastas
A Healthy Way Of Life
39%
37%
36%
Source: SPINSscan Conventio
52 Weeks Ending 8/12/06
Creating A Destination

Build trust among guests that Target is committed to LOHAS through
corporate I
nitiatives and supporting brands that reflect this philosophy
 Keys to building this trust:
o Team member, consumer training and education
• Hain can support this initiative with highly educated staff and over
35 skin care specialists & demo reps in our Training & Education
Dept
• Simple, straightforward product education manuals available with
key ingredients and 3 main benefits of each product
• Flash cards by product for quick, easy reference
o Cross promote & merchandise with other natural/organic categories
in the store
o Create events to promote & communicate Target’s commitment to
LOHAS
• Earth Day
• Organic Month, Fair Trade Month
 Differentiated set that effectively communicates natural ingredient
philosophy,
environmental stewardship and sustainability
A Healthy Way Of Life
Summary
 The Hain Celestial Group is a single source for the leading natural
personal brands representing 17% of total natural category sales
 Publicly traded, well funded, with high standards of integrity, process
and quality
 Training & Education support program
 Partnership offers broad options for growth due to the following:
• Natural product availability has not reached full potential within a customer,
and across customers. Encourage distribution in all stores.
•The breadth of products is not fully developed as some accounts are
selective with which items they carry. Selling in the full line, across product
categories, is ideal. If product acceptance is limited, push for Skin Care
products first as they have the broadest consumer appeal.
• A dedicated “destination” for Natural Personal Care products can maximize
potential sales.
• Capitalize on the growing interest and awareness of natural product
benefits.
• Generate excitement in the category through innovative point of purchase
vehicles,
especially
A Healthy
Way
Of Lifein stores with less than ideal shelf placement.
Project Green Space
A Healthy Way Of Life