Hain Celestial sold its Thinsters cookie business to frozen Icee beverage owner J&J Snack Foods for an undisclosed price.
The all-cash transaction, which closed on Monday, allows Hain to streamline its operations to focus on its most important brands and core areas of its business. The organic and natural products manufacturer will use the money to pay down debt.
“We actually felt very good about J&J as the most attractive [among potential buyers] but also the best place for the future of the Thinsters brand,” Wendy Davidson, president and CEO of Hain Celestial, said in an interview. “It was noncore in our better-for-you snacks.”
Thinsters are crispy, thin cookies made from real ingredients, such as butter and sugar, that eschew non-GMO inputs and anything artificial.
Hain acquired Thinsters in 2021 as part of its $259 million deal for That’s How We Roll. The transaction’s crown jewel was ParmCrisps, a maker of high-protein, low-carb cheese crisps and snack mixes. ParmCrisps was added to the company’s snack and beverage portfolio of Celestial Seasonings teas, Sensible Portions Garden Veggie Straws and Greek Gods yogurt.
Davidson said Thinsters was “not material” to Hain’s business. No employees or physical assets were transferred to J&J Snack Foods as part of the transaction.
“Thinsters was definitely not the driver behind the That's How We Roll acquisition,” Davidson noted. “The intention always has been to look for options for the Thinsters brand.”
The That’s How We Roll deal proved challenging for Hain. In early 2023, it wrote down more than half of the ParmCrisps and Thinsters acquisition due to a significant loss of distribution and softening in the keto diet category.
The sale of Thinsters is part of Hain’s multi-year transformation plan to position the business for growth. The strategy is focused on four core pillars, focus, grow, build and fuel, according to Hain.
The Thinsters divestiture contributes to the focus pillar by further refining Hain’s portfolio of better-for-you brands across five growth categories: snacks, baby and kids food, beverages, meal preparation and personal care.
Davidson said further asset sales could be one of the tools Hain uses to strengthen its business. It also will look at a reduction in SKUs, consolidation of operations in some geographies and innovation behind its remaining brands.
Once the darling of the better-for-you food space, Hain has seen competition intensify from deep-pocketed CPG companies. It also has faced headwinds such as COVID-19, inflation and supply chain disruptions. Sales have slumped recently.
During its fiscal second quarter, sales in its North American region were $267.7 million, a 5.2% decrease compared to the prior period a year earlier and a sequential improvement from the 9.8% decrease in the first quarter. Shares in Hain, which were above $17 at this time a year ago, have declined 62% during the past 52 weeks.
“Obviously, we would like to see growth accelerate faster,” Davidson acknowledged. The Thinsters sale, she added, reaffirms “our belief in the Hain Reimagined strategy, staying focused on delivering against those initiatives that we feel like help us move that needle forward, and making the hard decisions as quickly as we possibly can to be able to drive that future.”
For J&J Snack, the company has built an enviable portfolio of brands through acquisitions including Dippin’ Dots, Superpretzel, Luigi’s Real Italian Ice, Minute Maid frozen ices and Sour Patch Kids flavored ice pops.
The company, which traces its origins to 1971 when a failing pretzel company was purchased at a bankruptcy auction for $72,000, has made more than 30 transactions throughout its history. J&J Snack is valued now at $2.7 billion.
Dan Fachner, president and CEO at J&J Snack Foods, said Thinsters complements his company’s existing cookies and baked goods portfolio. The New Jersey firm plans to use its sales, marketing and innovation capabilities to expand distribution and introduce Thinsters to more consumers, he said.
"This acquisition is a natural fit for us,” Fachner said. “Thinsters' dedication to using high-quality, wholesome ingredients resonates perfectly with our growing customer base.”
