Hain Celestial’s products are likely in your pantry or on your shopping list. The New York-based company, founded in 1993, owns dozens of popular brands of healthy food, from Terra chips to Earth’s Best baby food to Celestial Seasonings teas.
The company has had three phases, explains Jeff George, Senior Vice President of Corporate R&D.
Hain 1.0 was a holding company of health and wellness brands built up by founder Irwin Simon. Hain 2.0 was a transformation into an operating company with stronger core capabilities, led by CEO Mark Schiller, who took over in 2018. That phase also involved significiant streamlining — selling off about 1,000 products that generated nearly $1 billion in revenue.
Hain 3.0 involves investing to build more global brands, an increased focus on plant-based nutrition, and “sustainable, profitable growth,” in George’s words. The company, which employs about 3,000 people, posts annual revenue of $2 billion.
Under George’s watch, Hain’s R&D team has developed and launched a raft of natural-ingredient products that includes Celestial Seasonings K-Cups, Greek Gods Low Sugar Keto-friendly Yogurt, and Jason Men’s Hair Care.
George oversees product, process, and packaging development, quality assurance, food safety, and regulatory. The company’s reconfiguration has enabled him to assemble his own R&D unit and promote quick, startup-like decision making.
Before joining Hain in 2019, George was a vice president of R&D at Campbell’s Soup, and senior vice president of R&D for Hillshire Brands.
How large is your R&D unit, and how many workers are there?
Hain Celestial is around a $2 billion company with about half its sales in Europe and half in North America. So, for Hain North America, we have a lean R&D team. We have about 25 to 30 folks in R&D, and then 40 to 50 in our headquarters-based quality, regulatory, and food safety group. So collectively, the entire department is around 70 or 80 folks.
How old is the R&D unit?
Hain as a company in the food business is relatively young; we’ve been around 25 years. It grew primarily for the first 20 years through acquisitions. So what generally happened is R&D departments came to the company via acquisitions. A small company would have a couple folks in R&D, and they’d get acquired and become part Hain R&D. But Hain R&D as a total function operated very independently and in a siloed way. Those folks who came with the acquisitions kind of stayed working on their businesses — really until our transformation, which was about three years ago. We took all of those groups together into one North American organization. So, this team … has really only been together as a team for a couple years. We’re really in the early phases of creating a function.
Everyone who works in research and development at our company only has two people between them and the CEO.
How are you structured?
The nice thing about setting up this function as a total function for the first time … when we set it up, rather than create this big bureaucratic highly layered organization, we kept it very lean and very flat. In fact, everyone who works in research and development at our company only has two people between them and the CEO. What it does is enable us to get very fast decision making. You don’t have the pre-meeting for the pre-meeting. We can get decisions made quickly.
In R&D, we need to be very focused, [making] fast decisions focused on growing margins, and on delivering targeted, profitable innovation. We designed our group that way. I think it mimics more what a lean startup company would do, versus perhaps a larger, more established company.
We have a great set of outside partners which we work with. With third parties, they bring in great expertise and give us some flexibility to do what we want. So, a lean, scrappy group, highly networked, and leveraging open innovation is how we’re structured.
In R&D, we need to be very focused, [making] fast decisions focused on growing margins, and focused on delivering targeted profitable innovation. So, we didn’t need bureaucratic structure.
What factors into bringing in one of those partners you mentioned?
I’ll give you a great example. We have a third-party partner called Pack Edge.
Their expertise is in is packaging, packaging design, and packaging research and development. When I joined Hain, we didn’t have that function at all. That’s a very important function because it helps deliver differentiated structural packages, it helps ensure product safety, it drives a potential for cost savings. …. So, to build a function like that internally takes a very long time. …You have to build the talent, nurture the talent. You have to build all the systems and infrastructure. … [With an outside partner,] it’s almost like “Dial-an-Expert.” Bring them in, deliver tremendous results in a short period of time, and if that particular project ends, they can move off and we can move off and leverage other expertise.
What does the CEO expect from R&D, and is that expectation evolving?
I think our executive leadership team is around eight folks. I’m on that team, so R&D, quality, food safety, and regulatory does have a seat at the CEO table. It’s not true at all companies, but it is true at Hain. There were a couple folks on the team that were legacy, meaning they were also in the older version of Hain. But there are many, many new faces. When you’re taking a company through a dramatic change, there’s a lot of leadership change as well.
But it’s been good. I think it helped move the company more quickly through the change curve. It’s really helped deliver the results we’re proud of. … We just announced that we’ve completed this phase of stabilizing the company, restoring the bottom line, and stabilizing the top line. Now we want to get back to growth. We’re calling it Hain 3.0. The acquisition was 1.0; the turnaround was 2.0; and now 3.0 is delivering sustainable, profitable growth. We have the leadership and, I believe, the R&D in place to be able to do that.
How does the R&D department measure its progress?
The way we measure R&D progress, contribution to growth, and the effect of this department is really three-fold: our contribution to innovation, cost savings, productivity, and culture and employee engagement.
When it comes to innovation, we measure it a few ways, but the headline is R&D plays a huge role in innovation, along with our marketing partners and sales partners as well. We all measure ourselves together. We have one set of metrics on innovation. We have innovation targets every year on the amount of innovation we launch. But more importantly is the sustainability of that innovation. So, we are moving more toward the industry standard metric of measuring the percent of sales from innovation over the last three years. [This is called the Vitality Index.] And what that is going to do is ensure not just that we are launching items, but those items are staying in market, and selling well and growing over time.
So we have targeted numbers of the amount of products we launch each year and the amount of total sales that come from innovation. For cost savings, we have annual productivity targets. R&D plays a huge role in redesigning the ingredients, the products, and the packaging so that they deliver against cost savings, which ultimately improve our profitability. But it also helps us deliver value to consumers. … We want to keep our products affordable to more people. So we’re doing everything we can to drive efficiency, so we can keep the price down and the value good for consumers.
You can’t just pay people and have them come. You really have to mesh and match with people’s values and beliefs.
How are the hiring conditions for your R&D team at the moment?
It’s been 35-plus years for me, and the hiring environment and retention environment is as challenging as I’ve ever seen it in my entire career. … Now people care much more about the company, the ethics of the company, and how committed you are to the environment and sustainability and how committed you are to growing people’s careers and people’s lives.
… You can’t just pay people and have them come. You really have to mesh and match with people’s values and beliefs. I think it’s a good thing, because if people do that kind of research and choose your company, you can feel better that there’s alignment.
What advice do you give junior R&D people?
I’ll give you two things. A lot of folks are very anxious to kind of move onto the next thing. But I always say, build a foundation first in R&D. I manage folks now and spend a lot of time in meetings and deleting emails. But I spent many years as an engineer — a process engineer in packaging and doing product development. I’ve got that technical foundation, so it helps me ask the right questions. It helps me help teams; helps me help others in making good decisions. … For any scientist or any engineer coming into R&D, I would say, don’t try to rush past building that solid foundation from which you can grow.
The second piece of advice I give folks is when I’m asked, “Hey, there’s this new job. Do you think I should take it?” … My first question is always, “Where are you going?” … Because if you don’t know where you’re going in your career, any path will take you there, which is a well-known statement. …If you know where you’re going, you don’t need to ask [if you should take the job], because it will be very clear whether or not it’s the right move.