A pair of high-profile acquisitions this week may mean further consolidation for the natural products industry. Yesterday Hain Celestial Group announced it would buy Avalon Natural Products and, in a separate deal, Van's International Foods was purchased by a privately held investment group headed by a natural foods veteran.
Avalon, which manufactures organic and natural personal care products, including those under the Avalon Organics, Alba and Un-Petroleum names, sold for $120 million. The previous owner was Greenwich, Conn.-based private equity firm North Castle Partners LLC, which was recently in the news for its sale of Naked Juice Co. to PepsiCo. Avalon has been at the forefront of industry debate about what constitutes organic personal care.
Melville, N.Y.-based Hain, long known for its natural food brands, including Arrowhead Mills, Imagine, Walnut Acres and Garden of Eatin', began its buying spree of personal care products in June 2004 when it acquired Jason Natural Products. Less than a year later, in April 2005, the natural products giant bought premium skincare brand Zia. Then, in March 2006, Hain acquired Queen Helene, an industry pioneer, through its purchase of Hempstead, N.Y.-based Para Laboratories.
Earlier this year, Hain's president of personal care spoke with The Natural Foods Merchandiser. "We didn't buy [Jason and Zia] to be No. 2," Andrew Jacobson said. "Product innovation is extremely important to our success. We're putting a tremendous amount of R&D into [personal care]."
This latest move by Hain fits its strategy perfectly, said Chief Executive Irwin Simon. "The acquisition of the Avalon Organics and Alba Botanica brands will strengthen Hain Celestial as one of the leading natural and organic personal care products companies in a category that is experiencing double-digit growth," Irwin said, in a release.
Similarly, Healthy Foods Holdings' purchase of Van's is a step forward in its long-term strategy, said Chuck Marcy, CEO of the Boulder, Colo.-based equity firm. "We are extremely excited to add the Van's brand to our portfolio, which will give us a strong foothold in the natural and organic foods business," he said in a statement. Marcy was formerly the CEO of Horizon Organic.
Van's International produces Van's Waffles, the leading brand of all-natural and organic frozen waffles. The line includes gluten- and wheat-free varieties, as well as waffles with flax, oats and other whole grains. The company also makes soy-based meat alternative products, such as Chick'n Free Nuggets, Gourmet Bites, Vegetarian Breast and Vegetarian Fillet.
Healthy Food Holdings' current portfolio also includes YoCrunch Yogurts, and it has issued a letter of intent to buy CoolBrands Dairy, which manufactures Breyers yogurt products. Healthy Food Holdings is in turn part of the portfolio of Greenwich, Conn.-based Catterton Partners.