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The Hain Celestial Group, Inc. (HAIN), Whole Foods Market, Inc. (WFM): Consider This Organic Food Company For Your Portfolio

The Hain Celestial Group, Inc. (NASDAQ:HAIN) operates in a growing market driven by consumer trends toward healthier living.

The following chart illustrates Hain’s tremendous growth:

HAIN Revenue TTM Chart

HAIN Revenue TTM data by YCharts

The Hain Celestial Group, Inc. (NASDAQ:HAIN) recently reported results that were better than Street estimates in the fourth-quarter as well. With an aging and health-conscious population being driven toward the concept of organic & natural food for healthier living, Hain’s sales have been pretty strong.

Organic food market growth

On the whole, the food retail market is slated to grow at an estimated CAGR of 5.5% globally for the period of 2011-2016, as compared to 5.7% for 2007-2011. The market is estimated to be worth approximately $7 trillion by the end of 2016.

The Hain Celestial Group, Inc. (NASDAQ:HAIN)The Rest of the World (ROW), which includes Latin America, Australia and other regions, is expected to grow at a CAGR of 16.5 %. Rising health concerns will be the main driver for growth in the organic food industry globally. The Americas will account for more than 50% of the market.

Acquisitions driving growth

The Hain Celestial Group, Inc. (NASDAQ:HAIN) has been on a buying binge as it looks to make the most out of the opportunities in the organic food space. Last year it acquired Premier Foods to expand in the United Kingdom; this positioned the company among the top 40 food and beverage suppliers in the U.K.

In December last year, The Hain Celestial Group, Inc. (NASDAQ:HAIN) acquired the BluePrint Juice brand. BluePrint products generated sales of approximately $20 million in 2012, and Hain Celestial will look to build upon the rapid growth of the brand’s BluePrint Juice line, which is sold at a number of national, natural and gourmet retailers, including Whole Foods Market, Inc. (NASDAQ:WFM). Hain Celestial is Whole Foods’ biggest supplier .

In May this year, The Hain Celestial Group, Inc. (NASDAQ:HAIN) purchased Ella’s Kitchen Group, a maker of organic baby food with 80 products offered in the United Kingdom, the United States, and Scandinavia. Ella’s posted sales of $70 million in 2012. Now that it’s in control, Hain Celestial looks to increase Ella’s sales to $200 million within a couple of years. Hain Celestial’s acquisitions are known to perform well, and this acquisition is expected to be accretive from 2014 onward.

These expansions are a positive

Organic food and beverages have gained so much popularity across the globe over the past few years that they can now be considered mainstream. Supermarkets such as Wal-Mart Stores, Inc. (NYSE:WMT) carry an ever-increasing range of organic food product lines.

Wal-Mart Stores, Inc. (NYSE:WMT) also increased its focus on the introduction of private label organic products at lower prices, in order to increase their accessibility for consumers. This means that organic food, drinks and personal care products also form a channel of growth for a retail chain like Wal-Mart.

In addition, Wal-Mart Stores, Inc. (NYSE:WMT)’s South African unit, Massmart, plans to take a majority stake in Kenya-based supermarket chain Naivas. This will give Wal-Mart a strong foothold in the fast-growing east African economy. Currently, Naivas operates 28 stores, and plans to add two more by the end of the year.

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