Dive Brief:
- Hain Celestial opened its fourth U.S. distribution center in Savannah, Georgia, on Monday, according to Steve Golliher, the company’s chief supply chain officer
- The new facility will double the health food manufacturer’s network capacity, improve transit times by 15% and reduce delivery route miles by roughly 66%, per a Feb. 4 press release.
- "We expect to see significant benefits from this approach, including faster delivery times, increased efficiencies and continued growth and innovation within our supply chain operations,” Golliher said in the release.
Dive Insight:
The opening of the facility completes a multi-year distribution transformation project Hain Celestial began in September 2023.
In addition to the Georgia location, the company now has distribution centers in Perris, California; Allentown, Pennsylvania; and Chicago, with the latter opening this past December.
Hain, which makes Terra chips and Garden Veggie Snacks, among other brands, operates all four facilities in conjunction with a third-party logistics company, per the release.
“So as volumes peak, as we have peak promotional period, we were, in some cases, three or four days from resupply to some of our or key markets,” President and CEO Wendy Davidson said on a Feb. 10 earnings call. “So now having distribution nodes in all the various parts of the country allows us to be a better partner to our customers.”
The new facility will reduce costs in fuel and maintenance, leading to multimillion dollar savings for the company, per the release. However, Davidson said on the call that the exact dollar amount was not yet quantified.
“We established a 400 to 500 basis points around cost reductions, through the Hain Reimagined plan,” Davidson said. “And that's part of what will be included in that sort of overall.”
Announced in September 2023, Hain Reimagined is a multi-year transformation plan meant to improve profitability for the company.
Hain advanced the program by cutting 6% of its SKUs globally since July 2023 while consolidating its manufacturing footprint, according an April 2024 press release.
The recent transformation of its U.S. distribution network “underscores Hain's commitment to operational excellence, and supports the Fuel and Build pillars of its Hain Reimagined business strategy by investing in operational efficiencies to strengthen its supply chain,” the company said in last week’s announcement.
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