The following video segment is part of a full interview, in which The Motley Fool's Brendan Byrnes sits down with Irwin Simon, the founder and CEO of Hain Celestial (HAIN 1.44%), to take a closer look at the better-for-you food revolution. In this segment, they discuss how the consumer desire for more convenient packaging, while still providing a nutritious item, are shaping future products.
Brendan Byrnes: I wanted to ask you about the battle between the single-serve brewers we have. Obviously Green Mountain Coffee Roasters pretty entrenched with their Keurig machine, Starbucks coming in with their Verismo. Your K-Cup teas have been selling very well. How do you see that battle shaking out and how does that impact Hain Celestial?
Irwin Simon: Well, No. 1 is, listen, our tea business is strong. I think the whole growth in tea and more and more consumers not drinking as much coffee and looking to drink more tea in the afternoon and more soothing. Our herbal teas have really seen growth. Our wellness teas have done well, and we've come out with some other new tea products, whether it's energy shots, like Kombucha, which is a fermented tea with life probiotics and now we just came out with Sleepytime. Sleep apnea is one of the biggest problems with people, consumer and individuals and there are times I have it myself, so we just came out with a Sleepytime shot, Sleepytime Snooze, which is right there. It would help you sleep. So Celestial's done a great job transforming itself from just a teabag into other categories.
Listen, in regards to the K-Cup and for many, many years, we looked at many ways to transform the teabag into other types of materials, other ways you drink tea, no different than they have with coffee. I think the K-Cup is here to stay. I think there are a lot of new renditions of the K-Cup with the patent coming off and what is recyclable, what's not. I even saw they're advertising for a K-Cup the other day where you could open it up, put your own coffee in and you create your own K-Cup and whatever. And that's the same with tea.
Is it a better tasting one? I'm not sure, but listen, what are we all starved for today is time. I'll bring you back to the yogurt category. We have seen Greek yogurt, and you mentioned it before, in this country just take off like a rocket. It tastes better, it's healthier. We have seen studies or talked about studies, and we don't have any science behind it for Greek yogurt, because it's a creamier and less whey, reduces inflammation. Inflammation is a cause of diseases or cancer. Americans ate a lot less yogurt than Europeans because I think the taste. But the big thing is we're seeing is listen, who has time to sit down, and you used to go back, and was it Leave It to Beaver, and TV shows where you sat down for breakfast in the morning...
Brendan: Huge breakfast.
Simon: Huge breakfast...
Brendan: Eggs, toast, everything.
Simon: Had a bowl of cereal, poured your milk in. We are on the go and yogurt is just that snack, but the big thing about yogurt today, we're not just eating yogurt. We're adding fruit, we're adding granola, we're adding flaxseed, we're adding chia seed, and we're adding additions to it, and that's what our breakfast is. My breakfast this morning was -- we just came out with some new Greek kefir, which is a phenomenal product, which actually is a drink.
So the cereal category is going through its challenges, and you see yogurt taking away a lot of that share. No different than if you look at, again, Earth's Best, the pouches replacing the jar and the whole thing is babies that were spoon-fed versus today, here's the pouch. Get the hand-eye coordination, our kids staying on pouches longer today. So packaging and convenience is playing a big, big, big part.
Soup, cans of soup. I say this here and there's times I'm challenged. In five years, you will not see cans out there because of the BPA and the whole freshness part of it, etc. So there's a lot of change going on in the food category in regards to ingredients. There's a lot of change going on in regards to packaging, consumer behavior. We're time-starved. We want to be driving, texting, emailing, and eating at the same time.
I mean a perfect example is what I'm holding in my hand right now is juice. So this is BluePrint, which is a company that we're supposed to acquire very shortly. If you come back and look at a lot of the juices out there today, yes, they are pasteurized, and that is heated for safety to kill everything, but it's killing everything. So you think you're drinking juice and getting all these healthy nutrients from there, I'm getting all this vitamin C, etc. You're not. When they heat it up to 600, 700 degrees, you're killing everything in there, so you're just drinking water with sugar in it or colored water, etc. Where here, it's not pasteurized and it goes through a process, that's a pressurized process where yes, it's killing a lot of anything that could be live in here, but you're getting all the nutrients within here. So there are just so many changes happening within food today, from packaging, from process, that will just take us into a whole other next generation of consumers to enjoy.