Hain Celestial sold its Thinsters cookie business to frozen Icee beverage owner J&J Snack Foods for an undisclosed price.
The all-cash transaction, which closed on Monday, helps Hain simplify its portfolio to focus on its larger and faster-growing brands. The organic and natural products manufacturer will use the money to pay down debt.
“Divesting Thinsters further streamlines our supply chain network and strengthens our ability to focus our efforts on driving greater reach and scale of our core better-for-you brands across our categories of focus,” Wendy Davidson, president and CEO of Hain Celestial, said in a statement. “We are pleased to reach this agreement with J&J Snack Foods and are confident that the business will thrive under their leadership.”
Thinsters are crispy, thin cookies made from real ingredients, such as butter and sugar, that eschew non-GMO inputs and anything artificial.
Hain acquired Thinsters in 2021 as part of its $259 million deal for That’s How We Roll. The transaction’s crown jewel was ParmCrisps, a maker of high-protein, low-carb cheese crisps and snack mixes. ParmCrisps was added to the company’s snack and beverage portfolio of Celestial Seasonings teas, Sensible Portions Garden Veggie Straws and Greek Gods yogurt.
The purchase soon proved challenging for Hain. In early 2023, it wrote down more than half of the ParmCrisps and Thinsters acquisition due to a significant loss of distribution and softening in the keto diet category.
The sale of Thinsters is part of Hain’s multi-year transformation plan to position the business for growth. The strategy is focused on four core pillars, focus, grow, build and fuel, according to Hain.
The Thinsters divestiture contributes to the focus pillar by further refining Hain’s portfolio of better-for-you brands across five growth categories: snacks, baby and kids food, beverages, meal preparation and personal care.
Once the darling of the better-for-you food space, Hain has seen competition intensify from deep-pocketed CPG companies. It also has faced headwinds such as COVID-19, inflation and supply chain disruptions. Sales have slumped recently.
During its fiscal second quarter, sales in its North American region were $267.7 million, a 5.2% decrease compared to the prior period a year earlier and a sequential improvement from the 9.8% decrease in the first quarter. Shares in Hain, which were above $17 at this time a year ago, have declined 62% during the past 52 weeks.
For J&J Snack Foods, the company has built an enviable portfolio of brands through acquisitions including Dippin’ Dots, Superpretzel, Luigi’s Real Italian Ice, Minute Maid frozen ices and Sour Patch Kids flavored ice pops.
The company, which traces its origins to 1971 when a failing pretzel company was purchased at a bankruptcy auction for $72,000, has made more than 30 transactions throughout its history. J&J Snack is valued now at $2.7 billion.
Dan Fachner, president and CEO at J&J Snack Foods, said Thinsters complements his company’s existing cookies and baked goods portfolio. The New Jersey firm plans to use its sales, marketing and innovation capabilities to expand distribution and introduce Thinsters to more consumers, he said.
“This acquisition is a natural fit for us,” Fachner said. “Thinsters’ dedication to using high-quality, wholesome ingredients resonates perfectly with our growing customer base.”
