Natural products maker Hain Celestial exits Lake Success headquarters

International organic and natural products company Hain Celestial has left its Lake Success headquarters after about 10 years there.

It is unclear how that will affect the company’s multimillion-dollar tax-break deal with the Nassau County Industrial Development Agency that was based on Hain Celestial renovating the Lake Success building it leased and boosting employee hiring, according to an IDA official.

The Hain Celestial Group Inc.’s last day in its 86,100-square-foot headquarters and product development center was Friday, as it seeks a smaller space, the company said in a statement.

“With the shift to hybrid work over the past three years, our current space was too large and we decided to explore a HQ space that is right-sized for our needs,” the company said.

Employees are working remotely or at other Hain sites until a new headquarters is selected, the company said.

Hain declined to disclose the number of employees who were working from the Lake Success building.

Hain was Long Island's fifth-largest publicly traded company in fiscal year 2021, with revenue at $1.97 billion.

But Hain has become smaller over the last few years, as it sold off some brands to focus on more-profitable lines and reduced its workforce.  Also, its profits have declined.

As of June 30, the company had about 3,078 employees worldwide, with approximately 49% located in North America, according to its 2022 annual report.  The employee number has fallen 28% since 2020, when there were 4,287 full-time employees worldwide.

Hain had 250 employees on Long Island before it moved from Melville to Lake Success with help from the Nassau IDA in return for a promise to create 50 jobs. The new jobs were to pay, on average, $131,333 per year.

But, as of the end of 2021, the workforce in Lake Success totaled 239. It was 302 in 2019, according to reports filed by the IDA with its regulator, the state Authorities Budget Office.

Hain has saved more than $1.9 million in property taxes since the IDA board approved the tax-aid package in May 2012. The company also saved $862,500 in sales taxes on the purchase of construction materials, office furnishings and equipment, the reports show.

Hain’s tax deal states that the company must stay in the Lake Success building through 2029.

Move could affect tax breaks

It’s too soon to say how a relocation might affect the company's tax breaks, IDA chairman Richard Kessel told Newsday.

“We very much want Hain Celestial to stay in Nassau County.  We’ve been having discussions with them and, hopefully, we can convince them to stay in the county.  They’re a very important company, known around the world and we want to keep them here,” he said.

In 2012, when the IDA aided Hain, the company was considering a move to Colorado or New Jersey. Then-New Jersey Gov. Chris Christie had wooed then-Hain CEO Irwin Simon, as did then-Nassau County Executive Edward Mangano.

In previous cases in which an IDA client did not fulfill its obligations, the client had to repay the tax breaks that it had received.

For example, Amazon repaid $2.5 million in tax breaks last year after acknowledging that it wouldn’t create the 150 jobs it had promised in return for IDA assistance in opening a warehouse in Syosset to make “last-mile” deliveries to customers’ doorsteps.

Located at 1111 Marcus Ave.,  the building that Hain occupied was once home to the United Nations and is owned by Waterstone Properties Group Inc., a Needham, Massachusetts-based company, which did not respond to Newsday’s request for comment.

The Marcus Avenue building is in what is considered a condominium complex with Northwell Health, which has a large facility attached to the rear of the Hain building, as well as LA Fitness and other entities, and there are different owners for sections, said Brian Lee, a leasing agent for commercial real estate firm Newmark who represents Waterstone.

Hain has been marketing its space to sublease it for more than a year, he said. 

Profits down, marketing to increase

Founded in 1993, Hain sells its products through specialty and natural food distributors, grocery stores, drugstores and other channels in 75 countries across North America, Europe, Asia and the Middle East. 

The company manufactures and sells food products under several brands, including Celestial Seasonings, Earth’s Best, Hartley’s, Health Valley and Terra.  Its personal care brands include Alba Botanica, Avalon Organics and Queen Helene.

In Hain’s fiscal second quarter, which ended Dec. 31, the company’s net sales were $454 million, a 4.8% drop from the $477 million in the same period a year earlier.  Its profit fell from $31 million to $11 million, a 64.5% decline, during the same timeframe.

Hain’s stock price closed at $17.15 Monday.  A year earlier the price was $34.67.

In November, the company announced that Wendy P. Davidson would replace Mark L. Schiller as president and chief executive officer, effective Jan. 1.  Davidson previously had been president of the Americas for Glanbia Performance Nutrition, a division of Irish company Glanbia plc whose products include SlimFast.

Davidson told analysts during a Hain earnings call in February she planned to increase the company’s spending on marketing its brands to help expand its reach in the “better-for-you” food categories.

“In fact, I’ve noticed our brand building spend has historically been far below industry average. … Moving forward, I anticipate committing greater support behind those brands, and eventually spending more in line with our category growth peers with sustained brand building support,” she said.