Oct. 27--Some executive changes are brewing at Celestial Seasonings.
Peter Burns, Celestial Seasonings' president of the past five years, is stepping down and passing the torch to David Ziegert, a 19-year veteran of the Boulder tea company.
"It's a decision that I made for me and my family," said Burns, who also serves as the chief sales officer of grocery, snacks and personal care for parent company The Hain Celestial Group Inc.
The transition comes as the more than 40-year-old Celestial Seasonings aims to maintain both a leadership position in a crowded herbal tea segment and maintain a healthy brand, which was threatened earlier this year by a research report that company officials call "false and misleading."
Celestial Seasonings also has made moves in recent years to branch out to other aisles of the grocery store and other retailers by launching products such as ready-to-drink teas, energy shots and K-Cups for Keurig single-cup coffee makers. Those expansion efforts likely will continue, Burns said.
"The future's incredibly bright here," Burns said. "If your base business is healthy, if your core business is healthy, it gives you the opportunity to go out and (look to buy other companies). We're active on all fronts."
'Back to prominence'
Burns was a Celestial Seasonings "bounce-back" employee. After serving in various capacities from 1992 to 2000, Burns left and took positions with companies such as Izze Beverage Co., a Boulder-bred sparkling beverage company that later was acquired by Pepsi.
Burns rejoined Celestial Seasonings in 2008 as the company's president.
"When I was here the first time, I knew the brand, I knew the business; I was very familiar with the brand and how iconic it was," he said. "Having the ability to step up and be the person who was guiding the ship here was something that was very difficult to turn down."
When he came back, he felt that the brand had "lost its way a little bit" in that the company's focus on its core business had blurred while attention was placed on expansion, he said.
During Burns' second tenure at the company, Celestial Seasonings undertook an effort to redesign its packaging and redefine its branding. The company also focused on innovating new flavors and products.
"Those are the things that really brought the company back to prominence," Burns said.
Helping grow Celestial Seasonings' share was a collection of new efforts that complemented the established box tea business.
The company averages about two-dozen items at the grocery store, including its boxed teas, ready-to-drink beverages, energy shots and K-Cups. Celestial Seasonings' partnership with Green Mountain Coffee Roasters to develop the cups for Keurig, has allowed the tea company to land its brand in stores such as Bed Bath & Beyond and Kohl's.
Considering where Celestial Seasonings has come in recent years, Ziegert said plenty of opportunities await the firm.
"In the long-term, how else can we leverage the Celestial Seasonings brand?" Ziegert said.
As The Hain Celestial Group continues to broaden its portfolio of branded consumer products, the high-margin herbal tea sales have become a smaller portion of the Lake Success, N.Y.-based company's overall sales, said Sean Naughton, a senior research analyst who covers Hain for Piper Jaffray.
"The growth within (Hain's) tea business, I think, has been decent -- mid-single-digit range -- over the last few years," he said. "Pretty decent growth for a relatively mature category."
Celestial Seasonings is competing effectively against other tea-makers, he said, adding the Boulder firm has been successful in launching new flavors and new products and also in its K-Cup business.
Having a long-time employee in Ziegert serve as Celestial Seasonings' president is a good decision that could help the firm keep with the consistency and its recent success, Naughton said.
Naughton, who does not own shares in Hain, has a buy recommendation on the company.