The Apprenticeship of Irwin Simon
Inc takes you inside the life and mind of Irwin Simon. The CEO has built the Hain Celestial Group Inc. into the market leader in natural foods.
Published March 2002
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"My father wasn't a risk taker, and that held him back. Today, taking a risk is something I'm willing to do, and that's probably from seeing what my father didn't do in life."
In 1802 when William Wordsworth wrote, "The Child is father of the Man," how could he not have been thinking of Irwin Simon? In the prime of manhood at 43, Simon runs a company closing in on half a billion dollars in revenues, with a market cap twice that, up from next to nothing eight years ago. Yet there is no question, not even a lingering doubt, that this smooth operator proudly pressing the starter button at Nasdaq on the eighth anniversary of his company's IPO, surrounded by his top managers, the usual anxious PR handlers, and the dozen pleased analysts, and varicose institutional investors who have benefited from his success as surely as they will turn their backs on him should he falter -- no, there is not even the shadow of a lingering doubt that this is the same Irwin Simon stocking bottles of Heinz ketchup at age 10 in his father's 900-square-foot grocery, in Glace Bay, Nova Scotia, 800 miles and a lifetime distant from Simon's Park Avenue digs and his summer place in the Hamptons, a grocery that remains, always and indelibly, a continual reminder of where he comes from and what drives him on.
"Glace Bay? A little fishing village. My father had Simon's Dairy, a grocery with a candy counter. In the back he cut kosher meat. As a family, five kids, we all worked in the store, and my father taught us work ethics, how to treat people and work with people. My father, he was probably not a good businessman, but I've seen him with people who owed him money -- he'd give credit, and if we didn't have milk in the store that evening, he would take money out of the cash register, because they had young kids, so they could go to another store to buy milk. On the other hand, I would look at my father as a businessman, and I'd say, 'Why aren't you doing this, why aren't you expanding, why aren't you ...?' Even at 13, 14 years old. But my father wasn't a risk taker, and that held him back. You know, if anything, today I think taking a risk is always something I'm willing to do, and that's probably from seeing what my father didn't do in life. He was a loved man, but there were times when I was a kid and I made $2,000 in the summer, cutting grass -- in Glace Bay it wasn't a long summer. I would have to help my father out with that couple thousand dollars when he was overdrawn at the bank."
Simon's Hain Celestial Group Inc. is the market leader in the kind of foods made of stuff that only a decade ago most people didn't consider food at all. They're weird bits of once-orphaned vegetation that have been transmogrified into some 29 brands and 1,500 individual products: soy smoothies, organic crackers, natural cereals that surprise you by tasting good -- exquisitely balanced on the other end of the taste scale by a line of fake meat that includes such Star Trek-ian improbabilities as Veggie Breakfast Links, actually not bad; a Veggie Pizza Pepperoni, with all the palatability of Silly Putty; and a pure monstrosity called Veggie Ground Round Italian, a product that manages to simultaneously libel high-end hamburger and an entire European country. More typical is a panoply of teas that could have been conceived only by people who wear Birkenstocks, live in wind-powered log houses, and practice a religion symbolized by a peace sign the size of Mama Cass. But be patient. Simon doesn't just acquire brands -- he revs them up.
Just as the Celestial tea line (acquired in 2000 for $332 million) was goosed to develop new products and expand internationally, that line of meat (and cheese!) analogs -- Yves Veggie Cuisine Inc., acquired last year for $34 million -- will probably undergo an upgrade as well. Hey, Hain Celestial's soy milks and other suspect fluids lead their category because they've broken new ground in flavor and diversity (though from a purely culinary angle, they still retain a bit more oo than moo). That's Simon's thing: taking the products of already profitable companies, improving their taste, extending the line, and then marketing the hell out of them as they begin the long migration from the shelves of the nation's 18,000 health-food stores to its 100,000 grocers and 33,000 supermarkets.
The last is often where non-health-food addicts bump into some of Simon's most popular crossover brands, like Terra Chips, conceivably the world's most successful marriage of tubers and hot oil, and Earth's Best organic baby food, described by one mother as the Rolls-Royce of toddler stuffing -- the latter line acquired from Heinz in 1999 as part of a deal in which Heinz got a 19.5% stake in Hain, the same Heinz whose ketchup little Irwin used to stock in Glace Bay. Both brands share a label common to Hain Celestial products: kosher. Sure, Simon's father was a kosher butcher catering to Glace Bay's handful of Jewish families, but this play is not nostalgic. It's demographic: America's Jews and Muslims are significant customers.
