Filed by Celestial Seasonings, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities and Exchange Act of 1934
Subject Company: Celestial Seasonings, Inc.
Commission File No. 0-22018
Celestial Seasonings, Inc., a Delaware corporation ("Celestial") prepared the
following slide show in connection with a conference
sponsored by Adams Harkness & Hill, Inc. held on March 15, 2000:
1 [Graphic of Celestial Seasonings Logo]
2 Introduction
Statements made during this presentation that are not historical facts,
are forward looking statements, and forward looking statements
necessarily involve risks and uncertainties, including, among others,
seasonality, general economic conditions, consumer trends, inventory
adjustments by retailers, competition, and other risks and
uncertainties including our filings with the Securities and Exchange
Commission.
3 Key Strategies
1. Strategic Segmentation of Tea
- Green
- Wellness
- Organic
- Chai
- Black
2. Extended Strategic Segmentation
- Ready-to-Drink
- Foodservice
- International
4 Key Strategies (continued)
3. Develop one to one marketing relationship
- Catalog
- E-Commerce
4. Play 60 ct. for upside - No Downside
Deliver 25% E.P.S. Trendline Growth
5 Strategic Blueprint
Natural Foods Model -> Segmentation Strategy -> U.S. Grocery, Mass
Drug -> R-T-D Beverage Partnership;
U.S. Food Service; Canada; Europe & Asia
6 Natural Foods
Natural Foods
12 wk 52 wk
Category 16.9% 16.6%
CTEA 19% 19.3%
7 Mass, Drug, Grocery
Mass, Drug, Grocery $
12 wk 52 wk
Category 14% 15%
CTEA 16% 18%
8 Total Specialty Tea - Dollar Share
[Graph depicting shares of specialty tea of Celestial compared to
Bigelow for the period from 2/1/98 through 2/1/00.]
Source: IRI Data 4 wks/Total US - F/D/M
9 Tea - Share Growth
CTEA of obtained #1 share position in 3 key growth segments
CTEA
% of Total CTEA Growth in
Category % Share Segment
Green 19.7% 32.8% 104.0%
Wellness 9.1% 44.7% 84.0%
Organic .4% 44.9% 173.0%
10 Total Green Tea - Dollar Share
[Graph depicting shares of Total Green Tea of Celestial compared to
Lipton for the period from 2/1/98 through 2/1/00.]
11 Total Wellness Teas - Dollar Share
[Graph depicting unit shares of Total Wellness Tea of Celestial
compared to Traditional Medicinal for the period from 2/1/98 through
2/1/00.]
12 The Tea Category is Hot
* Hot Tea Consumption Is On The Rise
- 50% of all adults report tea consumption within
the past year (up from 44% in 1996)
- 25% of tea drinkers report they are drinking tea
more often (up 10 points from 1996)
13 Green Tea News
[Graphic of portions of Articles from the MayoClinic and the Purdue
News]
- Purdue University shows how Green Tea can prevent and slow
cancer growth.
- Tea inhibits an enzyme necessary to the production of tumor cells
- Health experts recommend 4+ cups per day!!!
14 Green Tea
CANCER PREVENTION
* USDA Study 1998
- Antioxidant capacity in Green Tea shown to be better than
22 various fruits and vegetables
* University of Kansas 1997
- Green Tea attributed with 100 times the antioxidant
strength of vitamin C - and 25 times the
strength of Vitamin E - in protecting cell DNA from
free radical damage.
* The Mouth Cancer Study (Chinese Academy of Preventative Medicine)
- Green tea consumption shown to decrease mouth cancer
lesions by 38%
* Mayo Clinic 1999
- Green Tea shown to be a potent killer of prostate cancer cells.
* Purdue University Study 1998
- Identified the mechanism of cancer cell growth inhibition
by Green Tea
* Case Western Reserve University Study 1997
- Epigallocatechin-3-gallate, killed cancer cells in samples
of skin,lymph system and prostate tissue taken from both
humans and mice
15 WEIGHT LOSS
* Green Tea extract
- Administered to human subjects increased 24 hour energy
expenditure by 4%, indicating that Green tea may have a
stimulatory effect upon thermogenesis and fat oxidation.
Study was controlled for caffeine.
ARTHRITIS
* Case Western Reserve University, 1998
- In this study, scientists found that Green Tea polyphenols
delayed the onset and decreased the severity of induced
arthritis in mice.
* Austrian Study, 1998
- In vitro study showed that Green Tea consumption
decreased the severity of symptoms associated with
rheumatoid arthritis.
16 Black Tea
* The Rotterdam Study 1999
- Consumption of Black Tea reduced risk of heart disease by
approximately 40%
* The University of Toronto Study 1999
- Tea consumption significantly decreased incidence of prostate
cancer.
* The Harvard University Study 1999
- Black tea consumption was shown to lower risk of heart
attack by 44%
* The Twinings Study 1997
- Tea flavonoids significantly reduced LDL oxidation for both
Green and Black Tea
17 Antioxidant Value / per Serving
Red Wine 3,000
*Green Tea 2,609
*Peppermint Tea 1,269
*Black Tea 1,112
Orange Juice 720
Broccoli 375
*expressed as micromole trolox equivalents per 240ml
4-6 cups of Green Tea per day provides 25% - 30% RDI for Vitamin C.
Green Tea also contains the following
nutrients: manganese, fluoride, selenium, riboflavin, vitamins A, D,
beta carotene
18 Category Benefit
Tea = Healthiest Beverage
Brand Position
Celestial = Healthiest Tea
Brand Differentiation
Functional Superior Teas
19 [Graphic of packages for Celestial Seasonings Green Teas]
20 [Graphic of packages for Celestial Seasonings Wellness Teas]
21 [Graphic of Packages for Celestial Seasonings Organic Teas]
22 [Graphic of Packages for Celestial Seasonings Mountain Chai Teas]
23 [Graphic of Packages for Celestial Seasonings Functional Black Tea]
24 Kroger Model: Share of Shelf =
Share of Market
Fiscal "Years Ending September 30th
1996 1997 1998 1999 2000E
# of Items 21 23 26 29 33
Unit Growth N/A +20% +22% +17% +22%
Unit Share N/A +35% +36% +40% +45%
As of 11/19/99, total CTEA U.S. average is 21.5 items, and 31.2% share
25 Distribution Opportunity
A. Grocery
AVERAGE ANY ITEM IN
SEGMENT ITEMS ITEM DIST. ACV
Herb Top 15 73.3% 96.3%
Green Top 7 57.8% 81.1%
Wellness Top 5 45.9% 72.0%
Organic Top 3 13.1% 18.3%
Chai Top 3 5.4% 7.2%
------------
*Source: IRI 12 wks. ending 2/20/00
26 Grocery
Grocery Cs.
Grocery Cs. Grocery ACV @100% ACV
Herb 2,367,000 73.3% 3,310,000
Green 690,000 57.8% 1,294,000 2,205,000
Wellness 331,000 45.9% 911,000
Total 3,388,000 5,515,000
+63%
27 Strategic Licensing Partnership
Celestial Arizona
1.5 billion cups per year #1 Premium R-T-D Tea
[Graphic of Celestial [Graphic of Several Containers
Seasonings Red Zinger, of Arizona Teas]
Ginseng Energy & Green
Teas]
28 Five Low Risk Upside Opportunities
1. Functional Black Tea
2. Tea Segmentation Expansion
- Canada
- Foodservice
- Europe and Australia
3. Tea Segmentation R-T-D via Arizona
4. Celestial Direct
- 50K to 500K customers
5. Herbal Supplement Capsules
- 60 ct.
29 Consistent Revenue and Earnings Growth
[Bar Graph]
Revenue:
1996: $73.1
1997: $79.0
1998: $102.2
1999*: 114.9
EPS:
1996: $0.61
1997: $0.68
1998: $0.77
1999*: $0.95
* Before non-recurring items
30 Performance Graph - Celestial Seasonings
[Chart depicts Cumulative Growth % of Celestial at 212%, S&P Foods
Index 26%, S&P Bev. S.D. Index 16% and
Wilshire 5000 Index at 70% charted from 6/97 through 3/10/00]
31 Performance Graph - Hain & Celestial
[Chart depicts Cumulative Growth % of Hain at 470%, Celestial at 212%,
S&P Foods Index at 26%, S&P Bev.
S.D. Index at 16% and Wilshire 5000 Index at 70% charted from 6/97
through 3/10/00]
32 Hain Celestial
* Two of the fastest growing food & beverage companies.
* Creating largest Natural & Organic food company in North America
* Complimentary Strengths
- Hain strength...Natural Foods Channel (60% rev.)
- Celestial strength...Grocery, Mass, Drug Channels
(80% rev.)
* Critical mass to provide one-stop solution to Mass, Drug, Grocery
customers.
* Heinz provides infrastructure for foodservice and international
33 [Graphic of Celestial Seasonings Logo]
Statements made in this Document that state the intentions, beliefs,
expectations or predictions of The Hain Food Group, Celestial Seasonings, Inc.
or their respective managements for the future are forward-looking statements.
It is important to note that actual results could differ materially from those
projected in such forward-looking statements. Information concerning factors
that could cause actual results to differ materially from those in
forward-looking statements is contained from time to time in filings of each of
The Hain Food Group and Celestial Seasonings, Inc. with the U.S. Securities and
Exchange Commission. Copies of these filings may be obtained by contacting The
Hain Food Group or Celestial Seasonings, Inc. as applicable, or the SEC.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO (THE "JOINT PROXY STATEMENT/PROSPECTUS") WHICH
WILL BE PREPARED BY THE HAIN FOOD GROUP AND CELESTIAL SEASONINGS, INC. INVESTORS
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT WILL CONTAIN
INFORMATION IMPORTANT TO INVESTORS. WHEN COMPLETED, THE JOINT PROXY
STATEMENT/PROSPECTUS WILL BE MAILED TO THE SHAREHOLDERS OF EACH COMPANY. COPIES
OF THE JOINT PROXY STATEMENT/PROSPECTUS WILL BE AVAILABLE FOR FREE BY CONTACTING
THE HAIN FOOD GROUP OR CELESTIAL SEASONINGS, INC. OR AT THE SEC'S WEBSITE AT
WWW.SEC.GOV.
###
