• by Steve Ellwanger , May 16, 2023

Citing a decline in the popularity of the keto diet and retail distribution, Hain Celestial Group has written off more than half of the $259 million it spent to acquire the ParmCrisps and Thinsters snack brands in late 2021.

The $156.6 million write-down was revealed in a Q3 earnings call last week by the company’s new CEO, Wendy Davidson, who just completed her first quarter with the organics and natural products company.

ParmCrisps are high-protein, low-carb cheese crisps and snack mixes while Thinsters are crispy, thin cookies made from non-GMO ingredients.

When Hain announced the acquisition on Dec. 13 of 2021, it did not specifically associate ParmCrisps with the keto diet—which involves replacing carbohydrates with fat.

Asked by JP Morgan analyst Ken Goldman to explain what Hain got wrong when it acquired ParmCrisps and Thinsters parent That’s How We Roll from venture-capital firm Clearlake Capital Group, Davidson said “It’s always tough to Monday morning quarterback and look back on decisions that were made.

“But we have spent a fair amount of time scrutinizing the assumptions that went into the acquisition and what has transpired since. Where we potentially got it wrong… were probably in two ways; one is the reliance on keto as a diet relative to ParmCrisps and the subsequent decline in the keto category.”

The second misstep was expecting distribution to expand as opposed to “a significant loss of distribution.”

In Q3 ended March 31, Hain posted a net loss of $117 million compared to net income of $24.5 million in the prior-year period.