Celestial Seasonings Case Study

Essay by MellifluyUniversity, Master'sA+, April 2004

download word file, 1 pages 2.5

Performance Summary

Celestial Seasonings is performing quite well. Tea sales in the U.S. are over $1 billion per year and it has captured 54% of the market. After its independence from Kraft, it made an IPO that brought in $38 million. Its marketing concept works and sustains loyalty by increasing customer involvement. Celestial Seasonings uses its penetration pricing strategy to have a competitive advantage over Lipton and Bigelow. It lost $3 million in 1993, but bounced back in 1994 with a $6.5 million net income. Its assets have grown to over $53 million while maintaining steady growth. The company has managed to successfully combine its informal culture with professional corporate management. It has received praise for its focus on preserving the environment and being one of the 100 best companies to work for in America. In 2000, it merged with the Hain Food Group to become the Hain Celestial Group.


1.Highly integrated production process

2.Successful marketing plan--goodness, truth, beauty

3.Marketing: focused growth via health consciousness, brand awareness, strong customer loyalty, distinctive packaging

4.Low employee turnover

5.Quick decisions, less paperwork since Kraft

6.Price lower than competitors

7.Recognized as an environmentally-friendly company

8.Large market share

9.Quality control


1.Dependency on one production site

2.$45 debt

3.Little new product development

4.Company might be growing too slowly

5.No presence is fast growing liquid tea segment

6.Difficulty in producing the same flavor from the same herb

7.Shaky history with Kraft