Okay, we're going to go ahead and get started. Good morning. Still morning. Good morning, everybody. Thanks for joining us. I'm the Sell-side Equity Research Analyst at William Blair that covers Hain Celestial. We are thrilled to have the company's Chief Executive Officer, Wendy Davidson, with us today to present. We also have Chief Financial Officer, Lee Boyce, and Vice President of Investor Relations, Alexis Tessier, in the audience. So thanks, everybody, for joining. Hain is a leading, better-for-you food and beverage company. I think many of you are probably familiar with a number of the company's principal brands, including Celestial Seasonings Tea, Garden Veggie, Terra, and Garden of Eatin' Snacks, and Earth's Best and Ella's Kitchen baby and kids foods.
The brands are sold in almost all major classes of retail trade, both brick and mortar and online, and they have a business here in the U.S., but also extends to the U.K. and Europe. It's a very interesting time at the company. They've recently introduced a major transformation strategy called Hain Reimagined, which we're going to hear more about today. I think it puts the business on footing for sustainable, profitable growth over the next several years. Before handing it over to Wendy, a couple of quick housekeeping items. Immediately following the presentation, we're going to stay in this room, and we're going to do the breakout right here because it's the last presentation of the day in this room. We welcome you to stay with us for that.
I want to just mention that a complete list of research disclosures or potential conflicts of interest can be found on the William Blair website. With that, I'll turn it over to Wendy.
Great. Thank you, John.
Thank you, John, for having us. Good morning to everyone. I'm really delighted to be here. I know the whole team is as well, so that we can provide an update on the company and in particular our Hain Reimagined strategy. Before I get started, please make note of the safe harbor statement. We will be making some forward-looking statements and will refer to certain non-GAAP financial measures. Please keep this in mind throughout the presentation, and you can see the reconciliation in the slide deck, which can be found on our website. Hain is a global leader in better-for-you across food, beverage, and personal care, and our purpose is inspiring healthier living for better-for-you brands. We operate in five better-for-you categories: snacks, baby and kids, beverages, meal prep, and personal care.
We hold a strong position in five developed markets that have a high penetration of better-for-you, in particular the U.S., Canada, the U.K., Ireland, and Western Europe. Our brands hold leadership positions in their respective categories with an opportunity for us to expand, reach, and gain our fair share. Most importantly, we have an experienced, globally integrated team that is passionate about our mission. That mission is to build purpose-driven brands that make healthier living more attainable by empowering our people, engaging our partners, and living our values. I'll give you a little bit of background for those maybe not familiar with Hain. Over the course of our 30-year history, Hain grew through acquisition of better-for-you brands. Historically, the company was run largely as a holding company with businesses and brands that operated independently.
This led to considerable complexity and prevented our company from leveraging our capability and our ability to scale. Before I joined last year, Hain had made significant headway in cleaning up the portfolio and divesting of non-core, subscale brands, yet the company was still not fully integrated. In fact, we had a portfolio of incredible better-for-you brands, but we weren't really leveraging them to their full potential, market share in the marketplace or in our reach. With the announcement of Hain Reimagined on our investor day in September, we laid out a multi-year strategy to transform our business into a global, integrated, scalable enterprise. So let me give you a little bit of background on Hain and why we believe in the future potential of our business. Our focus on better-for-you is a very strong point of differentiation for Hain.
It provides us a deep understanding of the better-for-you consumer, their evolving needs around healthier living. While many of our peers in consumer goods have natural and organic offerings in their portfolio, our business portfolio is focused almost exclusively on better-for-you. This unique competitive advantage gives us credibility with our customers and a deep understanding of the consumer. And in fact, growth in better-for-you products has historically outpaced food and beverage. While this long-term trend saw some brief reversal, a reversal in recent years as the consumer behavior shifted largely because of inflation and changing consumer demands related to the pandemic, consumer demand for better-for-you has returned to outpacing growth versus conventional. And in fact, research shows that better-for-you is more relevant than ever, especially in our core markets.
It influences purchasing decisions for 91% of shoppers in the U.S. and 75% of shoppers in the U.K. as consumers are increasingly gravitating towards healthier choices. At Hain, we are well positioned to capitalize on these better-for-you tailwinds with leading brands across our five categories, many of which hold number one or number two brand positions in their categories. At Hain, our reimagined strategy blends the best of large CPG with the agility of a disruptor or a challenger brand to enable the growth of our brands. On the one hand, we play in large attractive categories with a focus on delivering unique value to the consumer, but we'll also leverage broad distribution and partnerships with strategic customers to expand the reach and penetration of our brands.
Then combine the benefits of process discipline and a test-and-learn playbook from smaller companies from those category disruptors to be able to build our brand awareness and drive breakthrough innovation in our categories. And finally, we will attract top talent through building a performance-based culture that combines the best of traditional CPG with an entrepreneurial startup mindset. In short, we call it outbigging the small and outsmalling the big. So what is Hain Reimagined? Hain Reimagined is this bold multi-year strategy, but more importantly, how will we get this accomplished? And I believe it starts with the team that we have at the top. Since I joined the company, we've reinforced and refreshed our executive team, with 50% of my team being new to the company in the last 18 months. And we brought in new leaders one level below them.
Over 30% of the leadership team below the executive team are also new to the organization in the last 18 months. In assembling that team, it was important for me to bring together talent that had both large CPG experience, particularly in driving global synergies and scale, as well as people who had an owner's mindset or experience in working in smaller disruptor brands so we can move agile, move fast, and be nimble. Our leadership team has extensive experience and proven success in key areas for us: business turnaround, global integration, multi-market brand building, omnichannel expansion, and leading through transformation. I am incredibly confident that this is the team that has the ability and the drive to achieve the aspirations and ambitions that we've set forth in Hain Reimagined. So where are we at? We're in year one of a multi-year bold transformation.
Our priorities in this foundational year have been focusing our business, resetting our global operating model and culture, launching a holistic fuel program, and investing in some critical capabilities to enable our growth. In fiscal 2025 and 2026, as the fuel program delivers more savings to the P&L, we expect to see the investments that we make in brand building, channel expansion, and innovation to more meaningfully contribute to our top line and expansion of our margins. By fiscal 2027, we will then realize the full benefits of our reimagined supply chain and our end-to-end process improvements, and importantly, our go-to-market commercial execution. What is Hain Reimagined? It's grounded really in four strategic pillars. I'm going to take you through a little bit and unpack the details of those.
Specifically, starting with focus, we are aggressively designing a winning portfolio and simplifying our operating footprint to reduce complexity and drive margin expansion. We've organized the business in five core categories and five core geographies, and we've defined clear roles for each of the brands within. Our grow brands, which will receive disproportionate investments, should deliver better than category growth and share gains. This includes our snacks brands, where we have strong brand awareness and unique consumer propositions in brands such as Garden Veggie and Terra Chips. With our leading baby and kids brands, with Earth's Best in North America and Ella's Kitchen in the U.K., and with Celestial Seasonings, the leader in herbal tea and a beverage category. Our maintained brands are an important part of the portfolio, and they deliver critical value unlock in our P&L, but they don't require disproportionate reinvestments to enable their growth.
This would include brands like Cully & Sully, Yorkshire Provender, and New Covent Garden soup brands, which are the number one, number two, and number three soup brands in the U.K., as well as Natumi and Joya, our non-dairy beverage brands in Europe. In fact, non-dairy beverage is a great example of the progress from the end-to-end rigor that we've applied to our stabilized brands, from supply chain to portfolio optimization, brand building, innovation, and channel expansion. The holistic effort that we put against non-dairy beverage has allowed us to shift that category business from stabilize and into maintain. And we are well positioned in both branded and own label in that market to deliver profitable growth. Lastly, are the businesses that we have ring-fenced under stabilize. These are businesses that have been underperforming, and we're working to stabilize them to then provide optionality.
Once those businesses are stabilized, we would then determine where and if they fit within the Hain portfolio. We have made significant progress under the focus pillar in this first year. We removed underperforming SKUs representing approximately 6% of the products in our global portfolio year to date, including the sale of our Thinsters brand announced in April, the streamlining of our plant-based meat-free portfolio in meal prep, and additional refinements in both baby and kids and beverages as a part of ongoing brand maintenance. The largest reduction that we've had is in our personal care portfolio, where we're removing underperforming SKUs and subcategories representing approximately 62% of the products in the category or 30% of net sales. This will enable us to focus on driving stronger velocities within the core assortment, reduce unnecessary complexity, and expand our margins.
In addition, we've streamlined our global operating footprint in order to leverage our synergies across the business and drive scale across the five geographies. These markets are attractive with higher better-for-you penetration and strong potential for us to gain share with our brands. We consolidated our plant-based meat-free production in Canada earlier in the year and recently announced the consolidation of our personal care manufacturing footprint, reducing our number of Hain facilities from two to one in personal care and eliminating 60% of the co-manufacturers within the personal care network. We also announced that we ceased operations on the ground within our non-strategic joint venture in India, and we will be servicing the EMEA market via a distribution model, which is much more cost-effective. These focus initiatives will drive both increased capacity utilization and lower our overall operating costs.
We also made some strong progress in our global operating model, transforming the company from a holding company into a truly integrated enterprise. As I mentioned earlier, we've historically operated as a collection of siloed entities without really common systems, common processes, or leveraging our global capabilities. Over the course of the year, we've created the foundational building blocks that will result in a more productive and resilient growth-driven company. We've established functional centers of excellence across the organization, including end-to-end supply chain, R&D, and quality, IT, HR, and finance. This will allow us to drive synergies and leverage scale, and we're beginning to see those results. One example is in our supply chain center of excellence, where we've been working end-to-end. It's resulted in improved reliability and service levels.
In fact, in the third quarter, Hain's in-stock rates were over 94%, an increase of 130 basis points from the second quarter and 400 basis points better than our peer set. This is a significant improvement of the Hain of the past, and it positions us better to partner with our customers to expand distribution and ensure reliable supply so that we can build brand awareness and household penetration of our core assortment. Our next pillar is build. We're investing in a set of critical capabilities to drive sustainable growth, particularly around brand building, channel expansion, and innovation. We've enhanced our brand building capabilities to drive increased mental and physical availability of our brands and following an always-on approach. We call it making our brands first to mind, first to find.
We're determined to get better before we get bigger, however, with a focus on improving the productivity of our marketing spend before simply increasing the amount of dollars that we spend in marketing. We're prioritizing and distorting our marketing resources to our growth brands in snacks, baby and kids, and beverages. And we've implemented a new marketing playbook we call Agile and Amped, through which we deliver fully integrated omnichannel campaigns that are deeply rooted in consumer insights. In North America this summer, we're excited about the recent launch of our Savor Your Summer program in snacks. This is the first-ever national multi-branded merchandising program within Hain. We have 13,000 shippers, multi-brand that will be going out into the marketplace. And for retail partners, they're incredibly excited to see the first-ever better-for-you snacking assortment offered during the key snacking promotional time period.
We believe the enhancements that we've made to our brand building capability will drive volume in the short term, but more importantly, long-term brand health. One thing that we've noticed, we have beloved brands, but in many cases, our historic channel concentration has made them incredibly hard for you to find. We've enhanced our focus on channel expansion to drive greater reach and to diversify our mix. Two of our channels with outsized opportunity for expansion are in away-from-home or food service and convenience small format and e-commerce, both of which are margin accretive. We've established dedicated teams with industry expertise to drive growth in these important channels, and we're beginning to see that momentum build. While our starting point was relatively small, our away-from-home revenues have grown 13% in North America and 8% internationally year to date. Importantly, also is our innovation pillar.
We've enhanced our innovation capabilities globally to more effectively address the evolving needs of consumers. As a leader in better-for-you, we need to be the one innovating in the categories to drive new category and new brand news. We're focusing our innovation in our core growth category, snacks, baby and kids, and beverages. We've prioritized a focus on bigger and better ideas. We're leveraging key insights from our global platforms across our geographies so that we're driving and developing breakthrough scalable innovation that will improve how we support and improving how we will support them both at launch and post-launch. The recent launch of Garden Veggie Flavor Burst is a prime example. It was created from consumer research, highlighting a gap in the snacking segment.
Flavor Burst fills a better-for-you tortilla chip void by combining craveable flavors like nacho cheese and zesty ranch with wholesome ingredients like non-GMO corn and colorful veggies with no artificial flavors and no artificial preservatives. In fact, Flavor Burst is off to an incredibly strong start. It is the number one new product launch in better-for-you snacks in the industry year to date in 2024 and is still ramping up. We're excited about our pipeline for fiscal 2025 and the upcoming opening of our innovation experience center in our new global headquarters in Hoboken, New Jersey. Our next category pillar is grow, where we expect outsized contribution from our snacks, baby and kids, and beverage categories. Year to date, 85% of our business has grown over 3% in line with our Hain Reimagined algorithm, driven largely by our grow brands.
Offsetting this growth, however, has been the declines in the remaining 15% of the business, where we are aggressively working to soften the impact from those stabilized businesses. But we believe in the underlying growth of better-for-you across our categories. While better-for-you penetration is growing, there continues to be significant headroom across our most important categories. And when coupled with growing consumer interest in healthier alternatives to fuel their day-to-day, we believe Hain will continue to experience tailwinds in better-for-you. Furthermore, the core shopper demand in better-for-you continues to be very attractive. Consumers make more trips and spend nearly twice as much than the average buyer in better-for-you. While we expect to continue to see tailwinds from our leadership in better-for-you, we don't want our growth to be predicated on a participation strategy. And we expect our growth plan to drive share gain in our key platforms.
We expect that growth to be led by snacks with significant gains from driving velocity, expanding into away from home, and launching breakthrough innovation and effective media campaigns. In baby and kids, we will deliver growth through innovation in our two leading brands with a focus on toddler snacks and expanding our relevance from birth to backpack beyond baby and toddlers to grow with our consumers as they get older. Within beverages, we expect to grow tea through distribution expansion and innovation to deliver enhanced consumer benefits, such as in sleep and in wellness. While we expect to generate the bulk of our growth in these three categories, we are still focused on stabilizing the performance in the areas that have been under pressure, more recently, especially personal care, plant-based, meat-free, and in our infant formula within the Earth's Best brand.
Our final pillar, and the one where we probably made the greatest amount of progress this year, is in fuel, which is enabling us to fund our growth plan and drive margin expansion. The fuel program consists of three main levers: revenue growth management, working capital improvement, and operational efficiency. We've implemented more disciplined revenue growth management, optimized price pack architecture, mix, and trade promotions. We see material opportunity in the near term to improve our cash conversion cycle and our inventory position to release cash to our balance sheet. We've identified significant opportunities to drive efficiency across our end-to-end supply chain to unlock savings across our cost structure. We expect overall these improvements to enable 400-500 basis points of adjusted gross margin expansion by fiscal 2027 and to contribute over $165 million in working capital improvement.
In this first year, we've made significant progress in unlocking cost savings. Our revenue growth management initiatives across both regions have delivered 70 basis points of trade spend efficiency year to date and driven better net price realization and overall promotional effectiveness. We've leveraged new digital technology and improved processes to reduce our inventory levels by nearly 10% year to date and extended our days payable outstanding by nine days. We're driving end-to-end operational efficiency through sourcing and productivity initiatives and putting us on track to deliver over $60 million in productivity in this fiscal year alone. These efforts have combined to enable us to drive strong cash flow and reduce net debt while offsetting inflation and investing in the capabilities I outlined earlier to enable us to pivot to growth.
We've reduced year-to-date net debt by $47 million since June of 2023, and we're making progress towards our fiscal 2027 leverage goal of 2x-3x . The execution of our Hain Reimagined plan will deliver compelling and achievable financial results along with the attractive shareholder returns. The plan represents a material transformation for Hain, inflecting both top-line growth and expanding our margins. Our long-term financial algorithm is founded on at least a 3% organic net sales rate, and we will continue to pace our investments relative to the savings from our fuel program. We will be closely monitoring the return on those investments to determine the appropriate pacing and throttle forward and back as the P&L enables us to do so. We expect to deliver overall low double-digit EBITDA CAGR and achieve low double-digit EBITDA margins by fiscal 2027.
In summary, Hain Reimagined is a bold transformation of Hain overall and a bold transformation of our business, how we go to market, our cost structure, our organizational model, our operation, our culture, and our ways of working. It really is a holistic reimagining of Hain Celestial. And we are fundamentally a very different company than we were a year ago. We're a stronger company. Our capabilities are more robust. The team is working together more effectively as a global enterprise. We have a strong portfolio of brands with key positions in attractive categories with significant share gain potential, and we have a clear financial algorithm to deliver sustained shareholder returns. We've made material progress in focus and fuel, which has driven gross margin expansion, strong operating cash flow, and enabled us to reduce net debt.
85% of our business is in growth, and we have plans in place to aggressively stabilize the balance. Importantly, we have an experienced, globally integrated team that is aligned to the mission and committed to the strategy and to execution. We remain confident in our ability to achieve the full potential outlined in Hain Reimagined. I'm excited to chat with you today. I want to thank you for the time. Lee and I look forward to having additional time to answer your questions during the breakout.