China Organic Agriculture Inc. (OTCBB: CNOA) is an aggressive agricultural products trader in China – the company has designed its business plan to allow it to capitalize on China’s growing economy and consumer sector. The company today announced its operating results for the third quarter and nine months ended September 30, 2008, posting triple-digit growth in net sales and net income.

China Organic attributes the increases to expansion of distribution operations and its decision to purchase rice from other rice producers and then selling it to retailers and wholesalers. Net sales for the third-quarter of 2008 were $47.2 million, up 111 percent from the $22.4 million posted for the third quarter of last year. For the nine-month period, net sales were $58.4 million, up 103 percent as compared to $28.8 million for the same nine months of 2007.

The company reported net income of $8.3 million for the third

Healthy internal sales growth, driven by consumer demand for natural food products, and the management’s focus on improving profit margins bode well for Hain Celestial Group Inc.’s (HAIN) outlook.

In addition, the management’s acquisition strategy adds incremental growth to the company’s organic sales growth. Hain Celestial has been successful implementing price increases with the most recent having been realized in June. The Buy rating is maintained.

The company enjoys pricing flexibility with prices having been raised over nine times in the past four years. The price increases help combat the rising costs of both ingredients and fuel. Also, the management is focused on improving profitability through new product introductions, cost cutting programs, another SKU (stock keeping unit) Rationalization Program, and new co-packing arrangements.

Hain Celestial Group is currently selling at 17.7 times trailing 12 month EPS, reflecting the company’s higher-than-average growth profile, given Hain's exposure to the natural food category. Net

Reeds Inc., a brewer/manufacturer and marketer of all-natural beverage, candy and ice cream products, works to offer natural food products primarily to the California market. The company’s primary lines of product feature the herb, ginger, but it also offers lines of carbonated cola, cream soda and root beer. At present, the company is selling its product lines through 10,500 supermarket, gourmet and natural food store outlets.

The company has been finding great success with adding large direct-to-chain outlets. Its most recent addition is the 215 outlets of Ralph’s Supermarkets – a division of Kroger Inc. The company’s product line has been included as an integral part of Ralph’s current advertising campaign, with inclusion in two currently running television ads. It has also been included within Ralph’s Optimum Wellness Program. From a general perspective, Reed’s is positioned to take full advantage of all marketing and promotional opportunities that Ralph’s has to offer.

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