Kellogg set to split into 3 companies
By Abimbola Mohammed
As part of greater strategic, operational, and financial focus, Kellogg has announced that it will separate into three different companies to create for each of the new firms that will be named at a later date. Kellogg is splitting into a cereal maker, a snack maker and a plant-based food company.
Kellogg said it will separate its North American cereal and plant-based foods business which represents an estimated 20% of Kellogg net sales in 2021 from its global snacking brands, cereal and noodle brands and frozen breakfast brands.
Announcing the company’s plan, Steve Cahillane, Kellogg’s Company’s Chairman and Chief Executive Officer, in a statement, said: “Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation.
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth.”
According to Kellogg: “After several years of transformation and improving results, the company believes it is the right time to separate these businesses so they may pursue their particular strategic priorities.”
“The plant-based company, which earned $340 million in revenue in 2021, will be anchored by the Morning Star Farms brand, which features an array of plant-based items such as chicken nuggets and sausage links.
The Cereal Company and plant-based company will both remain headquartered in Battle Creek, Michigan. The global snacking company will maintain dual campuses in Battle Creek and Chicago, Illinois, with its corporate headquarters located in Chicago.”
The global snacking company, which earned $11.4 billion in revenue last year, will be made up of well-known brands such as Pringles, Cheez-It, Pop-Tarts, and Kellogg’s Rice Krispies Treats. Sales at the snacking company last year also came from some cereal brands as well as frozen breakfast brands and the Eggo brand, the company added.
Kellogg expects these moves to be completed by 2023 and the headquarters for the three companies set to focus on their global snacking brands, their cereal brands and their plant-based food brands will remain unchanged.
After the announcement, Kellogg rose more than 6% in pre-market trading on Tuesday.
The cereal company accounted for $2.4 billion in sales last year through business in the U.S., Canada, and Caribbean, Kellogg said. The cereal company sells brands such as Frosted Flakes, Froot Loops, Mini-Wheats, and Special K.
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