Kellogg Split Into 3 Separate Companies

In case you visit the supermarket and find your favourite cereal; Kellogg, under a different company, calm down there is no cause for alarm. Kellogg has announced that it will separate into three different companies to create “greater strategic, operational, and financial focus” for each of the new firms that will be named at a later date.

The company announced on Tuesday that it would separate its North American grain and plant-based food businesses into three independent public companies. The three companies being separated through the tax-free spin-off include “Global Snacking Company,” and “North America Cereal Company.” And the names of the companies “Plant Company” will be decided later.

According to Fox News, the Global Snacking Company will be a “leader in global snacking, international cereals and noodles, and frozen breakfasts in North America” ​​with projected 2021 net sales of $11.4 billion. About 60% of its total sales come from global snacks, less than a quarter from cereals in international markets, about 10% from noodles in Africa, and less than 10% from frozen snacks and Ago brands.

Kellogg said the business will expand profit margins and is expected to be a company with higher growth than the current company, which is still led by CEO Steve Cahillane.

“Kellogg’s has been on a successful journey of transformation to drive performance and long-term shareholder value. This includes reshaping our portfolio, and today’s announcement is the next step in that transformation,” Steve Cahillane said in a statement.

“All of these businesses have significant standalone potential, and an increased focus will enable them to better direct their resources toward their specific strategic priorities. In turn, each business is expected to create greater value for all stakeholders. and each is well-located to create a new era of innovation and development.”

The North America Cereal Company reported sales of $2.4 billion last year and is focused on ready-to-eat cereals in the US, Canada and the Caribbean. It will focus on recovery of inventory, profit margins and share position after 2021 supply disruptions.

Kellogg’s said it will generate steady net sales over time and includes brands such as Kellogg’s, Frosted Flakes, Fruit Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi and Bear Naked.

Plant Company reported sales of $340 million in 2021, and Kellogg said it would explore strategic options with the company, including potential sales. The independent business is expected to accelerate net sales growth over time and is anchored by the Moringstar Farms brand.

Both the North America Grain Company and Plant Company will be 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.

Kellogg said he believes this is the right time to segment businesses to pursue particular strategic priorities.

Independently, it said the three companies would be in a better position to execute with “increased agility and operational flexibility,” “realizing better approaches to profitable growth” and “shaping distinctive corporate cultures.”