Kellogg will split into three to focus on snacks

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(Reuters) – Kellogg on Tuesday announced it was splitting into three separate businesses, separating its North American cereal and plant-based foods businesses.

Kellogg, born in 1894 when WK Kellogg created Corn Flakes and became known worldwide for its grain products, was earning 7% in forecourt trading.

However, the group has focused in recent years on developing its snacks offering, which includes its international cereal and noodle businesses, as well as its frozen breakfast business in North America. This division reported 11.4 billion dollars (10.80 billion euros) in net sales in 2021, or 80% of its total revenue.

Its other two units — grains and plant products in the United States, Canada and the Caribbean — collectively accounted for about 20% of its net sales in 2021, Kellogg said.

The names of the three companies created after the split will be determined later, the group said.

Kellogg also said snacks would be its top priority among the three. This new entity will be led by current Kellogg CEO Steve Cahillane and will include brands such as Pringles, Cheez-It and Pop-Tarts.

The company’s cereal business in North America generated approximately $2.4 billion in net sales in 2021 and includes popular breakfast cereal brands such as Kellogg’s, Frosted Flakes and Froot Loops.

“These companies all have significant stand-alone potential, and a stronger consolidation will allow them to better direct their resources to their distinct strategic priorities,” said Steve Cahillane.

(Reporting Deborah Sophia in Bangalore; French version Dagmarah Mackos, editing by Kate Entringer)

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