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Latest headlinesManufacturing NewsPeople & Industry News

Company News

Kellogg Company announces separation of two businesses as bold next steps in portfolio transformation

The Company plans to separate into three independent companies

Kellogg logo

Source: The Kellogg Company

June 21, 2022

The Kellogg Company announced that its Board of Directors has approved a plan to separate its North American cereal and plant-based foods businesses, via tax-free spin-offs, resulting in three independent public companies, each better positioned to unlock their full standalone potential. According to Kellogg, the three companies, whose names will be determined later, would be the following:

  • “Global Snacking Company,” with about $11.4 billion in net sales, will be a major company in global snacking, international cereal and noodles—and North America frozen breakfast, with iconic, brands and strong underlying growth momentum and profitability;
  • “North America Cereal Company,” with about $2.4 billion in net sales, will be a major cereal company in the U.S., Canada, and Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth
  • “Plant Company,” with about $340 million in net sales, will be a profitable, pure-play plant-based foods company, anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion.

“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,” says Steve Cahillane, Kellogg Company’s chairman and chief executive officer. “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.”

Why break up the businesses?

In recent years, the Kellogg Company has transformed its portfolio into one that has expanded geographically and shifted toward growing businesses, particularly in snacking categories. To achieve this, it has directed resources and investments toward growth categories and markets around the world, made several acquisitions and partnerships in emerging markets and strengthened its snacks business through acquisitions, divestitures and the freeing up of resources by exiting from direct-store delivery. The successful execution of these actions has expanded Kellogg’s portfolio, resulting in a scaled global snacking business and significant emerging markets presence, complemented by strong and profitable breakfast and plant-based foods businesses. The outcome of these strategic actions has been improved growth in recent years, with momentum sustained into 2022.

After several years of transformation and improving results, Kellogg believes it is the right time to separate these businesses so they may pursue their particular strategic priorities.

According to Kellogg, as independent companies, all three businesses will be better positioned to:

  • Focus on their distinct strategic priorities, with financial targets that best fit their own markets and opportunities;
  • Execute with increased agility and operational flexibility, enabling more focused allocation of capital and resources in a manner consistent with those strategic priorities;
  • Realize improved outlooks for profitable growth; and
  • Shape distinctive corporate cultures, rooted in Kellogg Company’s strong values and rewarding career paths for employees of each company.

Global Snacking Company  

The planned separations will result in a Global Snacking Company that is expected to enhance its leadership position in the global snacking, international cereal and noodles and North America frozen breakfast categories by focusing investments and capital toward building upon its strong growth momentum and profitability.

Kellogg Company’s three international regions—Europe, Latin America, and Asia Pacific, Middle East, and Africa (“AMEA”)—will remain almost entirely intact within the Global Snacking Company. Steve Cahillane will remain chairman and chief executive officer of Global Snacking Company.

North America Cereal Company

Kellogg plans to separate its North America Cereal Company as an independent business through a tax-free spin-off. North America Cereal Company is a major player in cereal in the U.S., Canada, and Caribbean, with well-known brands, a heritage of innovation, and more than a century of operational success. As a standalone company, North America Cereal Co. will have greater strategic focus and operational flexibility, and will direct capital and resources toward unlocking growth, regaining category share, and restoring and expanding profit margins.

The proposed management team for North America Cereal Company will be announced at a later date.

Plant Company

The Kellogg Company intends to separate Plant Company as an independent business through a tax-free spin-off, while also exploring other strategic alternatives, including a possible sale.

Anchored by the well-known MorningStar Farms brand, Plant Company will be a profitable, pure-play, plant-based foods company. This business offers a full portfolio of plant-based offerings across multiple product segments and eating occasions. Kellogg has grown MorningStar Farms steadily since its acquisition over 20 years ago, and the brand now has the highest share and household penetration in the frozen vegetarian/vegan category, according to Kellogg.

The proposed management team for Plant Company will be announced at a later date.

Headquarters locations

North America Cereal Company and Plant Company will both remain headquartered in Battle Creek, Michigan. Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, Illinois, with its corporate headquarters located in Chicago. Kellogg Company’s three international regions’ headquarters in Europe, Latin America, and AMEA will remain in their current locations.

For more information, visit www.kelloggs.com

KEYWORDS: company operations Kellogg's marketing plant-based

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