US food giant the Kellogg Company (Kellogg’s) has announced plans to split its activities into two distinct businesses for snacking and cereal, each to be given a new company name, Food Dive reported.
The new company names – Kellanova and WK Kellogg Co – would signal a ‘disruptive’ fresh start, Kellogg’s CEO Steve Cahillane was quoted as saying in the 15 March report.
Scheduled for later this year, the re-organisation of the company – the maker of Kellogg’s cornflakes, Rice Krispies, Pringles and other well-known food brands – brought it a step closer to splitting the 117-year old business, Food Dive wrote.
The new company names reflected both the history of the company and the future for the businesses that would be left to operate independently in a competitive food environment and with changing consumer habits, Cahillane told Food Dive.
The snacking and plant-based company spin-off will be called Kellanova, adopting the Latin word “nova”, meaning new, while the North American cereal business will be known as WK Kellogg Co, named after the company’s original founder, according to the report.
“We wanted to create something that was disruptive in a way, that when people looked at it, they could see Kellogg because of the iconic ‘K’ in the beginning, but then ask the question, ‘What is that, what’s new?’” Cahillane was quoted as saying about the new company name Kellanova. “It’s the next generation of the company.”
The logos for the two companies also held specific meaning, with Kellanova, which will be used for household brands such as Pringles, featuring the signature Kellogg ‘K’, followed by a more modern typeface, while the WK Kellogg Co logo resembled the corn flake maker’s traditional branding, the report said.
Despite the change, products from both companies would still display the Kellogg’s name, due to consumers’ familiarity with the brand, Cahillane said.
The Michigan-based food manufacturer has increasingly seen value in its snacking business, which makes up around 80% of its total sales, the report said.
In announcing the split last summer, Kellogg’s said the move would drive growth for both companies. This was likely to include the acquisition of new brands, Cahillane added.
“When the split occurs, both companies will have strong balance sheets,” Cahillane said. “Part of the strategy will definitely be organic growth, continuing at pace, but also looking for opportunities from a mergers and acquisitions standpoint.”
Kellogg’s expected two distinct corporate cultures to emerge, with decisions at Kellanova driven by the fact that it was an international snacks business, Cahillane said.