US food giant the Kellogg Company (Kellogg’s) has announced plans to split into three independent companies in a bid to streamline the company and focus on its snack business.
As part of the move by the maker of Kellogg’s cornflakes, Rice Krispies, Pringles and other well-known food brands, Kellogg’s will separate its North American cereal and plant-based food businesses, resulting in three companies, the company said in the 21 June statement.
The restructuring of the company would result in the creation of a global snack business, with estimated net sales of about US$11.4bn, that would also include international breakfast cereal and noodles brands and its North American frozen breakfast division, Kellogg’s said.
Although the names of the three companies had not been confirmed, Kellogg’s said they had been given the temporary names of Global Snacking Co, North America Cereal Co and Plant Co.
North America Cereal Co, with estimated net sales of about US$2.4bn, would be a cereal company in the USA, Canada and the Caribbean, while Plant Co, with about US$340M in net sales, would be a plant-based food company, based around the MorningStar Farms brand.
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” Kellogg Company chairman and CEO Steve Cahillane said.
Kellogg’s said it expected the new snack food company to be a higher growth business than the current company “featuring a more growth-orientated portfolio and aided by more focused resources and attention to brand building… and international expansion of world-class brands, and to building scale in emerging markets.”
The formation of the North America Cereal Co and Plant Co was due for completion by the end of next year, the company said, although the former could take place first.
Kellogg’s said North America Cereal Co and Plant Co would both retain their headquarters in Battle Creek, Michigan, while Global Snacking Co would keep its dual headquarters in Battle Creek and Chicago, Illinois.
The company’s three international headquarters in Asia, Middle East and Africa (AMEA), Europe and Latin America, will remain in their current locations, according to the statement.
