Kellogg to split into 3 to focus on snacks

Kellogg said on Tuesday it was splitting into 3 independent companies by spinning off its North American cereal and plant-based foods businesses, becoming the latest big US firm to break itself up.

Shares of the company, which began life in 1894 when WK Kellogg created Corn Flakes and became known around the world for its breakfast cereals, jumped 7 per cent in pre-market trading.

In recent years, however, the company has focused on building its snacking portfolio, which includes its international cereals and noodles, and North America frozen breakfast business. The division brought in US$11.4 billion in net sales in 2021, accounting for 80 per cent of its total sales.

Kellogg said its other 2 divisions - US, Canadian, and Caribbean cereal and plant-based businesses - collectively represented about 20 per cent of its net sales in 2021.

The company said the names of the 3 companies would be determined later.

The Battle Creek, Michigan-based company said snacks would be the biggest focus among the three. It will be helmed by current Kellogg top boss Steve Cahillane and include brands such as Pringles, Cheez-It, and Pop-Tarts.

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The company’s North American cereal business accounted for about US$2.4 billion of its net sales in 2021 and includes popular American breakfast cereal brands such as Kellogg’s, Frosted Flakes and Froot Loops.

“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” CEO Cahillane said.

In the past two years major US firms such as Johnson & Johnson and General Electric said they were splitting their business. REUTERS