You are here
Kellogg becomes latest food company to look at slimming down
[NEW YORK] Kellogg is looking for buyers of its cookies and fruit snacks businesses as the cereal maker seeks to refocus on the fast-growing parts of its business.
The move is part of the company's strategic plan that was announced earlier this year. "Ultimately, we believe these changes will make Kellogg more agile and better focused on growing demand for our foods," chief executive officer Steve Cahillane said in a statement.
Kellogg is hurting from cereal's declining popularity. The sale of cookies and fruit snacks units may let the company devote more resources to turning that area around. The company also wants to appeal to a generation of consumers that's seeking out healthier snack options.
The company is also trying to simplify its corporate structure. It will unify its US morning foods, snacks and frozen foods business into a single unit that generates 80 per cent of revenue in North America. The idea is to react to market trends faster and consolidate areas like manufacturing and logistics.
Kellogg isn't alone in seeking to lighten its portfolio - fellow packaged-food giants are trying to shed lethargic brands in a bid to maximize sales and profit. General Mills Inc. has said it wants to divest about 5 per cent of its portfolio. Campbell Soup also wants to sell parts of its business.
Kellogg shares were unchanged after the close of regular trading. The stock has declined 5.4 per cent this year, compared with a 2 per cent gain for the S&P 500 index.