06.21.22
Kellogg announced it will split into three independent public companies: a global snacking company with about $11.4 billion in net sales; a North American cereal company with about $2.4 billion in net sales; and a plant-based foods business with about $340 million in net sales.
Kellogg’s Board of Directors approved the plan to separate its North American cereal and plant-based foods businesses via tax-free spin-offs, saying the move will better position each company to “unlock their full standalone potential.”
"Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” said Steve Cahillane, Kellogg Company's chairman and CEO. “This has included re-shaping our portfolio, and today's announcement is the next step in that transformation. 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."
After several years of transformation and improving results, the company said now 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:
The names of the three companies have not yet been determined but will operate under temporary names.
Global Snacking Co
The planned separations will result in a Global Snacking Co. focused on the global snacking, international cereal and noodles, and North America frozen breakfast categories.
Kellogg Company's three international regions—Europe, Latin America, and Asia Pacific, Middle East, and Africa (AMEA)—will remain almost entirely intact within Global Snacking Co. Steve Cahillane will remain chairman and CEO of Global Snacking Co.
Global Snacking Co. had estimated 2021 net sales of $11.4 billion. Nearly 60% of its net sales come from global snacks, with brands like Pringles, Cheez-It, Pop-Tarts, Kellogg's Rice Krispies Treats, Nutri-Grain, and RXBAR, among others.
Less than a quarter of its net sales come from cereal in international markets, featuring brands such as Kellogg's, Frosties / Zucaritas, Special K, Tresor / Krave, Coco-Pops, and Crunchy Nut, among others.
Geographically, North America will represent just under half of net sales, emerging markets about 30% of net sales, and developed international markets more than 20% of net sales.
North America Cereal Co
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 company said.
Focused on ready-to-eat cereal in the U.S., Canada, and Caribbean, North America Cereal Co. had estimated 2021 net sales of $2.4 billion. Its portfolio is comprised of brands like Kellogg's, Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi, and Bear Naked.
Plant Co.
Plant Co. will be the third independent business; it will explore other strategic alternatives, including a possible sale. Anchored by MorningStar Farms brand, Plant Co. will be a pure-play, plant-based foods company. This business offers a full portfolio of plant-based offerings across multiple product segments and eating occasions.
Plant Co. had estimated 2021 net sales of $340 million. The business is currently focused on the U.S., Canada, and Caribbean.
Locations
North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, MI. Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, IL, 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.
Kellogg said it expects the North America Cereal Co. spin-off may precede that of Plant Co., with both currently targeted to be completed by the end of 2023.
Kellogg’s Board of Directors approved the plan to separate its North American cereal and plant-based foods businesses via tax-free spin-offs, saying the move will better position each company to “unlock their full standalone potential.”
"Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” said Steve Cahillane, Kellogg Company's chairman and CEO. “This has included re-shaping our portfolio, and today's announcement is the next step in that transformation. 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."
After several years of transformation and improving results, the company said now 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.
The names of the three companies have not yet been determined but will operate under temporary names.
Global Snacking Co
The planned separations will result in a Global Snacking Co. focused on the global snacking, international cereal and noodles, and North America frozen breakfast categories.
Kellogg Company's three international regions—Europe, Latin America, and Asia Pacific, Middle East, and Africa (AMEA)—will remain almost entirely intact within Global Snacking Co. Steve Cahillane will remain chairman and CEO of Global Snacking Co.
Global Snacking Co. had estimated 2021 net sales of $11.4 billion. Nearly 60% of its net sales come from global snacks, with brands like Pringles, Cheez-It, Pop-Tarts, Kellogg's Rice Krispies Treats, Nutri-Grain, and RXBAR, among others.
Less than a quarter of its net sales come from cereal in international markets, featuring brands such as Kellogg's, Frosties / Zucaritas, Special K, Tresor / Krave, Coco-Pops, and Crunchy Nut, among others.
Geographically, North America will represent just under half of net sales, emerging markets about 30% of net sales, and developed international markets more than 20% of net sales.
North America Cereal Co
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 company said.
Focused on ready-to-eat cereal in the U.S., Canada, and Caribbean, North America Cereal Co. had estimated 2021 net sales of $2.4 billion. Its portfolio is comprised of brands like Kellogg's, Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi, and Bear Naked.
Plant Co.
Plant Co. will be the third independent business; it will explore other strategic alternatives, including a possible sale. Anchored by MorningStar Farms brand, Plant Co. will be a pure-play, plant-based foods company. This business offers a full portfolio of plant-based offerings across multiple product segments and eating occasions.
Plant Co. had estimated 2021 net sales of $340 million. The business is currently focused on the U.S., Canada, and Caribbean.
Locations
North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, MI. Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, IL, 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.
Kellogg said it expects the North America Cereal Co. spin-off may precede that of Plant Co., with both currently targeted to be completed by the end of 2023.
