Baking&Snack International - April 2012 - 1

April 2012

Vol. 1, No. 4

In this issue

2 4 6 8 12 13

Editorial Kellogg Snacks Snacks in China Whole Grains Sugar Reduction New Products

Pringles expands Kellogg’s global snack presence
By Ildiko Szalai

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ith the acquisition of the Pringles snack business, The Kellogg Company, Battle Creek, Michigan, US, became the world’s second largest savory snack producer. Kellogg is acquiring Cincinnati, Ohio, USbased Procter & Gamble’s only food brand, Pringles, for US$2.7 billion. This follows Procter & Gamble’s decision to terminate the sale of the brand to Diamond Foods, San Francisco, California, US, in the wake of an ongoing accounting scandal and executive change at the US snack food maker. Procter & Gamble claimed significant interest in Pringles from a number of suitors. Indeed, many multinational food companies are currently refocusing their strategies, and even restructuring their organizations, to build a strong portfolio of snack products. Most notably, Kraft Foods, Northfield, Illinois, US, is creating a global snacks company in the wake of its 2010 acquisition of Cadbury. Although Pringles would have fit seamlessly into Kraft’s global snacks portfolio, an acquisition/integration of this scale may have come too soon for a company only just being created.

Kellogg's acquisition of Pringles should help the company capitalize on the dynamic growth expected in the sweet and savory snack market in Asia Pacific.
The Kellogg Company

A surprise buyer for Pringles
Kellogg can be considered a surprise buyer of Pringles’ global snack assets given its minor

presence in the sweet and savory snacks category. Kellogg’s overall sweet and savory snacks business generated retail value sales of just US$58 million in 2010, compared with the company’s global packaged food sales of US$16.4 billion. Furthermore, Kellogg’s recent acquisition activity has followed a pattern of expansion either into categories with strong health credentials or emerging markets. For example, 2008 saw the acquisition of Australia’s Specialty Cereals, owner of a range of breakfast cereals positioned in the healthier foods arena. Kellogg served to benefit from the high profit margins of health-and-wellness-minded packaged food items in mature markets. Continued on Page 4 www.bsimagazine.com

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Baking&Snack International - April 2012

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