Milling & Baking News Corporate Profiles - 2019 - 88

COMPANY OVERVIEW

Kellogg Co.
Focus shifts to brand building following sale of cookie business
t has been several years since Battle Creek,
Mich.-based Kellogg Co. made the decision
to exit its direct-store delivery model. In
doing so, the company shifted its strategy to
investing in retailer margin and brand building.
The change has worked.
Today, Kellogg has a snacking portfolio that
Steven A. Cahillane, chairman, president and
chief executive officer, describes as "very much
revitalized."
In late July, Kellogg sold its cookie, fruit and
fruit-flavored snack, ice cream cone and pie crust
businesses to the Ferrero Group for $1.3 billion.
The transaction included Keebler, Famous Amos,
Mother's and Murray cookies, as well as Little
Brownie Bakers, supplier of cookies to the Girl
Scouts of the U.S.A. Other brands in the transaction included Stretch Island and Fruit Snacks fruitflavored snacks and Keebler's ice cream cones and
pie crust products. Ferrero also acquired six food
manufacturing facilities from Kellogg Co. located
in Allyn, Wash.; Augusta, Ga.; Florence and Louisville, Ky.; and Chicago, as well as a leased manufacturing facility in Baltimore.
With the sale behind it, Kellogg can now
direct attention to its five power brands -
Cheez-It, Rice Krispies Treats, Pop-Tarts, RXBAR
and Pringles - which account for 75% of the

company's sales. Mr. Cahillane said Kellogg is
making aggressive investments in brand building to position the brands for further growth.
In December, the company will debut PopTarts Pretzel, which features a salted pretzel
crust and cinnamon sugar or chocolate filling.
The flavor twist marks a new direction for the
Pop-Tarts brand, said Ami O'Keefe, senior commercial strategy manager for convenience at Kellogg.
"We do limited-time offerings and seasonal
flavors and new flavors all the time, but to do
something as unique as this ... and take that
brand into a new daypart or occasion is really
exciting," Ms. O'Keefe said.
Pop-Tarts Pretzel was among several new
snacks previewed at the National Association of
Convenience Stores' 2019 NACS Show, held Oct.
1-4 in Atlanta. The company also is introducing
Rice Krispies Treats Dunk'd bars, featuring marshmallow treats dipped in a chocolate or cookies and creme coating. New Rice Krispies Snap

Crackle Poppers varieties, which are coated, bitesize squares, include caramel and vanilla creme,
joining chocolate and cookies and creme flavors.
Much of Kellogg's innovation is driven by insights on consumption occasions, Ms. O'Keefe
said. Recent launches add new textures and novel flavors to the company's decades-old brands.
"With brands like Pop-Tarts and Rice Krispies Treats, you've got people who have been
loving and consuming those brands for years,"
she said. "They really do span multiple generations. We actually think about it more in terms
of eating occasions. That's really what drives a
lot of our innovation. Obviously trends and consumer preferences, but looking at our portfolio
and where it's best meeting the needs of our
consumers and where there's opportunity for us
to better meet the needs of our consumers is
what drives a lot of the R.&D. work and the
innovation that we put forward."
Kellogg is extending its MorningStar Farms
portfolio with the introduction of Incogmeato
by MorningStar Farms. The new product line
includes the company's first ready-to-cook
plant-based burger to be sold in the refrigerated meat case and frozen, fully prepared plantbased Chik'n tenders and nuggets.
"Our testing indicates we have a consumer

Chief executive officer -
Steven A. Cahillane

Kellogg Co. net income

Kellogg Co. net sales

Kellogg Co. share price

per share
$70

$699

2016

88 \ November 2019

$1,254

2017

$1,336

2018

in millions

$65
$60

$12,965

$12,854

$13,547
$55

2016

2017

2018

$50
Oct.
2018

Dec.

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Milling & Baking News Corporate Profiles - 2019

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