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Kellogg Co. To Split Operations Into Three Separate Businesses

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Battle Creek, Michigan-based Kellogg Company has approved a plan to separate its North American cereal and plant-based foods businesses, via tax-free spin-offs, resulting in three independent public companies.

“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation,” said Steve Cahillane, Kellogg Company’s chairman and CEO.

“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.”

Strategic rationale

To achieve this, it has directed resources and investments toward growth categories and markets around the world, made several acquisitions and partnerships in emerging markets and strengthened its snacks business through acquisitions, divestitures and the freeing up of resources by exiting from direct-store delivery.

The execution of these actions has expanded Kellogg’s portfolio. The outcome of these strategic actions has been improved growth in recent years, with momentum sustained into 2022. After several years of transformation and improving results, the company believes it is the right time to separate these businesses so they may pursue their particular strategic priorities.

The three companies, discussed under temporary names, will be:

Global Snacking Co.

The separations will result in a Global Snacking Co. that is expected to enhance its leadership position in the global snacking, international cereal and noodles, and North America frozen breakfast categories, by focusing investments and capital toward building upon its growth momentum and profitability.

Kellogg Company’s three international regions – Europe, Latin America, and Asia Pacific, Middle East, and Africa – will remain intact within Global Snacking Co.  Steve Cahillane will remain chairman and CEO of Global Snacking Co.

The company said in a statement that, “this business is expected to be a higher-growth company than today’s Kellogg Company, featuring a more growth-oriented portfolio and aided by more focused resources and attention to brand building, innovation and international expansion of world-class brands and to building scale in emerging markets.”

North America Cereal Co.

The company plans to separate North America Cereal Co. as an independent business through a tax-free spin-off. As a standalone company, the company is expecting it 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 proposed management team for North America Cereal Co. will be announced later.

North America Cereal Co.’s portfolio is comprised of brands such as Kellogg’s, Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi and Bear Naked.

Plant Co.

The company intends to separate Plant Co. as an independent business through a tax-free spin-off, while also exploring other alternatives, including a possible sale. 

Anchored by the MorningStar Farms brand, Plant Co. will be a plant-based foods company. This business offers a portfolio of plant-based offerings across multiple product segments. Kellogg has grown MorningStar Farms since its acquisition more than 20 years ago.

The proposed management team for Plant Co. will be announced later.

As an independent business, Plant Co. will have the opportunity to build on its growth and profitability, focusing its resources and investments towards capitalizing on category prospects, by building awareness and penetration in North America and expanding internationally in the future.

Headquarters locations

North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, Michigan. Global Snacking Co. will maintain campuses in Battle Creek and Chicago 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.

The company will provide updates throughout the process leading to the transactions.

For more information about the change, visit unleashingourpotential.com

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