Cereal, snacks, and organic foods will be handled by different units.
Kellogg, one of the largest providers of packaged foods in the United States and the world, has maintained a generally consolidated control of all of its owned brands for the entirety of its 100+ year operation. Today, however, the company announced a bit of a change-up in their operating procedure.
Kellogg CEO Steve Cahillane announced today that the company would be dividing into three sub-units, each a company in their own right, with each taking command of a particular branch of Kellogg’s food offerings. The first unit will be in charge of Kellogg’s iconic cereal brands, including Corn Flakes and Special K. The second unit will be in charge of snack offerings like Pringles and Cheez-Its. The third and final unit will be in charge of all of Kellogg’s organic offerings, such as Kashi and Incogmeato.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value, said Cahillane in a statement. “These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities.”
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On the heels of this announcement, Kellogg’s stock rose by 8% in value. Kellogg has turned high profits in the last couple of years on pre-packaged snacks like Nutri-Grain bars, Pop Tarts, and Pringles. Analysts expect the snack-focused unit to be the most profitable of the three sub-companies, and allowing it to go off on its own could allow it to strive for greater growth without worrying about resources being devoted to other products.