Kellogg to Separate Into Three Companies
Kellogg Co. will be breaking apart into three businesses, covering cereal, snacks and plant-based meat alternatives, following action June 21 by the company board.
The formal names for the spinoffs have yet to be determined. “Global Snacking Co.” will market snacks like Cheez-It and Pringles nationally, and cereal outside of North America. “North America Cereal Co.” will market brands like Corn Flakes and Rice Krispies in the U.S., Canada and the Caribbean. “Plant Co.” will market plant-based proteins, led by the MorningStar brand.
Global Snacking Co., which had sales of about $11.4 billion last year, will be led by Steve Cahillane, current CEO of Kellogg Co. Management for the other two divisions has yet to be determined. North American Cereal Co., which had net sales of $2.4 billion in 2021, and Plant Co., with sales of $340 million, will occupy Kellogg’s current headquarters in Battle Creek, Mich. Plant Co. will be headquartered in Chicago, with a campus in Battle Creek.
A company statement said that Global Snacking Co. “is expected to be a higher-growth company than today’s Kellogg Company,” with more focused resources.
The spinoffs are scheduled to occur by the end of 2023, with North America Cereal Co. going first. In addition, Kellogg will explore selling off the plants division as an alternative to spinning off Plant Co.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included reshaping our portfolio, and today’s announcement is the next step in that transformation,” Cahillane said in a statement. “These businesses all have significant stand-alone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities.”