Kellogg plans to split into three independent companies as part of the latest corporate overhaul in the U.S. to focus on expanding its fast-growing snack business.
The company plans to set up three businesses focused on cereal, snacks and plant-based foods respectively. New names for the spin-offs will be announced later, according to Kellogg, and the spinoffs are expected to be completed by the end of 2023. The board of directors has approved the plans, and headquarters in the U.S. for the three units will remain unchanged. The cereal company and plant-based food company will be located in Battle Creek, MI, while the snacking company will maintain its corporate headquarters in Chicago with offices in Battle Creek.
The company also announced that it’s exploring further strategic moves, including the potential sale of its plant-based business, and looking at adding to its other portfolio of products through acquisition.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value, said Kellogg CEO Steve 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.”
The company’s snacking business will be the largest new company with Kellogg stating it brought in more than $11.4 billion in sales last year. Approximately 60 per cent of sales in the snacking business come from Pop-Tarts, Nutri-Grain, Pringles and Cheez-It.
The cereal business saw sales of $2.4 billion last year, while the plant-based division reported sales of $340 million.
