Three companies are better than one for one of America’s most well-known brands.
Kellogg Company, the breakfast cereal juggernaut, has announced that it will split itself into three separate companies after the Kellogg board of directors approved the plan.
All three new companies will be publicly traded, and Kellogg says the split companies will be “better positioned to unlock their full standalone potential.” Announcing the news, Kellogg CEO Steve Cahillane said, “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.”
The three companies have not been given names yet, but Kellogg has detailed what each company will focus on:
- “Global Snacking Co.”: This is the temporary name given to the company that will make and distribute some of Kellogg’s most iconic snacks and international cereals. Snack brands include Pringles, Cheez-It, Pop-Tarts, Kellogg’s Rice Krispies Treats, and Nutri-Grain. International cereals include Special K, Tresor / Krave, Crunchy Nut, and Coco-Pops. Kellogg says this company will be worth about $11.4 billion in net sales based on 2021 numbers.
- “North America Cereal Co.”: This company will make and distribute some of the top brands people think about when they think of “Kellogg’s.” It will focus on ready-to-eat cereals in the United States, Canada, and the Caribbean. Cereal brands under this company’s banner will include Kellogg’s, Frosted Flakes, Special K, Froot Loops, Mini-Wheats, Raisin Bran, Rice Krispies, Corn Flakes, Kashi, and Bear Naked. It will be worth about $2.4 billion in net sales based on 2021 numbers.
- “Plant Co.”: This final company can be considered the newest one when it comes to brands. That’s because it will make and distribute Kellogg’s plant-based foods. Its main brand will be the MorningStar Farms line of food and will focus on the United States, Canadian, and Caribbean markets. It will be worth about $340 million in net sales based on 2021 numbers.
The “North America Cereal Co.” and “Plant Co.” will remain headquartered in Battle Creek, Michigan, while the “Global Snacking Co.” will be based in Chicago. The spinoff of Kellogg into three distinct companies is expected to be completed by the end of 2023.
Investors seem to have welcomed the news so far. As of the time of this writing, Kellogg stock (ticker: K) is up over 8% in pre-market trading to $73.11 per share.