Kellogg’s, the global cereal giant, announced this week that it is spinning off its US, Canadian and Caribbean plant-based and cereal business and creating separate companies. Between them these businesses represented about 20% of the total sales in 2021.
The plant-based business represents only a tiny part of the Kellogg’s portfolio, accounting for $340m (€324m) sales in 2021 with an estimated EBITDA of $50m (€47.6m) in 2021. The company said it is exploring “strategic alternatives” for the businesses including “possible sale”.
The other division for spin off is the North American cereals business which posted sales in 2021 of $2.4bn (€2.28bn)and an estimated EBITDA of $250m (€238m). This division would include the widely recognised Kellogg’s cornflakes brand which dates back to the late 19th century.
The remaining core business is the global snacking company which accounted for the bulk of sales in 2021 – $11.4bn (€10.8bn) with company estimated EBITDA of $2bn (€1.9bn). Kellogg’s international business is divided into three regions, Europe, Latin America and Asia Pacific, Middle East and Africa. The snacking category includes Kellogg’s cereal brands plus snack foods such as Pringles, Cheez-It, Pop-Tarts, and North American frozen breakfast products.
The company expects this slimmed down business with the other businesses hived off to have a positive effect on growth.
By making this move, Kellogg’s is focusing more in the snack side of the business as consumers move away from more traditional breakfast products.