BATTLE CREEK, MI — The Kellogg board of directors approved a plan to separate its North American cereal and plant-based food businesses via tax-free spin offs to form three public independent companies.
The three companies, whose permanent names are yet to be decided, are broken down into Global Snacking Co., North America Cereal Co., and Plant Co.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation,” said Steve Cahillane, Kellogg Company’s chairman and CEO.
The three independent companies will be positioned to focus on distinct strategic priorities with market- and opportunity-focused financial targets, execution opportunity with greater focus allocation of capital and resources, obtain improved profitable growth outlooks, and develop cultures built from Kellogg’s company values.
Global Snacking Co. will focus on global snacking, international cereal and noodles, and North America frozen breakfast. With about $11.4 billion in net sales, it will include major brands such as Cheez-It, Pop-Tarts, Kellogg’s Rice Krispies Treats and Nutri-Grain, with strong growth momentum and profitability.
The North America Cereal Co. will concentrate on ready-to-eat cereal in the US, Canada and Caribbean. In addition to its brand portfolio — which features Mini-Wheats, Rice Krispies, Kashi and more — and investment and profit growth opportunities, this company has net sales of about $2.4 billion.
Anchored by the MorningStar Farms Brand, Plant Co. has about $340 million in net sales and is set to be a leading plant-based foods company. This company is set to capitalize on the opportunity for long-term category prospect in North America and future expansion on an international level.
The headquarters for North America Cereal Co. and Plant Co. will remain in Battle Creek, MI, and Global Snacking Co. will hold two campuses: one in Battle Creek, MI, and its corporate headquarters in Chicago.
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” Cahillane said. “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.”
Additional information on the new companies and strategy can be found on Kellogg’s website.