Popular cereals brand Kellogg splits into 3 independent businesses

Kellogg Company, the maker of popular cereals brands such as Kellogg's, Frosted Flakes, and Froot Loops, has announced the splitting of its business into three independent companies, by spinning off its US, Canadian, and Caribbean cereal and plant-based businesses.

The company said that this trifurcation of the company is aimed at creating a greater strategic, operational, and financial focus for both the company and its stakeholders.

The three companies (temporary names) would be 'Global Snacking Co', 'North America Cereal Co', and 'North America Cereal Co'. Global Snacking Co with about $11.4 billion in net sales, the company said, will operate in global snacking, international cereal and noodles, and North American frozen breakfast.

North America Cereal Co with about $2.4 billion in net sales, will be a cereal company in the US, Canada, and Caribbean markets. And, Plant Co with about $340 million in net sales, will be a plant-based foods company, anchored by the MorningStar Farms brand.

"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 CEO Steve Cahillane said.

In recent years, the company said it has transformed its portfolio into one that has expanded geographically and shifted toward growing businesses, particularly in snacking categories.

"The successful execution of these actions has expanded Kellogg's portfolio, resulting in a scaled global snacking business and significant emerging markets presence, complemented by strong and profitable breakfast and plant-based foods businesses. The outcome of these strategic actions has been improved growth in recent years, with momentum sustained into 2022," it added.

"After several years of transformation and improving results, the company believes it is the right time to separate these businesses so they may pursue their particular strategic priorities," said the company.

According to the Kellogg Company, as independent companies, all three businesses will be better positioned to Focus on their distinct strategic priorities, with financial targets that best fit their own markets and opportunities;

North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, Michigan. Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, Illinois, with their corporate headquarters located in Chicago. Kellogg Company's three international regions' headquarters in Europe, Latin America, and AMEA will remain in their current locations, Kellogg Company said.

Kellogg Company's three international regions – Europe, Latin America, the Asia Pacific, Middle East, and Africa (AMEA) – will remain almost entirely intact within Global Snacking Co. Steve Cahillane will remain chairman and chief executive officer of Global Snacking Co. The proposed management team for North America Cereal Co. and Plant Co. will be announced at a later date.

The company said it intends to separate Plant Co. as an independent business through a tax-free spin-off, while also exploring other strategic alternatives, including a possible sale.