Kellogg Company is splitting its business into three parts—plant-based, cereal, and snacks—to focus on growth in each category.
Food giant Kellogg Company is transforming into three distinct, yet-to-be-named, businesses that focus on plant-based food, cereals, and snacks. The company decided to divide its business into these key segments to focus on bringing innovation and growth into each.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value,” Steve Cahillane, Kellogg Company’s Chairman and CEO, said in a statement. “This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation.”
Moving forward, Kellogg’s will operate these three tax-free spin-offs as independent public companies, each with their own company cultures and strategic priorities, with the goal of maximizing the potential of its plant-based food, cereal, and snacking segments. Dividing the companies in this way allows for them to set their own growth targets relative to their markets and brings more agility to each.
Kellogg’s new plant-based food business
Under the new split, Kellogg’s is tentatively calling its plant-based food business “Plant Co.,” which it values at $340 million currently. This company will be anchored by Kellogg’s MorningStar brand, which it acquired 20 years ago and has been expanding greatly in recent years.
To compete with emerging plant-based meat technologies, Kellogg’s debuted MorningStar’s Incogmeato line in 2019 with “next-gen” plant-based burger patties, chik’n nuggets, and chik’n tenders before expanding with two flavors of soy-based vegan sausages in 2020. Since then, the brand has kept up with trends and innovations in the plant-based space and in 2021 launched vegan chicken tenders that mimic their animal counterpart. Featured on the menu at popular Atlanta-based chain Slutty Vegan, the breaded tenders are made using a proprietary technology that creates a pull-apart texture that is indistinguishable from chicken meat.
Incogmeato also previously partnered with Disney (Mickey-shaped vegan chicken nuggets) and Kellogg’s-owned Eggo (limited-edition vegetarian chicken and waffles box) to create co-branded plant-based meat products.
As an independent company, Plant Co. can focus on capturing more market share of the plant-based category and further expanding its reach across its target areas, which are currently the United States, Canada, and the Caribbean.
The second independent company is tentatively called the “North American Cereal Co.” is currently valued at $2.4 billion and includes brands such as Kellogg’s, Frosted Flakes, Froot Loops, Mini-Wheats, Special K, Raisin Bran, Rice Krispies, Corn Flakes, Kashi, and Bear Naked. The last portion, which Kellogg’s is calling “Global Snacking Co.” for now, is valued at $11.4 billion and includes brands such as Pringles, Cheez-It, Pop-Tarts, Kellogg’s Rice Krispies Treats, Nutri-Grain, and RXBAR.
By Anna Starostinetskaya