Kellogg will split into 3 companies: snacks, cereals and plant-based foods

SILVER SPRING, Md. (AP) — Kellogg Co., the maker of Frosted Flakes, Rice Krispies and Eggo, will split into three companies focused on cereals, snacks and plant-based foods.

Kellogg’s, which also owns MorningStar Farms, the plant-based foods maker, said on Tuesday that the spin-off of the yet-to-be-named grain and plant-based foods companies should be complete by the end of next year.

Kellogg’s had net sales of $14.2 billion in 2021, including $11.4 billion generated by its snacks division. Cereals accounted for $2.4 billion in additional sales last year, while plant-based sales totaled around $340 million.

“These companies all have significant stand-alone potential, and increased focus will allow them to better direct their resources to their distinct strategic priorities,” said CEO Steve Cahillane.

Cahillane will become chairman and CEO of the global snacking company. The management team of the grain company will be named later. The board of directors approved the splits.

Shareholders will receive shares in both spin-offs in proportion to their holdings in Kellogg.

Kellogg said he would explore other options for his herbal business, including a possible sale.

The company’s headquarters will move from Battle Creek, Michigan to Chicago, but it will maintain dual headquarters in both cities for its snacks business, which accounts for about 80% of current sales. Kellogg’s three international headquarters in Europe, Latin America and AMEA will remain at their current locations.

Major companies have begun to split at an accelerated pace, including General Electric, IBM and Johnson & Johnson, but such splits are rarer for food producers. The industry’s last major split was in 2012, when Kraft spun off to create Mondelez.

This is a particularly perilous time in the industry due to rising costs, both for labor and materials. Russia’s invasion of Ukraine pushed grain prices higher and this month the United States reported inflation hitting four-decade highs.

Last fall, about 1,400 workers at Kellogg’s grain plants went on strike for nearly three months before winning a new contract with immediate, sweeping wage increases and improved benefits for all workers. In March, a few hundred other workers at a Cheez-Its brand factory won a new contract with 15% wage increases over three years.

Shares of Kellogg Co. jumped 8% to $73.29 before the opening bell on Tuesday.


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