Kellogg company, the cereal giant founded in 1906, has announced that they’ll be splitting into three separate foods companies by the end of 2024.
The Kellogg company, originally named as Battle Creek Toasted Corn Flake Company and usually know as just Kellogg’s, was founded by the superintendent of a sanitarium and his brother. The two were trying to improve the vegetarian diet of the patients, many of whom had bad stomachs from years of poor diet. (The rumor about Dr. Kellogg having invented them as an anti-masturbatory food is only that: a rumor. And apparently only began in 2012.)
By the 1930s, Kellogg’s was a major player in the U.S. food market, with factories all over the country, and they continued to grow. Since 2001, they’ve acquired companies that produce all manner of foods, from Keebler cookies to Gardenburger. By 2012, they were the world’s second largest snack food company (after PepsiCo). In 2021, their net sales were $14.2 billion, very little of that from cereal.
The company has not yet run afoul of anti-trust laws in America, though they potentially could, but their impending split will prevent that for a quite some time to come.
The split will divide Kellogg’s into a cereal company, a snack food company, and a plant-based foods company. In a recent conference call with investors, CEO Steve Cahillane said that separating the businesses will make them more nimble and better able to focus on their own products. All three businesses have significant stand-alone potential, he said. Cahillane will be chairman and CEO of the new snack foods company, which will be larger than the other two put together.
This is a rough time for food companies, with labor and material costs both raising with record-setting inflation. Despite this, the announcement of this news rose shares of Kelloggg company stock almost 2% on Tuesday.
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