What’s up with the Kellogg split?
If Kellogg’s splitting into two companies and changing its business model makes no sense to you, join the crowd.
Apparently, Kellogg is not selling enough cereal to keep its stockholders happy: ready-to-eat cereal unit sales declined in both 2021 and 2022 by roughly 8.5% and 3.5%,
To try to fix this, Kellogg has split its North American company into two new companies.
- I. WK Kellogg Co: cereals alone ($2.7 billion in sales in 2022)
- II. Kellanova: snacks and plant-based protein brands ($13 billion). The company expects 50% of its business to come from five brands: Pringles, Cheez-It, Rice Krispies Treats, Pop-Tarts and Eggo. It will also sell Kellogg cereals internationally.
Somebody has to explain to me why this will make a difference.
- More focused attention on cereals?
- Hope that some bigger company will buy one of these?
- Stock splits for investors?
Will this do anything for Kellogg’s customer base? Seems doubtful, but let’s wait and see.