.USA- Eleven months after being spun off from Kellogg Co., WK Kellogg Co. has emerged as a smaller but nimbler company better positioned to leverage its iconic brands and drive growth in the ready-to-eat cereal market, top executives said at the Barclays Global Consumer Staples Conference.
The transaction splitting Kellogg Co. into two public companies — WK Kellogg Co. (the North American cereal business) and Kellanova (the global snacking, international cereal and noodles, plant-based foods and North American frozen food businesses) — was completed on Oct. 2, 2023.
Gary Pilnick, chairman and chief executive officer of WK Kellogg, stated, “The spin logic, we believe works. We’re even more confident today that it was the right decision, and we’re looking forward to the future.
As a stand-alone company, WK Kellogg can now prioritise its cereal business and create its strategy, balance sheet, and organization to execute it.
Pilnick cited focus and agility as the top advantages: “The Kellogg Co. has been at cereal for 118 years, literally, yet our understanding and grasp of this business is so much greater now than it was before.”
A strategic and financial linchpin for WK Kellogg will be its three-year, US$450 to US$500 million supply chain modernization plan.
The initiative includes investment in new infrastructure, equipment, technology, and capabilities at its manufacturing plants in Battle Creek, Mich.; Lancaster, Pa.; and Belleville, Ont., with a goal of boosting production at those sites.
The company also plans to close its plant in Omaha, Neb., in a phased production shutdown beginning in late 2025, with full closure expected near the end of 2026.
Eight months into its first fiscal year, WK Kellogg is “performing largely as we expected,” Pilnick said.
Net income for the first half of 2024, which ended June 29, climbed 21% to US$64 million. The company upheld its previous full-year outlook of adjusted net sales ranging from down 1% to up 1% and adjusted EBITDA growing 3% to 5%.
WK Kellogg is also bolstering its brands, with 9 of its 11 biggest brands growing at or faster than the category.
The company has launched a new campaign for Special K, “Special for a Reason,” to highlight the brand’s variety of nutritional benefits.
Pilnick said, “What gives us a lot of confidence is we have a new marketing model,… which was different than before as a way to really leverage our media and reach consumers.
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