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Tag: Kellogg

  • WK Kellogg reports sharp drop in Q2 earnings amid Ferrero takeover

    WK Kellogg reports sharp drop in Q2 earnings amid Ferrero takeover

    The major breakfast cereal and snack producer, WK Kellogg, has revealed a significant drop in its net income for the second quarter as it readies itself for an upcoming acquisition by Ferrero Group.

    Drop in Earnings

    The company’s net income for the quarter was a mere $8 million, a significant decrease from the $37 million earned in the same period last year. This represents a year-over-year decrease of 78.4%.

    The company’s net sales for the second quarter also dipped by 8.8%, coming in at $613 million. This slump reflects the weakening consumer demand across all of WK Kellogg’s markets.

    Pending Acquisition by Ferrero Group

    WK Kellogg had previously announced a definitive agreement to be purchased by Italy-based Ferrero Group in an all-cash deal worth $3.1 billion. The deal is anticipated to close in the latter half of the present year, provided it receives the required approval from regulators and shareholders.

    Gary Pilnick, chairman and CEO of WK Kellogg, stated, “Despite the challenging operating environment, we experienced in the second quarter, we are making tangible progress against our long-term strategic priorities, including our supply chain modernization initiative.” He continued, “Our team remains committed to executing our plans for the remainder of the year and preparing for the future as we look forward to merging with Ferrero and commencing this exciting new chapter for WK.”

    The acquisition is viewed as a crucial move to expedite WK Kellogg’s transformation under Ferrero’s stewardship, capitalizing on complementary product portfolios and global outreach.

    Questions & Answers

    Why did WK Kellogg’s net income decrease in this quarter?
    The decline in net income is attributed to weaker consumer demand across all of WK Kellogg’s markets.

    What is the value of Ferrero Group’s acquisition deal with WK Kellogg?
    Ferrero Group has agreed to acquire WK Kellogg in an all-cash deal worth $3.1 billion.

    What does WK Kellogg anticipate from the prospective merger with Ferrero Group?
    The merger with Ferrero Group is expected to fast-track WK Kellogg’s transformation, leveraging the combined strength of their product portfolios and global reach.

  • Ferrero Group Acquires Wk Kellogg In $3.1 Billion Deal, Bolstering North American Presence

    Ferrero Group Acquires Wk Kellogg In $3.1 Billion Deal, Bolstering North American Presence

    The Ferrero Group, a major player in the confectionery industry, has recently announced its acquisition of WK Kellogg in an all-cash transaction amounting to US$3.1 billion. This significant development marks a critical milestone in Ferrero’s ongoing expansion in the North American market.

    In exchange for WK Kellogg’s manufacturing, marketing, and distribution operations in the US, Canada, and the Caribbean, Ferrero will pay $23.00 per share. Ferrero, a company employing over 14,000 individuals across 22 plants and 11 offices in North America, has plans to maintain WK Kellogg’s historical headquarters in Battle Creek, Michigan as the central hub for its North American cereal operations.

    Gary Pilnick, Chairman and CEO of WK Kellogg, believes that this merger with Ferrero will afford his company greater resources and flexibility, thus facilitating the growth of its iconic brands in a highly competitive and dynamic market. He stated, “As a family-owned private company with values in line with our founder, WK Kellogg, Ferrero provides a great home for our people and has a track record of supporting the communities where it operates.”

    Established nearly 120 years ago, WK Kellogg became an independent entity in October 2023 after parting ways with the Kellogg Company. The company owns several popular breakfast cereal brands, including Kellogg’s Frosted Flakes, Kellogg’s Froot Loops, Kellogg’s Frosted Mini Wheats, Kellogg’s Raisin Bran, Kashi, and Bear Naked.

    Lapo Civiletti, CEO of the Ferrero Group, expressed enthusiasm for the acquisition, asserting that it would play a significant role in extending Ferrero’s reach across more consumer occasions. He added, “This also reinforces our commitment to delivering value to consumers in North America.”

    The transaction is slated to be finalized in the second half of this year, contingent upon the necessary regulatory approvals and customary closing conditions.

    Questions & Answers

    What is the significance of the Ferrero Group’s acquisition of WK Kellogg?
    The acquisition represents a major development in Ferrero’s expansion in North America.

    What does the acquisition mean for WK Kellogg’s operations?
    Ferrero plans to maintain WK Kellogg’s historical headquarters in Battle Creek, Michigan as the central hub for its North American cereal operations, thereby preserving WK Kellogg’s operational continuity.

    What is Ferrero’s ultimate aim with this acquisition?
    Ferrero sees this acquisition as a means to extend its reach across more consumer occasions and reinforce its commitment to delivering value to consumers in North America.

  • Kellogg’s launches master brand campaign for ‘healthier’ cereals

    Kellogg’s launches master brand campaign for ‘healthier’ cereals

    Kellogg’s is launching its first master brand campaign featuring its popular sub-brands, including Nutri-Grain, Coco Pops, and others.

    The ‘For Real’ campaign, in collaboration with marketing agency Bastion and comedian Celeste Barber, objects to unrealistic eating trends and misinformation promoted on social media.

    According to Kellogg’s, its new healthy cereals represent a simpler, more realistic method to get real nutrition for breakfast.

    The commercial highlights Kellogg’s latest ‘healthier’ varieties, including Nutri-Grain High Protein Crunch and multigrain Coco Pops Chocos, emphasising the brand’s commitment to providing healthier breakfast options.

    “There are so many mixed messages, myths, and mistruths about breakfast out there that people don’t know what to believe. It leaves them questioning the nutritional value of cereal,” said Bastion national chief strategy officer, Angela Morris.

    Last year, confectionary company Darrell Lea partnered with cereal and snack brand Kellogg’s to create the Darrell Lea Crunchy Nut Corn Flakes Chocolate Block, which is made from 100 per cent sustainably sourced cocoa.

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  • Kellogg board approves company’s split into two listed entities

    Kellogg board approves company’s split into two listed entities

    Kellogg’s board of directors has approved the FMCG giant’s split into two independent, publicly traded entities: Kellanova and WK Kellog Co.

    From October 2, Kellogg Company will be renamed Kellanova and will continue to trade on the New York Stock Exchange under the ticker symbol “K”, while WK Kellogg Co will trade under the ticker symbol “KLG”.

    Kellog chairman and CEO Steve Cahillane said the decision was made after more than a year of comprehensive planning and execution.

    “We are more confident that the separation will produce two stronger companies and create substantial value for shareowners,” said Cahillane.

    Kellanova will focus on an expanding portfolio geared towards snacks and emerging markets, led by various brands.

    It is projected to generate net sales of an estimated US$13.4 to $13.6 billion and an adjusted-basis EBITDA (earnings before interest and tax, depreciation, and amortization expenses) of $2.25 to $2.3 billion next year.

    “We are looking forward to a new era as Kellanova, marked by a more growth-oriented portfolio, a renewed vision and strategy, and an energised organization grounded by a winning culture and our founder’s values,” continued Cahillane, who will serve as chairman and CEO of Kellanova.

    “These elements build on what has already been a track record of strong and consistent financial performance for the Kellanova portfolio.”

    Meanwhile, WK Kellogg Co will continue to build on the foundation of its “iconic” cereal brands and will focus on integrating its commercial strategy and execution while modernizing its supply chain.

    Gary Pilnick will serve as its chairman and CEO following the separation.

    The business is expected to earn an estimated $2.7 billion in net sales and adjusted-basis EBITDA of approximately $225 to $265 million in 2024.

    Pilnick explained that as a standalone company, it will immediately benefit from the advantages of increased focus and end-to-end integration while modernizing its supply chain.

    “WK Kellogg Co has a 117-year legacy of innovation and the soul of a start-up, with an organization incredibly energized by our future,” he concluded. “We’re on a profitable journey to take this great business to the next level.”

    Kellogg Shareowners of record will receive one share of KLG for every four shares of K owned.

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  • Kellogg partners with Bega in peanut-butter flavoured cereal

    Kellogg partners with Bega in peanut-butter flavoured cereal

    Australia’s iconic breakfast brand Nutri-Grain has delighted fans with the launch of a new flavor mash-up that’s set to take your cereal game to the next level. Nutri-Grain has joined forces with Bega Peanut Butter to create an epic flavor combination with a nutty twist. The limited-edition Nutri-Grain Bega Peanut Butter Flavor Cereal consists of the iconic malty crunch that we know and love, followed by a flavor hit of peanut buttery goodness.

    Serving up an “epic taste explosion”, shoppers can grab a box for just $6.95 at Woolworths.

    The new creation comes off the back of the Nutri-Grain x OAK Plus and Coco Pops x Golden Gaytime collabs.

    “Australia went mad for our collabs last year, so we’ve upped the ante with another unstoppable collab,” Dan Bitti, Kellogg’s breakfast lead, said.

    “We’ve brought together the malty-crunch and peanut pieces to bring Aussies something new, that up until now they could have only ever dreamed about.

    Jacqui Roth, marketing manager, Spreads at Bega said: “We’re thrilled to be teaming up with Nutri-Grain. We can’t think of a butter brand to partner with as Bega Peanut Butter makes its debut in the cereal aisle.”

    Meanwhile, KitKat has launched two new flavors inspired by the original café cookie; Byron Bay Cookies.

    With the sweet treat collaboration of the summer, Aussies can now enjoy KitKat Inspired by Byron Bay Cookies – Milk Choc Chunk and Triple Choc.

    Now on supermarket shelves across Australia, the new creation marks the confectionary brand’s exciting first collaboration with an Australian brand, paving the way in cookie creations with an iconic local player.

    The new flavors are set to be a hit, with two options available to satisfy any and all chocolatey cookie cravings.

    The Milk Choc Chunk will delight the biggest cookie lovers, with crisp wafer fingers covered in white choc, topped with cookie pieces on a milk chocolate base.

    For those looking for an extra chocolatey hit, the Triple Choc has you sorted with milk chocolate-covered chocolate wafer fingers topped with crunchy cookie pieces.

    “We’re so excited to introduce KitKat brand’s first Australian collaboration to the market, and thrilled that it’s with iconic and beloved local cookie maker Byron Bay Cookies,” Nestlé head of marketing – confectionery Joyce Tan said.

    “We know Aussies will love these tasty additions to the range, and each bite is sure to transport them to their own beachside Byron Bay break.”

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  • Kellogg’s introduces mixed grain bar

    Kellogg’s introduces mixed grain bar

    Kellogg’s retailers are set for a boost this summer as Kellogg’s announces the launch of three new products. This July, Kellogg’s is introducing Kellogg’s Multi-grain Corn Flakes to the cereal category, a new product from its oldest brand.

    Kellogg’s retailers are set for a boost this summer as Kellogg’s announces the launch of three new products. This July, Kellogg’s is introducing Kellogg’s Multi-grain Corn Flakes to the cereal category, a new product from its oldest brand. Kellogg’s Multi-grain Corn Flakes contains the goodness of three grains; each golden flake is a combination of corn, wholegrain rice and wheat. Kellogg’s consumer research shows that Kellogg’s Corn Flakes are still a firm favorite.

    This new innovation offers fans of the Original the great taste of Kellogg’s Corn Flakes but with the added extra of the goodness of multi-grain.Kellogg’s Corn Flakes fits into the ‘everyday favourites’ sector of the cereal market which is currently worth £269m. Kellogg’s hopes that innovation from its best-loved cereal will enable retailers to maximise on this growing sector.

    Support will begin with TV advertising and promotional pricing beginning in August.

    UK Sales Director, Kevin Brownsey, comments, ”Kellogg’s Multi-grain Corn Flakes are the perfect product for retailers to make the most of the growing consumer interest in health. Consumers trust the Original and know it’s a good breakfast choice – the addition of multi-grain helps to strengthen its health credentials”.

    The snacks category will also be expanded with Nutri-Grain Chocolate Oat-Baked Bar and Special K Mini-Breaks.

    Kellogg’s is building upon the incredible success of Kellogg’s Nutri-Grain Oat Baked Bars with a new variant – Nutri-Grain Chocolate Oat Baked Bars. Launched last year, Nutri-Grain Oat Baked Bars proved a welcome addition to the portfolio and was the number one Kellogg’s snack innovation for 2006.

    The new variant has the same substantial flapjack texture of the original but the added chocolate also satisfies consumers’ sweet cravings.

    Research shows that new product development (NPD) is increasingly important to the total cereal bars category and is now worth over 10% of the total value. Nutri-Grain NPD has also consistently driven the brand growth.

    The entire Nutri-Grain Oat Baked Bars range will be supported with TV advertising in September and the new chocolate variant will be advertised on back of packs. In July, money-off vouchers will hit 2,000,000 households.

    Kellogg’s is also widening its snack offerings with a new bagged snack – new Special K Mini Breaks. At just 99 calories a bag, these new biscuity bites of baked golden oats, wheat, and rice are a controlled calorie solution for consumers with an attack of ‘the nibbles’. The bagged format is designed to fit a number of snacking needs such as snacking at the desk, sharing, and ‘boredom snacking’.

    Available in two variants – Original (multi-packs and singles) and Chocolate (multi-packs) – Special K Mini Breaks will help retailers to achieve incremental growth on the Special K snacking brand. Previous snack innovations for this brand have proved very successful, for example, Special K Chocolate Chip Bar was launched in 2005 and is now worth over £5m.

    Special K Mini Breaks will begin with a four-week burst of TV advertising in September and the product will appear on the back of packs of existing Special K snacks and cereal.

    UK Sales Director, Kevin Brownsey, comments,” With such a diverse number of snacking occasions, the snacks sector is an area of significant opportunities for retailers. The new Nutri-Grain Bar and Special K Mini Breaks help retailers to provide a product to fit these emerging occasions and fill as many consumer snacking needs as possible. The popularity of bagged snacks is growing and Special K Mini Breaks are just the first in a number of bagged snacks innovations planned by Kellogg’s over the next two years.”

  • Kellogg’s tests cereal refill concept in UK supermarket

    Kellogg’s tests cereal refill concept in UK supermarket

    UK supermarket Asda is undertaking a 12-month trial to test initiatives to reduce, remove and reuse plastic packaging at its Middleton store in Greater Manchester.

    Shoppers are invited to bring their own containers to stock up on products such own brand coffee, rice and pasta at designated refill stations. The grocery has partnered with FMCG giants Unilever and Kellogg’s to create refill points for cereals such as Rice Krispies and Coco Pops and PG Tips tea.

    “We’re getting ready to trial lots of new and innovative ways to reduce and remove plastic packaging in our first-ever sustainability store. Customers at our Middleton store in Leeds will be the first to try the new innovations starting in May this year. Before then we’ll be working hard in the store to install new refill solutions and recycling options, like in the artist’s impression above,” said Asda in a statement.

    “We know lots of our customers would like to see us remove packaging on loose produce so this is another thing we’ll be trialing at the store. We will be removing the plastic packaging from mushrooms and cucumbers on produce and we’ll also be selling “naked” flowers without any plastic packaging,” said Asda.

    The supermarket will also install new recycling facilities in store. It will have a reverse vending machine for plastic bottles and cans, hanger recycling and a deposit box for unwanted small plastic toys.

    Asda said it will monitor feedback from customers to see if the new program will affect consumer’s shopping habits.