Kellogg, 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 food maker, said Tuesday that the spinoff of the yet-to-be-named cereal and plant-based foods companies should be completed by the end of next year.
Kellogg’s had net sales of $14.2 billion in 2021, with $11.4 billion generated by its snack division, which makes Cheez-Its, Pringles and Pop-Tarts, among other brands. Cereal accounted for another $2.4 billion in sales last year, while plant-based sales totaled around $340 million.
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” said CEO Steve Cahillane.
Cahillane will become chairman and CEO of the global snacking company. The management team of the cereal company will be named later. The board of directors has approved the spin-offs.
Shareholders will receive shares in the two spin-offs on a pro-rata basis relative to their Kellogg holdings.
US cereal sales have been waning for years as consumers moved to more portable products, like energy bars. They saw a brief spike during pandemic lockdowns, when more people sat down for breakfast at home. But sales fell again last year.
The cereal and plant-based meat companies will remain headquartered in Battle Creek, Mich., where Kellogg was founded in 1906. The snack company — which accounts for 80% of Kellogg’s current sales — will have dual campuses in Battle Creek and Chicago, with its headquarters in Chicago. Kellogg’s three international headquarters in Europe, Latin America, and AMEA (Asia, Middle East and Africa) will remain in their current locations.
Shares of the company jumped 3.7% in midday trading.