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Kellogg Company (NYSE: K) today announced two significant changes to its North American business designed to provide the right operating model and portfolio to drive profitable growth in the future. .
First, starting in January 2019, Kellogg's North American organizational structure (KNA) will be reorganized to enable the company to market itself and generate optimal growth. Second, Kellogg is studying the sale of its biscuit and fruit snack business to better target its core businesses.
"The Kellogg Company's deployment strategy for growth, announced earlier this year, calls on the company to better target its efforts and align its resources with its key growth opportunities in its revenue and return to a competitive position." long-term sustainable growth, "said Steve Cahillane, chairman of the board of directors. Chief Executive Officer, Kellogg Company. "Ultimately, we believe these changes will make Kellogg more agile and better focused on the growing demand for our foods."
Structural changes reduce complexity and increase responsivenessTo increase agility, Kellogg brings four major changes to its KNA organizational structure:
- Consolidate the US Morning Foods, Snacks and Frozen Foods business units into a single category-based organization, representing 80% of KNA's revenues;
- Grouping of Morning Foods, Snacks and Frozen and Retail Channels sales teams into a single Kellogg sales organization in the United States to improve customer focus;
- Establishment of a consolidated end-to-end KNA logistics chain, including procurement, manufacturing, logistics and customer service, to scale up, improve capabilities and to ensure the achievement of the company's growth objectives; and,
- Invest in new e-commerce capabilities and integrated business planning.
"To carry out our" Deploy for Growth "strategy in the KNA, we need to grow our business through strong business ideas, innovation, prioritized investment choices, and the ability to grow. excellence in execution and faster speed to market, "said Chris Hood, president of Kellogg North America." We are confident that the changes we are putting in place will help us achieve these goals. "
Shaping a growth portfolioInvesting in the business sectors with the best growth opportunities is at the heart of designing a growth portfolio, a key element of Kellogg's Deploy for Growth strategy.
After a thorough evaluation, Kellogg explores the sale of its cookies business (including Keebler, Famousmos, From the mother and Murray brands), and fruit snacks (including Stretch Island Mark).
"We need to make strategic choices about our business and these brands have struggled to compete for the resources and investments of our portfolio," added Cahillane. "However, we are confident that these iconic and beloved brands can thrive in the portfolio of another organization capable of boosting growth in these particular categories."
The reorganization of Kellogg North America is one of the latest initiatives under the company's K project. As such, its up-front costs and ongoing savings are included in the financial estimates previously reported for the K Project's five-year program. The financial impact of the potential sale of businesses will be taken into account when the project is completed. 39, announcement of any transaction.
More details will be provided during the "Day @ K" event for analysts and investors on Tuesday 13 November. A webcast of the event is available at the following address: https://investor.kelloggs.com.
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