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The food manufacturer announced on Monday that it was planning to divest its business in the biscuit and fruit snack segments, including Keebler, Famous Amos and other brands, in order to focus on products registering faster sales growth.
It is the latest food manufacturer to rethink its product line as US consumers buy healthier snacks and cooler foods.
J. M. Smucker
Co.
At the beginning of the year, Pillsbury pastry blends were sold to a private equity firm for $ 375 million, including debt. In January, Nestlé SA sold its candy business in the United States to Ferrero International SA, including the $ 2.8 billion Butterfinger and Baby Ruth brands.
Brands of Conagra
Inc.
and
General Mills
Inc.
announced their intention to divest brands that are not at the heart of their business.
And
Campbell Soup
Co.
is also looking for a buyer for its international biscuit brands and for a fresh juice and carrot business that does not fit perfectly with its portfolio of canned and packaged products.
Activist investors such as Third Point LLC, which holds stakes in Nestle and Campbell, have encouraged these reforms. However, long-standing food manufacturers still struggle to generate strong growth in canned and canned products, which in many cases do not match current consumer tastes. Some companies, including General Mills Inc. and
Unilever
PLC, recently saw sales of its biggest brands improve after selling other brands to refine their field of action.
Kellogg said it has not given priority to investment in promotion and innovation for fruit biscuit and snack brands in recent years. Their sale would allow the company "to focus more on its core business," Kellogg said in a statement. The companies on sale have an annual business turnover of about 900 million dollars.
In addition to grains such as Frosted Flakes, Kellogg, based in Battle Creek, Michigan, also owns Pringles, Pop-Tarts, Cheez-Its, and other brands.
Cereal sales have been a constant problem for Kellogg in recent years. Kellogg's chief executive, Steve Cahillane, who joined the company about a year ago, has been fighting for sales of well-known brands like Special K. to continue to fall.
"It's so difficult when major consumer brands that do not grow or fall back to growth," said Mr. Cahillane in an interview last month, highlighting recent progress in grain sales.
Cahillane's focus on single-serve snack packs boosted sales in the third quarter, but detracted from earnings, Kellogg said on Oct. 31, cutting stocks by 9 percent that day.
Kellogg bought Keebler Foods Co. for $ 3.86 billion in 2001, which tripled its debt and opposed it to Nabisco, whose brands like Oreo and Chips Ahoy have long dominated the biscuit business.
Nabisco, who now belongs to
Mondelez International
Inc.
Spends a lot of money and resources on getting retailers to showcase their products and develop new flavors and varieties.
Kellogg also announced on Monday that it would reorganize its North American unit to be more agile and its resources better allocated. The company announced that it would invest in e-commerce capabilities, consolidate its supply chain and consolidate several sales teams.
Write to Annie Gasparro at [email protected] and Micah Maidenberg at [email protected]
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