Kellogg, the renowned food company, has laid out its strategic vision for its forthcoming snacking-focused entity, Kellanova. This endeavour will be bolstered by a concentrated effort to transform Pringles into a $4 billion brand while also propelling the likes of Cheez-It and Pop-Tarts to international prominence.
In a recent conference with Wall Street investors and analysts, Kellogg’s CEO Steve Cahillane detailed the pivotal role that Pringles and Cheez-It will play as cornerstones of the impending snacking spinoff, Kellanova. This strategic move is aimed at not only solidifying market share but also catalyzing exponential growth in the snacking domain. Kellogg’s projections estimate that Kellanova will achieve net sales ranging between $13.4 billion and $13.6 billion in 2024 following the separation.
Cahillane, elaborating on the potential of Pringles, a brand acquired by Kellogg in 2012, highlighted its adaptive nature and ability to respond to shifting market demands through innovations in flavour and packaging. Despite its existing achievements, Cahillane indicated that Pringles has yet to reach its zenith, holding a modest single-digit share of sales across most regions.
Kellanova’s expansion strategy extends beyond Pringles. The company intends to diversify its distribution channels by introducing smaller packaging options, thereby penetrating convenience stores and smaller outlets. Presently, only 24% of Pringles are sold through such avenues, indicating considerable growth potential.
Cheez-It is poised for a major international expansion, targeting markets in the U.K., Ireland, Germany, and Australia in 2024, followed by France and Spain in 2025, and Japan in 2026. Cahillane disclosed that Kellanova plans to replicate this approach for several of its other snacking brands in due course.
Cahillane emphasized that this strategic move will substantially extend the runway for growth. The presentation highlighted Kellanova’s remarkable achievement of augmenting sales by approximately $3 billion between 2019 and 2022, marking a compound annual growth rate of 9%.
As Kellogg readies itself for the corporate split, these strategic initiatives underscore its commitment to unlocking the full potential of its snacking portfolio and expanding its global footprint.