Kellogg has recently made an announcement in regards to multiplying itself. The company has revealed that it is separating itself into three independent companies. The officials have also confirmed that all three companies they plan on launching will be publicly listed.
Kellogg Sections Off to Three Brands
The company plans on separating into three independent companies that will target three different segments. The first company will focus on a plant-based business. The second company will operate as a cereal business and the third company will operate as a snack business.
Reason for the Separation
The executives stated that all three business types they have decided to pick have the potential to grow larger with time. They have the ability to perform independently and grow into full-fledged businesses.
They aim to direct their sources independently for each business. This way, they will be able to avoid any conflicts pertaining to capital or business decisions. Each company will have its own executives and higher management.
Most importantly, all three businesses will follow their own business strategies and priorities. They also know that each business will never have to compete with each other in terms of products and services.
Kellogg is Exploring More Options
Apart from the three separate companies, Kellogg is also aiming to launch more companies. By launching more companies, Kellogg wants to target more industries.
Kellogg officials revealed that the combined performances of their cereal and plant-based business divisions were very promising. The 20% of the company’s overall revenue in the year 2021 was achieved by the combined revenues of the cereal and the plant-based businesses.
The rest of the revenue was generated by a number of businesses that include North American brands for frozen breakfast, international cereal, noodles, and snacks.
Names of the New Businesses
The decision of finalizing the names of the businesses has still not come to a conclusion. They have already proposed the executives and the management who will be operating the businesses. For now, they have decided not to publicly announce the names of the executives and the management.
However, they will be announcing their names in next year’s first quarter. It has been confirmed that Steve Cahillane, the CEO of Kellogg will remain the CEO of the business that runs snacking on a global scale.
The snacking business will be responsible for all operations related to multiple brands. These brands include RXBAR, Pop-Tarts, Cheez-It, and Pringles.
Following the announcement by Kellogg, the company’s share prices soared by 6.5%. With the company finally separating its businesses, it will have the ability to be very profitable for its investors.