Kellogg Snapshot: company sees broad growth as supply chain issues subside, though areas including Frozen Foods still suffer disruptions; CEO highlights the value of shelf space and innovations, says the 'true promise of one-to-one marketing' is 'upon us'

LOS ANGELES , May 9, 2023 (Kellogg Co.) –

Overall Results:

• Kellogg reports fourth consecutive quarter of double-digit organic net sales growth

• Kellogg continues to deliver broad-based growth across each of its four regions and across each of its four major category groups

• Announcement of new company names has been well received by stakeholders

North America:

• Recorded organic net sales growth of 14% with price mix accelerating for a fourth consecutive quarter
• Company continues to implement revenue growth management actions in order to catch up with input cost inflation
• Operating profit up 21% year-over-year
  • Results driven by revenue growth management, along with productivity and diminishing bottlenecks and shortages
• Snacks grew 15% in the quarter
  • Pringles well outpaced the US salty snacks categories with double-digit growth
    • Led by multi-packs and core four flavors
  • Crackers saw double-digit consumption growth by Club and Townhouse brands
• In portable wholesome snacks, company's decision to discontinue various Kashi bars and prioritization of capacity-constrained Pop-Tarts SKUs masked continued momentum in Rice Krispies Treats, and a resurgent Special K bars business
• Frozen Foods saw supply disruptions both in Eggo frozen breakfast business and Morningstar Farms plant-based foods business
  • Company is confident in its ability to improve frozen performance as the year progresses
• US Cereal category grew at a double-digit rate
  • Resumed commercial activity produced share gains across the portfolio, led by Rice Krispies, Special K, Raisin Bran and Frosted Flakes
• US away-from-home business gained several points of share across each major channel of convenience stores, food service and schools
  • Canada consumption growth up roughly 6 points of share year-over-year due to restoration of inventory

EMEA:

• Region posted third consecutive quarter of organic net sales growth of at least 20%
  • This growth was broad-based across all major sub-regions, and led by its biggest brand, Pringles 
• Pringles saw notable growth and share gains in markets like Australia, Korea, Japan and Thailand 
• EMEA Cereal and Noodles also sustained strong momentum
  • Company continues to expand its Noodles business outside of Nigeria

Latin America:

• Delivered double-digit organic net sales growth
  • Growth was led by Mexico, with notable strong growth in Brazil and Central America and Caribbean sub-region
• Snacks business continued to deliver double-digit organic net sales growth
  • Salty snacks sustained double-digit growth in Mexico and Brazil market, led by Pringles
  • Cereal also recorded double-digit organic net sales growth

Europe:

• Continued to post strong 8% organic net sales growth across salty snacks, wholesome snacks and cereal
• Portable wholesome snacks saw double-digit consumption growth overall
  • Category gained 2 full share points in the UK, led by Rice Krispies Squares

Kellanova:

• Soon-to-be Kellanova businesses will be a higher growth company with 80% of sales coming from snacks and emerging markets

WK Kellogg Co.:

• Soon-to-be WK Kellogg Co. businesses continue to show recovery in net sales, consumption and share amid high input cost inflation

  • Growth supported with sustained innovation and improving supply

  • In Q3, company plans to test run WK Kellogg on its own in areas including procurement, manufacturing, invoicing, financials

  • Employee sentiment and engagement remain "very high"

• WK Kellogg Co. will benefit from focus and resource prioritization

Looking Forward:

• Company is deploying technologies such as artificial intelligence and machine learning

• Supply constraints, bottleneck shortages are improving "almost everywhere," becoming "much more normalized" compared to last year

• Kellogg's social and environmental program, the Better Days Promise, continues to be a strategic priority

• CEO Steven Cahillane says:

  • "The bar of innovation has been raised... there is no question that innovations have to be better, they have to be performing right out-of-the-gate."

  • "Shelf space is more valuable than it's ever been, today, in my years in the business."

  • "The whole world of marketing has changed like it never has before. The true promise of one-to-one marketing that we've been talking about for so many years is upon us with data and analytics, more sophisticated than they've ever been, first-party data, more robust and more available than it's ever been to really target consumers in a way that marketers have dreamed up for years."

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.