Kellogg, the renowned food company, has announced its strategic focus on its newly established snacking entity, Kellanova. The company’s CEO, Steve Cahillane, unveiled the plans during a conference with Wall Street investors, revealing Kellanova’s intent to elevate Pringles into a $4 billion brand and to propel other iconic products such as Cheez-It and Pop-Tarts into global powerhouses.
The decision to split its snacking division into Kellanova is part of Kellogg’s strategy to harness the potential of its diverse portfolio. Cahillane emphasized Pringles’ adaptability to market demands, attributing its potential to innovation in flavors and packaging. Despite Pringles’ acquisition in 2012, Cahillane noted that the brand has yet to reach its full potential, holding only a single-digit share of sales in most regions.
Kellanova’s vision extends beyond existing markets, with plans to penetrate new channels such as convenience stores and smaller retail outlets by introducing smaller-pack items. Currently, a quarter of Pringles’ sales occur in these locations, according to Kellogg’s insights. Cahillane expressed optimism about this strategic move, highlighting the untapped potential within these channels for salty snacks.
Cheez-It, another beloved brand under Kellanova, is set to expand its global footprint. The brand is slated for launch in new markets over the next three years, with the United Kingdom, Ireland, Germany, and Australia on the list for 2024. France and Spain are earmarked for 2025, followed by Japan in 2026. Kellogg’s intends to follow a measured approach to international expansion, ensuring a steady growth trajectory for its snacking brands.
The overarching strategy aims to create a fertile ground for sales growth. Kellanova has demonstrated impressive growth, boosting sales by approximately $3 billion between 2019 and 2022, with a compound annual growth rate of 9%, as indicated in the company’s presentation.
Some of Kellogg’s staple brands are also making significant strides. Both Eggo and Pop-Tarts are inching closer to the $1 billion revenue milestone, each generating around $800 million in sales during 2022. Rice Krispies Treats secured sales of approximately $500 million in the same period. These five cornerstone brands, including Pringles and Cheez-It, collectively contributed to half of Kellanova’s total sales in 2022, underscoring their significance in the company’s strategic growth plan.