Kellogg wants to be part of a balanced product portfolio
Here’s a takeaway from the unexpected news that Kellogg Co. is splitting itself into three businesses: The U.S. breakfast cereal business is not so great.
Tony the Tiger and his pals (Snap, Crackle, Pop and Toucan Sam among them) are a very small part of the Battle Creek, Mich.-based giant these days, with Kellogg’s snack foods division making up the vast bulk of its annual sales.
In fact, when the company splits, the global snack foods unit — including the Pringles, Cheez-It and Pop-Tart brands (if you ever wondered if Pop-Tarts are a breakfast food or a snack, there’s your answer) — will be worth $11.4 billion in annual sales, or 80 percent of the current Kellogg revenue stream.
The “legacy” business, including the Corn Flakes brand introduced in 1894 by W.K. Kellogg, will be worth about $2.4 billion and cover only cereal business in the U.S., Canada and the Caribbean. The snack food division will oversee cereals in the rest of the world and frozen breakfast foods like the Eggo waffle brand.
Kellogg’s plant food business, which covers the Morningstar Farms brand, will be worth $340 million.
The corporate giant doesn’t have its own plastics operations, but obviously is a big customer for plastics packaging, so the maneuver will have a ripple effect. The company also is facing pressure to use more recycled content in its packaging.
The move is, as all these corporate decisions seem to be, about adding “shareholder value,” CEO and Chairman Steve Cahillane said in a news release.
Cahillane will remain CEO of the new snack company, which Kellogg said has the highest growth potential. The new breakfast cereal business will, among other things, focus on the “restoration of inventory,” which should mean fewer empty shelves due to supply chain issues.
Injection molders are growing
This week’s print issue of Plastics News has the ranking for the top 100 injection molders in North America, with both packaging and automotive suppliers continuing to dominate the largest firms.
Those two end markets — with medical molders rising up to challenge them during the past few years — are part of an overall 6.9 percent increase in average sales per company.
“While higher resin prices and inflation no doubt contributed to injection molders’ 2021 sales growth, pricing played a smaller role than you might expect,” PN’s editorial research coordinator Hollee Keller writes in her All Things Data blog on the ranking. “Many companies experienced lag times in passing through higher prices, making it difficult to make a direct estimate of company sales changes based on material costs alone.”
Injection molders have seen sales climbing since 2019, working to supply essential products through COVID-19 shutdowns even as they battled shortages of material and manpower.
Apply now for RJG award
Training and consulting company RJG Inc. is accepting applications through December for its 2023 Mold Smart Award to highlight improvements from companies using its products.
The Traverse City, Mich.-based company will have honorees from each region where it operates: the United States, Latin America, Europe and Asia.
For 2022, injection molder Plastikos Inc. took the top award. RJG said in a news release that implementing its technology led to a 365 percent improvement in production volume while posting a 90 percent decrease in parts-per-million rejects for Plastikos.
Automotive molder Yanfeng Automotive Interior Systems Co. took the award for Latin America, and Stoneridge Inc. took the award for Asia.
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