Dividing Kellogg’s empire into three may potentially prove game-changing

Guest blog: Following the news that US food giant Kellogg’s will split into three independent companies in a radical transformation; Nidhi Chauhan, Senior Consumer Analyst at GlobalData, a leading data and analytics company, offers her view.

“Kellogg’s recent announcement to split the business into three independent companies, sectioning off into snacking, cereal, and plant-based businesses, is a logical move and one that might provide the necessary stimulus to its overall growth as it looks to focus on the core snacking business.

“This trend is becoming increasingly common in the consumer goods industry, especially as businesses have faced unprecedented challenges in the last couple of years, starting with the global pandemic in 2020 and now the Russia-Ukraine conflict and subsequent rising inflation and supply chain issues. Restructuring such as this is one way of finding growth opportunities as economies have slowed down and consumers are tightening their purse strings.

“The savory snacks business is expected to grow at a compound annual growth rate of 4.4% between 2021 and 2026, reaching up to a global value of $231.9 billion in 2026, according to GlobalData estimates. Kellogg’s is looking to strengthen and further enhance its strategic position in this market. Snacking companies have recently leaned into the at-home snacking trend by introducing more snacks and snapping up smaller brands; the recent acquisition of Clif Bar by Mondelez for an estimated $2.9 billion is a testimony to growing interest in the category.”