Kellogg homes in on away-from-home eating

by Monica Watrous
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BATTLE CREEK, MICH. – From veggie burgers to mini pancakes, a diverse product portfolio has positioned the Kellogg Co. to compete in various categories across away-from-home channels.

Comprised of several distinct channels in multiple business segments, Kellogg’s U.S. Specialty Channels division represents more than $1 billion in annual net sales for the company.

“We have a long history of strong growth, and we’ve seen acceleration in recent years,” said Brian Huff, president of U.S. Specialty Channels, during a May 2 call with financial analysts. “We have No. 1 share positions in most of our businesses and categories.”

Acquisition is a key strategy for the division. The pivotal purchase of Gardenburger in 2008 has extended the company’s presence in the relatively unsaturated meatless marketplace, and last year’s addition of Pringles strengthens its savory snacks business.

“Pringles has been a great addition to our brand lineup and provides a strong anchor in a sandwich accompaniment that is critical in away-from-home venues,” Mr. Huff said. “In combination with Special K and Cheez-It, these three strong brands bring diversity and variety to the category and provide accretive revenue growth for us and our customers.”

Another area of focus for Kellogg is innovation, particularly in the quick-growing convenience and gas channel.

“Special K is our fastest growing brand in this channel, with excellent growth in protein bars, chips and beverages,” Mr. Huff said. “In the future, our strategy will continue to focus on expanding our core portfolio and reach and investing in innovation to drive continued category growth.”

Innovation also has helped drive Kellogg’s growth in the K-12 channel recently with the introduction of Eggo mini pancakes and waffles.

“Keeping our brands relevant and available to the 55 million K-12 students in the U.S. is a priority for Kellogg,” Mr. Huff said. “We continue to invest in innovation and renovation of our brands to meet and even exceed U.S.D.A. guidance.”

Kellogg has identified further opportunities for growth in savory snacks and beverages — categories that represent huge revenue across the industry but are underrepresented at the company.

“We will continue to drive revenue growth by focusing on three key areas — by driving and expanding our core brands through incremental marketplace reach, establishing a single-serve beverage business and driving increased placement of savory snacks,” Mr. Huff said.
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