BATTLE CREEK, MICH. — Kellogg Co.’s cereal business overcame “enormous obstacles” in North America in fiscal 2022, ultimately delivering strong net sales growth in the period, said Steven A. Cahillane, president and chief executive officer of Kellogg.
“We entered the year depleted on finished goods inventories,” Mr. Cahillane said during a Feb. 9 conference call with analysts. “As we rebuilt those inventories SKU by SKU, we were able to replenish retailer shelves more quickly than we anticipated. And during the second half, we were able to ramp up our commercial programs, and we have entered the new year with real momentum.”
Since restoring inventories and commercial activity in North America, Mr. Cahillane said Kellogg has experienced a sequential improvement in performance, accelerating both consumption growth and share recovery.
“This business is back on track and is poised to sustain growth in 2023 when we will have a full year of commercial activity,” he said. “In addition, with supply back in place, this business has begun to restore its profit margins.”
Kellogg’s strong performance in cereal was not limited to North America, though. In Europe, Mr. Cahillane said the cereal business showed sequential improvement in organic net sales growth in each quarter of fiscal 2022 behind the strength of commercial activities and revenue growth management needed to cover rising costs.
“In-market, category growth rates in markets across the region picked up in the fourth quarter, and we have been particularly pleased with accelerated growth and share gains for brands like Rice Krispies in the UK, Tresor in France and Special K in several markets,” he said. “So you can see that Kellogg Europe remains in very good condition as we head into 2023.”
Mr. Cahillane said Kellogg has strong brand plans in place for 2023 in Europe, including renovation and innovation. The company also will be celebrating its 25th year of its Better Days social program in the United Kingdom.
In Latin America, Kellogg felt the impact of supply disruption coming out of North America, particularly in the company’s Caribbean business, Mr. Cahillane said. But, once the disruptions were behind, cereal sales in the region reaccelerated strongly, he said.
“In-market, our consumption growth was robust across the region in the quarter and the full year, led by key brands like Frosted Flakes in Mexico and Brazil, Corn Flakes in Brazil and Puerto Rico, and Froot Loops in Colombia,” he said.
Mr. Cahillane said price/mix led growth within Kellogg’s cereal business in AMEA (Asia Pacific, Middle East and Africa).“Our most developed market, Australia, posted strong consumption growth in the quarter and year, led by many of our biggest brands, including double-digit gains for Corn Pops, Corn Flakes and Sultana Bran,” he said. “We also sustained good consumption growth in emerging markets with particular strength in India.”