Kellogg's Impressive Growth Fueled By A Strong Snacking Market
Pour a bowl of Frosted Flakes and it's up to you whether to add the milk. Kellogg's breakfast cereals — the brand is responsible for the likes of Fruit Loops, Frosted Mini Wheats, and Rice Krispies among many others — are the ultimate snack. Whether you start your morning with a bowl of Kashi or keep a plastic bag of Raisin Bran on hand, Kellogg's has long been known as cereal's mastermind.
Yet while the brand is now a household name, it has humble origins. According to the Kellogg Company's website, the cereal started more than 100 years ago and can thank Corn Flakes for launching it to breakfast fame.
Expanding upon its long-standing hold over the cereal industry, Kellogg's has since carved out a name for itself that goes beyond the breakfast bowl. Its pantry repertoire also includes Pringles, Cheez-Its, and Pop-Tarts — quintessential grab-and-go snacks. Such foods, as well as cereals, have contributed to Kellogg's recent growth; the latest data positions the brand on the up-and-up, with snacking quite literally feeding Kellogg's popularity.
Recent data reflects snacking's stronghold — and bodes well for Kellogg's business
According to Kellogg's 2022 second quarter research, net sales of the brand's products increased by 9% from last year, thanks to a rise in snack, noodle, and cereal consumption. Meanwhile, within the first half of 2022, the brand's net sales increased by 6%.
Such results were better than anticipated, though Kellogg's growth is not unique to 2022. Per CNBC, Kellogg's 2021 findings reflected a similar surge in popularity. In light of 2020's pandemic, snacking accelerated ... and has continued to do so in the years since COVID-19's onset. From 2020 to 2021, Kellogg's net sales rose by 5.1%, amounting to $3.58 billion.
This net sales growth suggests a positive outlook for Kellogg's impending business shift. In June, Kellogg's announced plans to splinter into three separate businesses: one related to global snacking, one for cereal, and one for plant-based foods.
"Our improved full-year outlook incorporates not only our better-than-expected results of the first half but also confidence in our ability to continue to manage through the current supply and cost challenges while sustaining momentum in our world-class brands," said Steve Cahillane, Kellogg Company's Chairman and Chief Executive Officer. He stated in Kellogg's report, "And even as we prepare for one of our biggest portfolio transformations yet, the proposed separation into three independent companies, we remain laser-focused on delivering on this improved outlook."
In addition to putting out snack-worthy products, Kellogg's has also set its sights on addressing food insecurity. We'll snack to that.