OCTOBER 3, 2023 — KELLOGG’S BREAKS INTO TWO PARTS
Kellogg officially split into two separate, publicly traded companies, Kellanova, which kept the "K" ticker symbol and is focused on snacks and other foods, while WK Kellogg, with the ticker symbol "KLG," is home to the traditional cereal brands.
Look for personnel disruptions as the companies coalesce into separate entities.
JUNE 21, 2022 — MASS CARNAGE AHEAD AS KELLOGG’S BREAKS INTO THREE COMPANIES
Kellogg Company announced that its Board of Directors has approved a plan to separate its North American cereal and plant-based foods businesses, via tax-free spin-offs, resulting in three independent public companies, each better positioned to unlock their full standalone potential. The three companies, whose names will be determined later, would be the following:
"Global Snacking Co.", with about $11.4 billion* in net sales, will be a leading company in global snacking, international cereal and noodles, and North America frozen breakfast, with iconic, world-class brands and strong underlying growth momentum and profitability;
"North America Cereal Co.", with about $2.4 billion* in net sales, will be a leading cereal company in the U.S., Canada, and Caribbean, with a portfolio of iconic, world-class brands and compelling opportunities for investment and profit growth; and
"Plant Co.", with about $340 million* in net sales, will be a leading, profitable, pure-play plant-based foods company, anchored by the MorningStar Farms brand, with a significant opportunity to capitalize on strong long-term category prospects by investing further in North America penetration and future international expansion.
The Company plans to separate into three independent companies, by spinning off its U.S., Canadian, and Caribbean cereal and plant-based businesses, which collectively represented approximately 20% of its net sales in 2021
The remaining business, which represented about 80% of net sales in 2021, is focused on global snacking, international cereal and noodles, and North America frozen breakfast
This transaction represents another bold action toward transforming Kellogg's portfolio to further enhance performance and value
The proposed separations create greater strategic, operational, and financial focus for each company and its stakeholders, and will build on Kellogg's current momentum
More information can be found in Kellogg’s press release.
DECEMBER 22, 2021 — STRIKE OVER
The 1,400 striking Kellogg's employees have voted to ratify a tentative labor contract that provides immediate, across-the-board wage increases and enhanced benefits for all employees at the company's four U.S. cereal plants.
DECEMBER 12, 2021 — KELLOGG’S THREAT TO UNIONS: WE WILL REPLACE 1,400 WORKERS.
Financial publications are reporting that the company is threatening to permanently replace 1,400 striking workers at factories in four states: Michigan, Nebraska, Pennsylvania, and Tennessee.
Disputes over pay, benefits, and the prospect of more jobs being moved to Mexico, are the main issues of the ongoing negotiations.
According to Chris Hood, president of Kellogg North America, “We have made every effort to reach a fair agreement, including making six offers to the union throughout negotiations, all of which have included wage and benefits increases for every employee. It appears the union created unrealistic expectations for our employees.
“The prolonged work stoppage has left us no choice but to hire permanent replacement employees in positions vacated by striking workers. These are great jobs and posting for permanent positions helps us find qualified people to fill them. While certainly not the result we had hoped for, we must take the necessary steps to ensure business continuity. We have an obligation to our customers and consumers to continue to provide the cereals that they know and love.
OCTOBER 27, 2021 — 73 LAYOFFS IN MARIEMONT, OHIO
The company has announced that a “reallocation of production in its snacks network” is responsible for the layoffs of 73 employees at its Mariemont, Ohio bakery operation. The layoffs will occur between December 20, 2021, and January 1, 2022.
SEPTEMBER 3, 2021 — 212 LAYOFFS IN BATTLE CREEK, MICHIGAN
The company has announced plans to cut 212 jobs at its Battle Creek facility by the end of 2023, including 174 hourly and 38 salaried jobs.
According to a company spokesperson. “While this is the right thing to do for the business, any decision that impacts people is incredibly difficult. We are committed to helping our talented and dedicated employees, and we are devoted to working with them and their union to ensure they have outplacement assistance, resources, and support through this transition.”
"After very careful consideration and detailed analysis, we have presented a planned reallocation of cereal production across our RTEC [ready-to-eat cereal] Americas network. If these plans are finalized, they will deliver significant savings that could be reinvested into the business to drive growth and help to regain share. These plans build on the streamlining efforts announced in 2017, some of which were previously completed."
Some believe that the announcement may be linked to union negotiations with the present contract expiring October 5, 2021.
FEBRUARY 19, 2021 — 250 LAYOFFS IN CINCINNATI, OHIO.
The company has announced that it will be shutting down two production lines at its Mariemont facility, resulting in 165 layoffs.
The sale of its Keebler and Famous Amos brands to Ferrera Co. will result in 65 layoffs as local production is ended.
These changes will result in another 20 layoffs of salaried support workers.
According to a company spokesperson, “While this would be the right thing to do for the business, it is never an easy decision to make when people are impacted. When the planned changes are complete, the plant will continue to produce a number of Kellogg cracker brands."
AUGUST 9, 2019 KELLOGG TO LAYOFF 108 FROM FROZEN FOODS PLANT
The company has announced that it will lay off 108 employees at its frozen foods plant in Atlanta by October 2019. This should come as no surprise to employees who were previously notified.
A company spokesperson speaking about the 2018 layoff announcement noted, “At that time, we announced our intent to close our Atlanta plant, as it does not allow for cost-effective expansion and growth of the business. The closure should be complete by Q4 2019 and will result in 108 layoffs. This decision is the right thing to do for our business; it is never an easy decision to make when people are impacted.”
The closure is part of the Company’s Project “K” initiative which involves consolidation, cost-cutting, and other productivity initiatives.
APRIL 2, 2019 KELLOGG’S DIVESTS SNACK COOKIE BUSINESS
Kellogg’s has announced plans that they are selling their Keebler, Famous Amos, and fruit snacks businesses to Ferrero, the owner of Nutella, for $1.3 billion in a deal that will close in July 2019.
The deal will include 6 domestic (U.S.) food manufacturing facilities and the responsibility for a leased manufacturing facility in Baltimore, Maryland.
According to Kellogg’s CEO, Steve Cahillane, "Divesting these great brands wasn't an easy decision, but we are pleased that they are transitioning to an outstanding company with a portfolio in which they will receive the focus and resources to grow."
This will be a dangerous period for employees as the new owner restructures to consolidate operations, eliminate duplicate functions and redundant employees, and cuts additional costs by reducing the workforce.
FEBRUARY 8, 2019 — ADDITIONAL LAYOFFS IN BATTLE CREEK.
Kellogg has announced that they would be cutting 79 positions nationwide, 67 in Battle Creek, in support of their North American division. Also mentioned was the potential sale of their fruit snack and cookie business.
These layoffs are in addition to the 30 positions lost in November 2018.
SEPTEMBER 3, 2017 — Original post …
Battle Creek, Michigan-based Kellogg’s has announced that they would be laying off at least 223 workers in its Battle Creek facility as well as mothballing two production lines which may be reinstated if demand grows. Unfortunately, that is only one part of the equation as Kellogg’s restructures its operations. According to published estimates for the large cereal maker, 11,000 people may find their jobs in jeopardy as Kellogg’s becomes “focused on eliminating work that doesn’t drive the highest returns.” Ohio lost 250 jobs, Tennessee lost 175, North Carolina lost 500, New York lost 300, and 219 lost their jobs in Minnesota. Employees outside the United States are also being affected by company-wide retrenching.
Jobs are becoming a greater political issue, especially among Democrats like Senator Robert P. Casey Jr. (D-PA) who is requesting that Kellogg provide more specific details about future job losses in Pennsylvania. Even if the company provides a perfunctory response, it is another “talking point” that can be used when campaigning.
WHY?
According to the New York Times …
“For the last decade, the cereal business has been declining, as consumers reach for granola bars, yogurt, and drive-through fare in the morning. And the drop-off has accelerated lately, especially among those finicky millennials who tend to graze on healthy options — even if Cheerios and some other brands come in whole-grain varieties fortified with protein now.”
“Cereal consumption peaked in the mid-1990s, according to the NPD Group, a consumer research firm. Still, some 90 percent of American households report buying ready-to-eat cereal, which remains the largest category of breakfast food with some $10 billion in sales last year, according to Euromonitor, down from $13.9 billion in 2000. And the consumer research firm estimates sales will fall further this year to $9.7 billion.”
You may wish to read the New York Times article in its entirety to get a feel for the buying habits and demographics of a rapidly changing and declining market.
This should come as no surprise to readers as per our blog post, “Getting My Cereal Faster With Outsourcing” which appeared on July 10, 2017.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?
