Kellogg is letting go of its Eggos. Rather, the frozen waffle brand will no longer fall under the general Kellogg's umbrella, but instead will be absorbed into one of three stand-alone businesses that the food conglomerate has announced it's splitting into. The Wall Street Journal notes the three new publicly traded businesses will be dedicated to the parent company's North American cereals (including such brands as Frosted Flakes, Raisin Bran, and Froot Loops); plant-based foods anchored by its MorningStar Farms brand; and global snacks, which represent the lion's share of the Kellogg's portfolio and includes cereals sold internationally, frozen breakfast brands like Eggos, noodles, and snacks such as Pringles chips and Cheez-It crackers.
Kellogg noted on Tuesday that its board has OKed the move, which will likely be wrapped up by the end of 2023. The North American cereal and plant-based businesses will remain in Battle Creek, Mich., the current Kellogg's headquarters, while the global snacks arm—which made up about 80% of the company's sales last year—will be based in Chicago, though it will retain an office in Battle Creek. "These businesses all have significant stand-alone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities," Kellogg CEO Steve Cahillane said in a statement.
CNBC notes that shares jumped 8% in early trading Tuesday after news of the split broke. Names for the new businesses haven't yet been confirmed, nor have the management teams, though Cahillane is set to head up the global snacks business. Other companies that have recently broken off into separate businesses: General Electric, Johnson & Johnson, and Toshiba. "Competition is fierce," SoFi investment strategist Liz Young tells CNN Business. "Sometimes you have to break it down to build it back up." (More Kellogg stories.)
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