Kellogg is considering selling their fruit snacks and cookies
The food producer on Monday said it is considering selling its cakes and fruit-snack businesses, including Keebler, Famous Amos and other brands, to focus on products with faster growing sales.
It is the last food to review its product range as American consumers purchase healthier snacks and fresher foods.
J.M. Smucker
Co.
Earlier this year, Pillsbury sold back to a private equity company for $ 375 million, including debt. Nestlé SA sold its American candy business, including the Butterfinger and Baby Ruth brands, to Ferrero International SA for $ 2.8 billion.
Conagra Brands
Inc.
and
General Mills
Inc.
has said that they are planning to dispose of brands that are not the core of their businesses.
And
Campbell soup
Co.
is also looking for a buyer for its international chefs and for a fresh juice and carrot business that did not look seamlessly into its portfolio of canned and packaged products.
Active investors such as Third Point LLC, which have a stake in Nestlé and Campbell, have encouraged these audits. But longstanding food manufacturers are still faced with a challenge in trying to generate robust growth in boxed and hermetic products, which in many cases are not in line with today's consumer power. Some companies, including General Mills Inc. and
Unilever
PLC, the sale of its major brands, recently improved after selling other brands to refine its focus.
Kellogg said it had not prioritized investing in promotion and innovation for brands of cookies and fruit snacks in recent years. Selling them would allow the company to "bring a sharper focus to its core business," said Kellogg in a statement. The businesses for sale have about 900 million dollars in annual sales.
In addition to cereals like Frosted Flakes, Battle Creek, Mich. -Based Kellogg also Pringles, Pop-Tarts, Cheez-Its and other brands.
Grain sales have been a consistent problem for Kellogg in recent years. Kellogg's CEO Steve Cahillane, who joined the company a year ago, struggles to stop selling well-known brands like Special K.
"It's so hard when you have big consumer brands that are not growing or falling return them to growth, "said Cahillane in an interview last month, and noted the progress he has made with grain sales lately.
Mr. Cahillane's focus on single-serve snack packages boosted sales in the third quarter, but damaged profits, Kellogg said on October 31[ads1], and sent shares down 9% that day.
Kellogg bought Keebler Foods Co. for $ 3.86 billion in 2001, tripled its debt burden and put it against Nabisco, whose brands like Oreo and Chips Ahoy have long dominated the cake aisle.
Nabisco, now owned by
Mondelez International
Inc.,
dedicates a lot of money and resources to get dealers to showcase their products prominently and to develop new flavors and variants.
Kellogg also said Monday that it will reorganize its North American device to be more flexible and better allocate resources. The company said it would invest in e-commerce capabilities, consolidate the supply chain and combine more sales teams.
Write to Annie Gasparro at annie.gasparro@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com
