Kellogg has announced plans to split up into three separate companies by spinning off its North American cereal and plant-based businesses in hopes of enhancing “performance and value.”
The Michigan-based Kellogg Company said in a statement Tuesday that its board has approved a plan to divide its business into three independent public companies, “each better positioned to unlock their full standalone potential.”
While the names of the new companies are to be determined later, Kellogg noted the following placeholders: “Global Snacking Co.,” “North America Cereal Co.,” and “Plant Co.”
“These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities,” Steve Cahillane, Kellogg Company CEO said in a statement.
“In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth,” he added.
The global snacking firm, with an estimated $11.4 billion in net sales, will focus on snacking, international cereal and noodles, as well as North America frozen breakfast products.
The North America cereal company, with around $2.4 billion in net sales, will concentrate on cereal products for the U.S., Canadian, and Caribbean markets.
The plant firm, with estimated net sales of some $340 million, will be a “pure-play plant-based” food company, aiming to seize on “strong long-term category prospects” in the market for such products as egg and dairy alternatives and plant-based meat.
A recent analysis by Meticulous Research found that the compound annual growth rate for the plant-based food market is estimated at 12.4 percent from 2022 to 2029, by which time it is projected to be worth $95.52 billion.
“The growth of the global plant-based food market is mainly driven by increasing incidences of animal protein intolerance, growing urbanization with new consumer aspirations, increasing vegan population, and significant venture investments in plant-based food manufacturers,” Meticulous Research said in a statement.
While offering different numbers, other analyses have similarly pointed to growth in the plant-based food market.
Bloomberg Intelligence projected in an analysis last year that, as global demand for protein keeps climbing, the share of plant-based proteins could make up 7.7 percent of the total global protein market by 2030, with a value of over $162 billion.
Kellogg said in its spin-off announcement that it expects the moves to be finalized by 2023, with headquarters locations for the three new firms remaining unchanged.
Shares in Kellogg jumped more than 6 percent in pre-market trading on Tuesday following the announcement.