Goodbye Kellogg’s: The maker of Special K, Corn Flakes and Nutri-Grain has a new name

The Australian arm of cereal behemoth Kellogg’s will go by the new name of “Kellanova” from Tuesday and will push hard into the snacks sector as it pursues growth in the local market by launching new on-the-go products.

Not that you would ever know it: all your favourite cereals, including Coco Pops, Crunchy Nut and Sultana Bran, will retain the iconic Kellogg’s logo.

Kellogg’s (now Kellanova) Australia managing director Anthony Holme.

“It means very little to Australian consumers in terms of change right now,” said Kellanova managing director Anthony Holme. “It means much more choice for Australian consumers in the future as we bring the global snacking opportunities and local snacking opportunities into Australia.”

The new name is the result of a decision by Kellogg’s US headquarters, announced last year, to split the $31.3 billion giant into two companies.

WK Kellogg Co, its North American cereals business, will focus on its core cereal portfolio, which includes Frosted Flakes, Froot Loops, Special K, Rice Krispies and more. Meanwhile, Kellanova will become a “global snacking powerhouse” and fold in brands such as LCMs, K-Time bars, Pop Tarts and more.

Holme said that in the transition to Kellanova, the business would focus more on product innovation and convenience.

“Many more people are eating on the go,” he said. “People are moving through the day faster. They don’t necessarily want the same format of food ... and we need to answer to that.”

The company declined to provide growth or revenue figures but said the overall business had “high double-digit growth” this year, while its cereal division had “high single-digit growth”. Figures provided by IBISWorld put Kellogg’s Australia’s total revenue at $475.3 million and net profit at $34.6 million in 2022.

Kellanova is the larger of the two entities, with net sales projected at around $US13.5 billion ($21 billion) in 2024 compared with $US2.33 billion projected for WK Kellogg Co, named after founder William Keith Kellogg. Kellanova’s growth trajectory (9 per cent on an annualised rate between 2019-22) also far outpaces that of its cereal counterpart (1 per cent).

“International markets have a very different need to the US, for example, and cereal in the US – I’m not an expert in that – it’s a very different business to snacks,” Holme said.

Sultana Bran, one of Kellogg’s’ products.Credit: Dominic Lorrimer

“It allows ruthless focus from a strategy point of view, as opposed to divergent focus.”

The rebranding will also mark a new start for employees of its head office, which will move from eastern Sydney’s Pagewood to the inner-city suburb of Eveleigh. The new strategic direction has also prompted Holme’s eagerness to establish a new workplace culture that will celebrate its 100th anniversary next year.

“Impulse occasions are very different to formal sit-down meal occasions, and the way that you take it to market, whilst appears the same, creates a much more entrepreneurial and much more focused growth mindset.”

Holme will take lessons from the growth in Pringles, which has nearly doubled since Kellogg’s acquired the stackable chips brand in 2012, and apply the template to other brands. Kellanova will also look at introducing brands in its global portfolio that aren’t yet in Australia, which include Cheez-Its, Rice Krispie treats, RXBAR, Eggo, and plant-based brands Incogmeato and Gardenburger.

“We set up a separate Pringles business unit, which wasn’t under the rest of the business ... I just gave them a brief to double their business, and that’s your KPI,” he said. “So [we’ll see] more of that.”

While the two companies will ostensibly focus on their respective markets and strategies, the door has been left open for the two to compete with one another.

“We would expect to have short-term, geographically limited, non-compete agreements after the spin occurs,” states the website set up by Kellogg’s to explain the company split.

Retail data analytics firm ShopGrok chief Aaron Cowper said shareholders were likely better served by splitting Kellogg’s portfolio into two businesses.

“The traditional cereal business would likely be slower growth but higher profitability and probably pay high dividends, so it would be more traditional investors, super funds and the like who just want more consistency,” said Cowper.

“Whereas a growth business is snacking, so higher risk tolerance, high return investors who are wanting to see growth and increase in share price over time.”

In the past 12 months, the number of products in the snacking category sold in Australia’s major supermarkets has risen from 3100 to more than 4000, or by 29 per cent, according to ShopGrok data. Meanwhile, the number of snacking brands has risen from 105 to 140, a 41 per cent increase.

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