Kellogg’s snack business to become as big as cereals
Kellogg UK has announced plans to more than triple the size of its snacks arm.
“Our strategy is based on internal and external growth,” said head of snacks Jean-Yves Heude. “From now on everybody needs to understand that Kellogg is a food business with two major components: one is cereal, but the other is snacks.
"Internally we have a very strong claim that snacks is 15% of our present, but 50% of our future. Every year when we grow, 50% should come from cereal and 50% from snacks and in the longer term we see snacks as big as cereals.”
He admitted that it seemed an “enormous” step to take, but explained that it would resemble Kellogg’s business in the US.
With regard to external growth, he claimed the company was particularly keen to look at smaller firms: “We may do the same as in the US where we acquired Kashi”. Kellogg bought the small muesli business over 10 years ago when the site generated sales of $25M. It has since become a $300M business.
When buying a company, Heude said that products weren’t the key focus, because most things could be imitated, so finding a successful brand was Kellogg’s main priority. “We want to bring what experience we can to leverage the firm, but we need to keep the original team and the business story,” he said.
“When you buy a company, you look at the value of the brand, and also what you can do with it. When we first approach companies, they are scared and think ‘why me?’ but we explain to them that they’re doing a good job and use Kashi as an example of how they could fit into the business.”
Internally, he said that innovation was key to the company’s growth strategy. “We need to move away from a simple cereal business to a real snack business. So far our products have been mainly bars; now we are developing a new generation of products.”
Heude said that the company would be focussing on sweet snacks after the launch of savoury products a few years ago failed to take off. The company has recently launched Special K Mini Breaks - a bagged snack containing biscuity oat bites.
