Kellanova: Kellogg's Australian Arm Reinvents Itself as a Global Snacking Powerhouse
Kellogg's Australia, the maker of popular cereals like Special K, Corn Flakes, and Nutri-Grain, will now operate under the new name "Kellanova." This rebranding is part of Kellogg's decision to split its $31.3 billion giant into two companies.
Focus on Snacks
Kellanova will shift its focus towards the snacks sector and introduce new on-the-go products. The company aims to bring global snacking opportunities to Australia, providing consumers with more choices in the future.
Minimal Change for Consumers
Despite the name change, Australian consumers will continue to find their favorite cereals, such as Coco Pops, Crunchy Nut, and Sultana Bran, with the iconic Kellogg's logo. The transition to Kellanova primarily signifies a strategic shift in the company's future offerings.
Product Innovation and Convenience
Kellanova plans to prioritize product innovation and convenience to cater to the changing needs of consumers. With more people eating on the go and seeking diverse food formats, the company aims to meet these demands through new and convenient snack options.
Growth and Revenue
While specific growth and revenue figures were not disclosed, Kellanova reported "high double-digit growth" for its overall business and "high single-digit growth" for its cereal division this year. Kellogg's Australia's total revenue for 2022 was approximately $475.3 million, with a net profit of $34.6 million.
Kellanova's Size and Growth Trajectory
As the larger entity of the two resulting companies, Kellanova is projected to achieve net sales of around $US13.5 billion ($21 billion) in 2024. Its annualized growth rate between 2019-22 is expected to be 9 percent, significantly higher than its cereal counterpart's 1 percent growth.
Differentiating Snacks and Cereal
Kellanova's rebranding reflects the recognition that the snack business has distinct needs and strategies compared to the cereal market. This separation allows for a more focused approach and tailored strategies for each business segment.
New Workplace Culture and Location
The rebranding also marks a new beginning for Kellanova's employees. The company's head office will move from Pagewood to Eveleigh, fostering a new workplace culture as Kellanova approaches its 100th anniversary next year.
Learning from Pringles' Success
Kellanova plans to apply the growth strategies implemented for Pringles, a brand that nearly doubled since being acquired by Kellogg's in 2012, to other brands within its portfolio. This approach includes introducing globally successful brands to the Australian market.
Competition and Market Outlook
While the two companies, Kellanova and WK Kellogg Co, will focus on their respective markets and strategies, there is potential for short-term, geographically limited, non-compete agreements. The snacking sector in Australia has experienced significant growth, with an increase in both the number of products and brands available.
The rebranding of Kellogg's Australia as Kellanova signifies a strategic shift towards the snacks sector, paving the way for innovative on-the-go products and a stronger presence in the global snacking market.
