Latest news with #WKKellogg
Yahoo
15-07-2025
- Business
- Yahoo
Analysis-Ferrero poised to revive WK Kellogg sales for health-conscious Americans
By Savyata Mishra (Reuters) -Nutella spread maker Ferrero, armed with experience in health-regulated European markets and a track record of revamping struggling brands like Keebler cookies, has a good chance of reviving WK Kellogg's legacy cereal brands with its $3.1 billion take-private deal announced last week. Ferrero, which makes sugary treats like Kinder chocolate eggs, Ferrero Rocher, and Tic Tac, has pursued an aggressive global expansion to boost revenue and diversify its portfolio beyond sweets into snacks, baked goods, and now breakfast cereals. Under Chairman Giovanni Ferrero, the company has invested heavily in product innovation, reformulation and packaging redesign to turn around some challenged brands it previously acquired such as Keebler from Kellogg. Meanwhile, demand has fallen for products made by WK Kellogg, whose cereals include Special K, Corn Flakes and sweetened offerings such as Froot Loops, Honey Smacks and Frosted Flakes. Consumers have traded down from its pricier cereals even as Kellogg has come under scrutiny for using artificial food dyes. "Ferrero's creativity can help jump-start sales in a sleepy (albeit higher margin) category," said Hank Cardello, executive-in-residence at the Business for Impact center at Georgetown's McDonough School of Business. Ferrero's expertise in cookies and confectionery could help create distinct new versions of cereal products, he added. Ferrero could reinvigorate WK Kellogg's portfolio which also contains healthier options such as Special K and Raisin Bran, touted for their high fiber content, as well as nutrient-rich cereals, granola and waffles under its Kashi brand. "I expect that (Ferrero) will preserve Kellogg brand recognition without too much dilution while also marketing a healthier and more consumer-friendly and appealing product line," Amrita Bhasin, CEO of logistics food and beverage company Sotira, said. In 2018, Ferrero bought Nestle's confectionery business for $2.8 billion, adding brands such as candy bars Butterfinger, Baby Ruth, and 100 Grand to its portfolio. In just a few years, Ferrero relaunched Butterfinger with higher-quality ingredients including peanuts, cocoa and milk and revamped packaging. The steps helped grow demand for the salted caramel bars. In 2019, Ferrero made a $1.3 billion acquisition of Kellogg's cookies, snacks and ice cream business. The Italian company revitalized these products by investing in new packaging and more marketing. In 2023, it also bought Fresystem Group and used the acquisition to grow its frozen food business and launch Nutella muffins and other baked goods. Ferrero declined to comment on the strategy for WK Kellogg. In April, WK Kellogg said it was reformulating its cereals served in schools to not include artificial dyes. Other packaged food makers such as PepsiCo, Kraft Heinz and Hershey have also started working to remove synthetic food dyes from their products, under pressure from U.S. Health Secretary Robert F. Kennedy Jr.'s Make America Healthy Again, or MAHA campaign. Analysts and industry experts noted that Ferrero has spent decades dealing with European regulators that have pushed back on additives, coloring and sugar. This could give the confectionery giant an edge dealing with Kennedy's MAHA campaign, they said. "Ferrero has been a pioneer in marketing smaller portions, which would fit in well with MAHA," Cardello said. For instance, as a founding member of the Always a Treat initiative in 2017, Ferrero committed to ensuring that half of its single-serve packs contain 200 calories or less to help consumers manage their sugar intake. As a private family-owned company, Ferrero is insulated from the pressures of quarterly earnings, giving it more flexibility to invest in long-term brand building and product innovation. Analysts said this could be critical in reshaping WK Kellogg's product lineup over the next few years. Still, MAHA could boost costs for Ferrero as it makes its expansion push in North America. "Ferrero will have to grapple with MAHA requirements across the company, not just in cereal, since much of its business is based on candy and sugary snack foods," said Sky Canaves, an analyst with market research firm Emarketer. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-07-2025
- Business
- Yahoo
Ferrara holding company in talks to buy French confectioner CPK
A holding company behind US group Ferrara Candy Company is eyeing CPK Group, the French confectioner that owns brands including Carambar and Lutti. In a statement on Friday (11 July), Ferrara said its European holding company has entered into 'exclusive discussions' to buy CPK from investment group Eurazeo. Ferrara, while not owned by Ferrero Group, operates as an affiliated entity under the same ultimate control as the Italian giant. The proposed acquisition of CPK will be submitted to relevant employee representative bodies for consultation. It is expected to be finalised in the fourth quarter, contingent on customary closing conditions and regulatory approvals, Ferrara said. CPK was established in 2017 following Eurazeo's acquisition of 14 brands from Mondelez International. A year later, CPK snapped up French confectioner Lamy Lutti. The group, which employs more than 900 staff, has a product range that also includes Krema, Michoko and Terry's. It has four manufacturing facilities in France, all of which would be acquired by Ferrara's holding company if the deal is approved, the statement read. Ferrara, which has a presence in more than 40 countries, is behind US confectionery brands such as Brach's, Nerds and Trolli. According to Ferrara, the deal would combine 'CPK's strong position in the European confectionary market with Ferrara Candy Company's broad portfolio of sugar confections". Two years ago, Ferrara announced two acquisitions in three months. In October 2023, the company bought US confectioner Jelly Belly Candy Company. In July that year, Ferrara acquired Brazilian snacks business Dori Alimentos through CTH, described as 'the lead holding company of Ferrara'. Last week, Ferrero confirmed it had struck a deal to buy US-based breakfast cereals business WK Kellogg for $3.1bn. The Ferrero Rocher and Nutella maker said the transaction covers WK Kellogg's brands in the US, Canada and the Caribbean such as Froot Loops, Special K, Rice Krispies and Raisin Bran. WK Kellogg was spun-off from the parent Kellogg in 2023 as the business split in two to create separate independent public companies. The other half of Kellogg – Kellanova, focused on the rest of the global cereals business outside North America, snacks such as Pringles crisps and frozen breakfast foods – is in the throes of a $36bn takeover by privately owned confectioner Mars, inked last August. "Ferrara holding company in talks to buy French confectioner CPK" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Business Times
12-07-2025
- Business
- Business Times
Kraft Heinz explores grocery business spinoff worth up to US$20 billion: source
[Bengaluru] Kraft Heinz is studying a potential spinoff of a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as US$20 billion on its own, a source familiar with the matter said on Friday (Jul 11). However, the structure of the deal could change and there is no guarantee Kraft Heinz would move forward with any such deal, the source said. News of the potential move is the second effort this week by a storied US company looking to shore up shareholder value as shoppers ditch their pricey products in an uncertain economy. Earlier this week, cereal maker WK Kellogg agreed to a US$3.1 billion buyout deal from Italy's Ferrero. The Wall Street Journal first reported the development earlier in the day. According to the report, a split, which would leave the company with products such as its namesake Heinz ketchup and Dijon mustard brand Grey Poupon, could be finalised in the coming weeks. 'As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,' a company spokesperson said. Its shares closed up 2.5 per cent. The company currently has a market value of US$31.3 billion. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Kraft Heinz was formed in 2015 after Warren Buffett's Berkshire Hathaway and Brazilian private equity firm 3G Capital combined the former Kraft Foods with HJ Heinz, which they bought in 2013. But it has been a challenging investment for Berkshire. Inflationary pressures and a shift in focus towards fresher, less processed food have hurt demand for Kraft Heinz's lunch combos and other products. It lowered annual forecasts and reported a dour quarter in April, hurt by muted consumer spending. Kraft Heinz also said last month it would stop the launch of new products with artificial colours in the US after Health Secretary Robert Kennedy Jr outlined plans to remove synthetic food dyes from the US food supply to address chronic diseases and conditions. '(Kraft Heinz) spinning off its grocery business echoes the 2023 Kellogg spinoff in which the company spun off its cereal business, which had been in volumetric decline for some time,' said Connor Rattigan, analyst at Consumer Edge. 'As CPGs (consumer packaged goods makers) contend with both changing consumer preferences and a challenging consumer environment, other CPGs may look to mergers and acquisitions or similar corporate actions to improve their category exposures and improve their top-line trajectory,' Rattigan said. REUTERS
Hamilton Spectator
11-07-2025
- Business
- Hamilton Spectator
Breakfast cereal sales declined for decades before Kellogg's sale to Italian company
Breakfast cereal could use a lucky charm. U.S. sales of the colorfully packaged morning staple have been in a decades-long decline , a trend back in the spotlight with news that Italian confectioner Ferrero Group plans to purchase WK Kellogg, maker of Corn Flakes, Froot Loops, Rice Krispies and other familiar brands. Except for a brief period during the coronavirus pandemic, when many workers were home and had time to sit down with a bowl of cereal and milk, sales of cold cereal have steadily fallen for at least 25 years, experts say. In the 52 weeks ending July 3, 2021, Americans bought nearly 2.5 billion boxes of cereal, according to market research company Nielsen IQ. In the same period this year, the number was down more than 13% to 2.1 billion. Cereal has been struggling for multiple reasons. The rise of more portable options like Nutri-Grain bars and Clif Bars – which both went on sale in the early 1990s – made it easier for consumers to grab breakfast on the go. Concerns about food processing and sugar intake have also dimmed some consumers' enthusiasm for cereals. One cup of Lucky Charms contains 24% of a consumer's daily recommended intake of sugar, for example. 'Cereal finds it really hard to get out from underneath that,' said Tom Rees, global insight manager for staple foods at the consulting company Euromonitor. 'It can't escape the fact that it doesn't look like a natural food. You have to create it and form it.' Rees noted that for decades, cereal manufacturers focused on adding vitamins and minerals to build cereal's health credentials. But consumers now are looking for simplified ingredient lists. Artificial dyes — like the petroleum-based colors that brighten Froot Loops — have also come under fire. Last fall, dozens of people rallied outside WK Kellogg's Battle Creek, Michigan, headquarters demanding that it remove artificial dyes from its cereals. Kellogg and General Mills — another major U.S. cereal maker — have since pledged to phase out artificial dyes . Add to that, consumers are expanding their idea of what breakfast can be. Yogurt and shakes have replaced the traditional bacon and eggs. Kenton Barello, a vice president at the market research firm YouGov, said his polling shows that Generation Z consumers, who were born between 1997 and 2007, eat more vegetables for breakfast than other generations. Barello said YouGov's polling also shows that members of Gen Z are less likely to eat breakfast but still buy ready-to-eat cereal, suggesting they're eating it as a snack or for other meals. 'With younger generations, there are differences in their relationship with food and these eating moments,' Barello said. 'They are going about breakfast in a different way than Millennials, Gen X and Baby Boomers.' Cereal's struggles are part of what led to the breakup of the Kellogg Company . In 2023, the century-old company that put Battle Creek, Michigan, on the map split into two companies. Kellanova took popular snack brands like Cheez-Its, Pringles and Pop-Tarts as well as international cereals, and WK Kellogg made cereals for the U.S., Canada and the Caribbean. In 2024, M&M's maker Mars Inc. announced a plan to buy Kellanova for more than $30 billion. That plan has cleared U.S. regulators but is still awaiting regulatory approval in Europe. WK Kellogg was left to try to rejuvenate the cereal business. The sale of WK Kellogg to Ferrero doesn't mean supermarket cereal aisles are at risk of extinction. Packaged food companies have options for turning around their soggy cereal sales, Rees said. He thinks Kellogg's Mashups line, which mixed brands like Frosted Flakes and Froot Loops into one box, appeal to younger consumers, who tend to like interesting flavor combinations. The market may also have a fragmented future, according to Rees. Companies may have to accept that younger buyers want a sweet-and-spicy cereal while older buyers might want a Keto-friendly option. 'The future might be realizing that the era of 'This brand will serve everybody' isn't going to happen,' Rees said. Julia Mills, a food analyst with the consulting company Mintel, thinks the shrinking population of children in the U.S. gives cereal makers the opportunity to shift to more sophisticated flavors and packaging. Cereal could be positioned as a fancy topping for yogurt, for example, or a fiber-rich food that can improve gut health. Some niche cereal brands, like high-fiber Poop Like a Champion cereal and high-protein, zero-sugar Magic Spoon, are already doing that. But legacy brands say they shouldn't be counted out. Jeffrey Harmening, the chairman and chief executive officer of Cheerios maker General Mills, said his company considered trying to acquire Magic Spoon. Instead, it made high-protein versions of Cheerios, which now outsells Magic Spoon. 'The key to longer term is, honestly, is giving consumers more of what they want,' Harmening said during a conference call with investors in March.
Winnipeg Free Press
11-07-2025
- Business
- Winnipeg Free Press
Breakfast cereal sales declined for decades before Kellogg's sale to Italian company
Breakfast cereal could use a lucky charm. U.S. sales of the colorfully packaged morning staple have been in a decades-long decline, a trend back in the spotlight with news that Italian confectioner Ferrero Group plans to purchase WK Kellogg, maker of Corn Flakes, Froot Loops, Rice Krispies and other familiar brands. Except for a brief period during the coronavirus pandemic, when many workers were home and had time to sit down with a bowl of cereal and milk, sales of cold cereal have steadily fallen for at least 25 years, experts say. In the 52 weeks ending July 3, 2021, Americans bought nearly 2.5 billion boxes of cereal, according to market research company Nielsen IQ. In the same period this year, the number was down more than 13% to 2.1 billion. Cereal has been struggling for multiple reasons. The rise of more portable options like Nutri-Grain bars and Clif Bars – which both went on sale in the early 1990s – made it easier for consumers to grab breakfast on the go. Concerns about food processing and sugar intake have also dimmed some consumers' enthusiasm for cereals. One cup of Lucky Charms contains 24% of a consumer's daily recommended intake of sugar, for example. 'Cereal finds it really hard to get out from underneath that,' said Tom Rees, global insight manager for staple foods at the consulting company Euromonitor. 'It can't escape the fact that it doesn't look like a natural food. You have to create it and form it.' Rees noted that for decades, cereal manufacturers focused on adding vitamins and minerals to build cereal's health credentials. But consumers now are looking for simplified ingredient lists. Artificial dyes — like the petroleum-based colors that brighten Froot Loops — have also come under fire. Last fall, dozens of people rallied outside WK Kellogg's Battle Creek, Michigan, headquarters demanding that it remove artificial dyes from its cereals. Kellogg and General Mills — another major U.S. cereal maker — have since pledged to phase out artificial dyes. Add to that, consumers are expanding their idea of what breakfast can be. Yogurt and shakes have replaced the traditional bacon and eggs. Kenton Barello, a vice president at the market research firm YouGov, said his polling shows that Generation Z consumers, who were born between 1997 and 2007, eat more vegetables for breakfast than other generations. Barello said YouGov's polling also shows that members of Gen Z are less likely to eat breakfast but still buy ready-to-eat cereal, suggesting they're eating it as a snack or for other meals. 'With younger generations, there are differences in their relationship with food and these eating moments,' Barello said. 'They are going about breakfast in a different way than Millennials, Gen X and Baby Boomers.' Cereal's struggles are part of what led to the breakup of the Kellogg Company. In 2023, the century-old company that put Battle Creek, Michigan, on the map split into two companies. Kellanova took popular snack brands like Cheez-Its, Pringles and Pop-Tarts as well as international cereals, and WK Kellogg made cereals for the U.S., Canada and the Caribbean. In 2024, M&M's maker Mars Inc. announced a plan to buy Kellanova for more than $30 billion. That plan has cleared U.S. regulators but is still awaiting regulatory approval in Europe. WK Kellogg was left to try to rejuvenate the cereal business. The sale of WK Kellogg to Ferrero doesn't mean supermarket cereal aisles are at risk of extinction. Packaged food companies have options for turning around their soggy cereal sales, Rees said. He thinks Kellogg's Mashups line, which mixed brands like Frosted Flakes and Froot Loops into one box, appeal to younger consumers, who tend to like interesting flavor combinations. The market may also have a fragmented future, according to Rees. Companies may have to accept that younger buyers want a sweet-and-spicy cereal while older buyers might want a Keto-friendly option. Currently on hiatus A review of funny, uplifting news in Winnipeg and around the globe. 'The future might be realizing that the era of 'This brand will serve everybody' isn't going to happen,' Rees said. Julia Mills, a food analyst with the consulting company Mintel, thinks the shrinking population of children in the U.S. gives cereal makers the opportunity to shift to more sophisticated flavors and packaging. Cereal could be positioned as a fancy topping for yogurt, for example, or a fiber-rich food that can improve gut health. Some niche cereal brands, like high-fiber Poop Like a Champion cereal and high-protein, zero-sugar Magic Spoon, are already doing that. But legacy brands say they shouldn't be counted out. Jeffrey Harmening, the chairman and chief executive officer of Cheerios maker General Mills, said his company considered trying to acquire Magic Spoon. Instead, it made high-protein versions of Cheerios, which now outsells Magic Spoon. 'The key to longer term is, honestly, is giving consumers more of what they want,' Harmening said during a conference call with investors in March.
