Latest news with #cereals
Bloomberg
18-07-2025
- Business
- Bloomberg
Froot Loops, Apple Jacks to Cut Synthetic Dyes by End of 2027
WK Kellogg Co. will remove synthetic dyes from its cereals, including Froot Loops and Apple Jacks, by the end of 2027, joining a growing cohort of other US companies that have committed to eliminate colorants such as Red 40 and Yellow 5 from their foods. The Battle Creek, Michigan-based company said it would remove the additives on its website on Friday. It had previously announced that it wouldn't introduce new products with the dyes beginning in 2026 while also committing to eliminate the ingredients from its cereals served in schools by the 2026-2027 school year.
Reuters
15-07-2025
- Business
- Reuters
Ferrero poised to revive WK Kellogg sales for health-conscious Americans
July 15 (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 (KLG.N), opens new tab 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 (KLG.N), opens new tab, 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, opens new tab it was reformulating its cereals served in schools to not include artificial dyes. Other packaged food makers such as PepsiCo (PEP.O), opens new tab, Kraft Heinz (KHC.O), opens new tab and Hershey (HSY.N), opens new tab 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.
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.
New York Times
10-07-2025
- Business
- New York Times
Ferrero to Buy WK Kellogg in Candy-Meets-Cereal Deal
Ferrero, the Italian candy maker, has agreed to acquire WK Kellogg, the American cereal giant, in a deal valued at $3.1 billion, the companies announced on Thursday. The takeover would combine Ferrero, a family-owned company that makes Tic Tacs, Ferrero Rocher candies and Nutella spreads, with the producer of Frosted Flakes, Froot Loops, Rice Krispies and other cereals. It represents Ferrero's latest push to grow its business in North America. Shares of WK Kellogg surged 30 percent in early trading, rising to just below the acquisition price agreed by the companies. Merger activity in the food sector has been slow this year as President Trump's volatile trade policy has created uncertainty for company executives and unsettled consumers, according to the investment banking firm Capstone Partners. Shoppers, faced with nearly two years of significant price increases for cereals, snacks and other foods at grocery stores have either cut back or switched to less expensive, private-label store brands. WK Kellogg reported a slump in sales in its first quarter this year because of the 'weaker than expected consumption trends.' The company said that sales for the full year would be lower than previously expected, falling as much as 3 percent. The combination with Ferrero would give WK Kellogg 'greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market,' Gary Pilnick, chief executive of WK Kellogg, said in a statement. WK Kellogg was created in 2023 when Kellogg Company spun it off into an independent company. The larger remaining business, which focused on snacks like Pringles and Cheez-It, was renamed Kellanova. Mars, the company behind M&M's and Snickers, agreed last year to acquire Kellanova in a deal valued at $35.9 billion. Last month, the Federal Trade Commission approved that deal — a signal that the Trump administration's antitrust regulators might take a less aggressive approach to merger enforcement than their Biden administration predecessors. The Kellanova deal is still facing antitrust review in Europe. Ferrero's deal for WK Kellogg is 'relatively small,' meaning it is less likely to face significant regulatory hurdles, said Philip Howard, a professor at Michigan State University, who studies concentration in the food system. 'Since Ferrero is dominant in candy but not breakfast cereal, it probably won't be challenged by regulators in the U.S. or E.U.,' he added.
