Kellogg abandons plans to sell off its plant-based brands
The stock of the michigan-based company increased by nearly 2% as it benefited from persistent demands for its cereals and snacks despite repeated price increases.
kellogg abandons plans to sell off its plant-based brands in reaction to a market shift that has an impact on the sales of plant-based foods.
Kellogg abandons plans to sell off its plant-based brands
The MorningStar Farms unit’s separation from the Pringles manufacturer was revealed last year in june 2022. The proposal called for the creation of three distinct business divisions and the spinoff of the plant-based foods segment.
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However, according to Food Dive, the company, which owns the meat substitute brand MorningStar Farms, reported a 12% overall increase in sales compared to the same quarter last year, as well as 15.6% price increases for Kellogg products in its fourth-quarter results, which were released on the 9th of February 2023. and declared that the plant-based spin was no longer planned.
Reuters mentioned,”Like other plant-based manufacturers, Kellogg’s plant-based business has seen a slowdown during the past year. Steve Cahillane, chairman and CEO of Kellogg, anticipated further losses for the sector in the near future. Callihane told Bloomberg that the anticipated consumer switch from regular meat to “meat mimics” simply hasn’t happened and might never do. Due to the likelihood It might be difficult to find a new buyer to discharge the company’s investment in plant-based goods “Arun Sundaram, a CFRA analyst, said.
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The original intent behind Kellogg’s decision to divide into three firms was to promote growth for each. Kellogg even made a statement at the time that it would explore selling its plant-based company in the future. The company’s remaining activities were to concentrate on its global snacking assets, as well as its global operations for cereal and noodles and its frozen breakfast businesses in North America.
Kellogg currently intends to reduce production of the fresh, chilled Incogmeato line and improve the frozen MorningStar Farms products, which have demonstrated stronger profitability which “accounts for 2% of net sales and has great long-term growth potential,” rather than selling the division.
