Kellogg ringing the changes – executive vice president resigns, replaced by David Mackay; company steadily loses market share – Brief Article

Kellogg ringing the changes – executive vice president resigns, replaced by David Mackay; company steadily loses market share – Brief Article – Statistical Data Included

It’s all change at US breakfast cereal group Kellogg, again. The company has just announced that executive vice president John Cook, who is also president of Kellogg North America, has resigned after only 18 months in the job. He is stepping down to pursue other business interests. Carlos Guttierrez, Kellogg chairman and CEO, announced that David Mackay will replace Cook as president of Kellogg USA.

In a related announcement, Guttierrez also said that Kellogg Canada, formerly part of Kellogg North America, will now be now part of Kellogg Europe and report directly to Alan Harris, president of Kellogg Europe. Gutierrez added he would not be immediately naming a replacement for the position of Kellogg North America. About 60% of Kellogg’s US$6.98bn (7.44bn [European Dollar]) in annual sales comes from the US and Guttierrez said he will be devoting more of his time to running the US business.

LOSING MARKET SHARE

Kellogg has been steadily losing market share to General Mills and cheaper store-brand products over the last decade. General Mills has recently knocked Kellogg off the number one spot according to the latest figures with a 31.2% share of the US cereal market, compared to Kellogg’s 31.1% (see Eurofood, 11 May 2000, p6). Kellogg’s climb back remains a work in process. New marketing ideas include several reward programmes where cereal eaters can exchange tokens for toys, sporting goods and school supplies. However, Kellogg has a long way to go before it catches its rivals. General Mills uses nutrition and health news wherever possible: “Name your health benefit and the cereal is a terrific carrier,” says Kris Wenker, a General Mills spokeswoman.

NEW LINE OF CONVENIENCE FOODS

Kellogg hopes its convenience foods, such as Rice Krispies treats and Nutri-Grain bars, can revive its fortunes. The cereal giant showed it was serious about the niche in November, closing a US$307m deal to buy Worthington Foods, a maker of soy protein based meat alternatives, and other products (see Eurofood, 21 October 1999, p9). Backed by Kellogg’s marketing clout, Worthington’s sales climbed by 19% last quarter.

COPYRIGHT 2000 Agra Europe Ltd.

COPYRIGHT 2001 Gale Group