The Huge Announcement Kellogg Just Made About The Company's Future

Our pantries might be full of its products, but we probably don't know too much about Kellogg's as a company, which was founded in 1900 by two brothers, W.K. Kellogg and Dr. John H. Kellogg, who created a way to process grain into crunchy flakes which became popular at Dr. Kellogg's medical facility (per Britannica). It was known as the Sanitas Food Company in the beginning but changed its name to the Battle Creek Toasted Corn Flake Company before it became known as Kellogg's in 1922.

The company didn't actually start branching out from the business of making cereal until much later. In 1969, it bought Salada Foods, an acquisition that brought beverages and sweets into the company's product line. Kellogg's then picked up a few other companies that introduced food products into its stable like soups, sauces, and frozen foods. By 2001, Kellogg's had product lines that came with its purchase of Keebler Foods, including cereal, granola bars, cookies, and crackers. 

Now, per a press release, the company says it's ready to make a change — one which Kellogg's CEO and chairman Steve Cahillane says "is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth."

The Kellogg Company says it will break up into three distinct and independent companies, by spinning off its U.S., Canadian, and Caribbean cereal and plant-based business, which currently has $2.4 billion in sales. It will be deemed the "North America Cereal Company" and will handle the Froot Loops, Special K, and Rice Krispies brands (via CNBC).

The second entity, which boasts $11.4 billion in sales and product lines and encompasses brands including Pringles, Cheez-It, Pop-Tarts, RX BAR, and Eggo, will be known as the "Global Snacking Company," which The Wall Street Journal expects to be the biggest slice of the Kellogg's pie, especially since it's also expected to move into new markets. 

The third entity will focus on plant-based food products using its MorningStar Farms brand as an anchor, and will be known as "Plant Co."

The new companies' names might not sound too exciting or on-brand at the moment, but they are temporary and permanent names will be announced later.

In the statement announcing the spinoffs, Cahillane explained that the three businesses would "all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities."