Kellogg Company Looks To Sell Keebler, Famous Amos Cookie Brands

In an effort to focus on its core product family, Kellogg Company (K) has put its cookie and fruit snack businesses up for sale. The announcement by the company is part of an effort to realign its North American business model to drive future growth in the market.

Kellogg said it will start exploring the process of selling its Keebler, Famous Amos, and Mother's and Murray cookie brands as well as its Stretch Island fruit snack brand.

“We need to make strategic choices about our business and these brands have had difficulty competing for resources and investments within our portfolio,” Steve Cahillane, Kellogg company chairman and CEO, said in a statement. “Yet, we wholeheartedly believe these iconic and beloved brands can thrive in the portfolio of another organization that can focus on driving growth in these particular categories.”

The sale of the cookie and fruit snack business is just one effort that Kellogg is making in North America to become more profitable. Starting in January 2019, the company will revamp its organizational structure in an attempt to gain share of its core product markets. This is an initiative that Kellogg hopes will provide “top-line growth” for the company.

The structural changes at Kellogg are expected to make the company nimbler as it consolidates its morning foods, snacks, and frozen food businesses into single product categories. These food lines make up a total of 80 percent of Kellogg’s revenue in the U.S., according to the company.

Kellogg is also placing a new emphasis on e-commerce as Chris Hood, Kellogg North American president said in a statement, “Successfully achieving our Deploy for Growth Strategy in KNA requires that we grow our business through strong commercial ideas and innovation, prioritized investment choices, excellence in execution and increased speed-to-market. We are confident the changes we are putting in place will help us achieve these objectives.”

Kellogg will also reorganize its sales teams in the U.S. to provide greater customer focus. It is combining it morning foods, snacks, and frozen categories into a single sales organization that will provide greater customer engagement for its retail channels.

The company has also announced supply chain changes in North America by consolidating its procurement, manufacturing, logistics, and customer service processes. Kellogg expects these changes to drive company growth while increasing its capabilities in the region.

“Kellogg Company's Deploy for Growth Strategy, announced earlier this year, calls for the company to sharpen our focus and align our resources around our biggest opportunities to grow our top line and return to long-term sustainable growth,” Cahillane said. “Ultimately, we believe these changes will make Kellogg more agile and better focused on growing demand for our foods.”

The changes that Kellogg is making in North America are the last in its Project K restructuring program. Previously, the company announced that it would undergo ongoing savings and up-front costs as part of the program. The Project K program is a five-year project Kellogg has introduced to increase its revenue and profits long-term.

As of this morning, Kellogg stock prices were down over 1 percent.