Kellogg Company Outlines Its Strategy for Growth.
"We are determined to achieve new growth in our ready-to-eat cereal business and continue the rapid global expansion of our convenience foods business," said Arnold G. Langbo, chairman of the board and chief executive officer.
Kellogg's strategy includes:
* Leadership in product innovation. Kellogg announced that, early in
1999, it will introduce a new premium line of cereals called Country
Inn Specialties as well as a new fortification program in many of its
cereals called K-SENTIALS(TM). Many more product introductions in both
cereal and convenience foods are planned for later in 1999.
* Strengthening the company's seven largest cereal markets: United
States, United Kingdom, Mexico, Canada, Australia, Germany, and France.
These markets represent 80 percent of Kellogg's global cereal business.
In 1999, the company's cereal marketing investment for these countries
will increase at a double-digit rate.
* Accelerating the growth of its convenience foods business. Kellogg
will focus both on expansion into new markets and increased penetration
of new distribution channels, including single-serve channels such as
convenience stores, gas stations, vending, and foodservice. "Globally,
convenience foods is now more than a $1.6 billion business for Kellogg
Company and we believe it will continue to grow substantially," said
Carlos M. Gutierrez, president and chief operating officer.
* Developing a more focused organization. A recent initiative in
Kellogg's headquarters and North American operations has created a
simplified, focused, and more accountable organization, aligned much
more closely with the company's growth strategy. Sustaining and
continuing to improve this organization is a high priority.
* Continuing to reduce costs. Kellogg expects to save over $150
million in 1999 from initiatives undertaken in 1998. The company also
estimates capital spending to drop from about $400 million in 1998 to
about $270 million in 1999 and about $250 million in 2000. "We are
totally committed to make 1999 the year when our earnings performance
begins a consistent pattern of year-to-year increases," Gutierrez said.
Kellogg Company also announced today the appointment of W. Stephen Perry as vice president -- tax, internal auditing and treasurer of the company, effective January 1, 1999. Perry's responsibilities will include investor relations. He has served as vice president -- taxes since joining the company in January 1997.
Kellogg Company is the world's leading producer of ready-to-eat cereal and a leading producer of other convenience foods, including cereal bars, toaster pastries, frozen waffles, and bagels.