Analysis

Kellogg Co in Staples (World)
March 2022
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Contents
Introduction
State of play
Exposure to future growth
Competitive positioning
Breakfast cereals
Baked goods
Processed meat, seafood and alternatives to meat
Key findings
Appendix
Introduction
INTRODUCTION 55
Scope
Kellogg’s Co is a multinational food
manufacturing company, based in the US.
Whilst the company’s core breakfast cereal
portfolio has meant that the Kellogg’s brand is
leading in many countries globally; the
company’s remaining categories are mainly
present in the US. Thus, there is a focus on
regaining lost share within the US due to
ongoing labour strikes, as well as looking to
emerging markets for their growth potential
as rising incomes give rise to an increased
consumer base.
Disclaimer
Much of the information in this briefing is of a
statistical nature and, while every attempt has
been made to ensure accuracy and reliability,
Euromonitor International cannot be held
responsible for omissions or errors.
Figures in tables and analyses are calculated from
unrounded data and may not sum. Analyses found
in the briefings may not totally reflect the
companies’ opinions, reader discretion is advised.
INTRODUCTION 66
Executive summary
Kellogg is the second largest player in staple foods behind Grupo Bimbo SAB in 2021. The
company experienced a slight decline in sales overall in 2021 due to a dip in sales in its leading
Slowing sales
breakfast cereals category, which forms the largest share of its staples sales. This is due to
consumers resuming their pre-COVID-19 lifestyles and leaving the home more.
Kellogg has faced logistical struggles in 2021 with developments in its core North American
market impacting the company’s global operating profit negatively. The country is still feeling
Labour dispute impacts sales the impact of the COVID-19 pandemic in terms of high inflation, supply chain bottlenecks and
shortages. In addition, the cereal industry was impacted by a 12-week-long labour strike over
wages, resulting in declines in this core market within staples.
Kellogg Europe has undertaken a new “Wellbeing Manifesto” which aims to aid people and the
planet by reducing its carbon footprint by upgrading packaging, reducing sugar and salt in its
Wellbeing Manifesto cereals by 10% and 20%, respectively; and pledging to feed more than 30 million people in
need.
Kellogg is leveraging the strength of its existing brands such as Special K and Nutri Grain which
already have a healthier image; and is focusing on innovating these brands in terms of
Leverage health and existing
additional fortification, sugar reduction and “Mash Ups”. The company is merging brands in
strong brands
terms of flavour profiles and working with crossover products, extending from one category
into another in order to meet consumer needs for health and convenience.
State of play
STATE OF PLAY 88
Top companies at a glance
STATE OF PLAY 99
Kellogg’s global footprint
STATE OF PLAY 10
10
Company overview
Kellogg Co ranks in second position within staples globally,
maintaining its retail value share of 1% in 2021.
With global retail value sales of USD9,914 million in 2021, the bulk
of the US company’s sales are contributed by its domestic sales,
despite its presence in 180 countries. The company has
manufacturing plants in 18 countries.
Breakfast cereals is the biggest category for the company, and in
particular RTE cereals, with its leading brands being Special K and
Corn Flakes.
The company also has a strong presence in pastries and frozen
baked goods due to the strength of its Pop Tarts and Eggo waffles
brands in the US. While some brands can translate easily globally,
these brands exist almost solely in the US due to the difference in
consumer breakfast tastes, resulting in the large sales in this region.
Morningstar Farms, a division of Kellogg Co, gives the company a
growing and leading presence in the increasingly popular meat
alternatives category. This is another category that is solely present
in the US, contributing to the country’s dominance in Kellogg Co’s
total sales turnover.
STATE OF PLAY 11
11
Resumption of pre-pandemic lifestyles results in declines in core categories

While categories such as breakfast cereals and frozen baked goods
and pastries, all saw a big increase in sales during the COVID-19-
induced lockdown period; these categories are all declining as
consumers are resuming their previous habits and leaving their
homes more. While the lockdown period fostered a time of
indulgence and enabled consumers more time for food preparation,
now that consumers are venturing out more, the focus returns to
convenience. Conversely to the indulgence and comfort trend,
prevalent while isolating at home; there continues to be a health
trend, to the detriment of the growth of pastries and frozen baked
goods. Kellogg Co has also declined in share in both breakfast
cereals and in baked goods.
While meat alternatives meet consumer demand for health, the
taste profile and the high price point mean that the category is not
showing the same high growth that it initially did as a result of
many new entrants and curious consumers trying the products for
the first, and sometimes only time. While this is considered a
growth category for the company, Kellogg Co has lost share overall
to Impossible Foods in 2021.
Kellogg Co has not undertaken any merger and acquisition activity
in 2021. The most recent divestment was the sale of Keebler, the
company’s cookie portfolio, to the Ferrero Group in 2019.
Exposure to future growth
EXPOSURE TO FUTURE GROWTH 13
13
Future growth to come through core US market

In terms of staples, breakfast cereals plays the
most important part in future growth areas for
the company. While the bulk of the sales growth
is through the US, there are also strong
opportunities to be had in India and to a lesser
extent Mexico.
Growth opportunities exist for Kellogg Co’s
breakfast cereals brands with a health focus, in
keeping with the company’s “Wellness
Manifesto”. By reducing sugar and salt content
and focusing on health offerings such as being
gluten free, high in fibre, high in protein or
organic; the company can boost its sales over
the forecast period.
While the US gives the company strong
opportunity for future growth in pastries, this is
restricted to the US, with no other country
showing this opportunity. While some of this
growth may be due to inflationary price hikes, it
can also be attributed to innovation, particularly
for the Eggo frozen baked goods brand.
EEXPOSURE TO FUTURE GROWTH 14
14
Kellogg Co retains its strong overall position in 2021
Competitive positioning
COMPETITIVE POSITIONING 16
16
Smaller regional players take share from big brands within staples
While considering that breakfast cereals is
Kellogg Co’s biggest portfolio, PepsiCo Inc
would be the companies biggest
competitor. The breakfast cereals category
is dwarfed by baked goods due to the
sheer size of the bread market. Thus, when
looking at staples overall Grupo Bimbo SAB
de CV, a Mexico-based company with a
dominant presence in baked goods due to
its bread brands; commands more market
share. While Grupo Bimbo and Yamazaki
Baking grew their share in 2021, the
remaining top 10 companies in staple
foods, including Kellogg co, have all lost
share overall in 2021. This is due to the
large size of the bread category, which
alone is more than twice the value size of
any other category within staples. The bulk
of global bread sales is unpackaged bread
and these are dominated by small
bakeries, making shares extremely
fragmented in this category.
17
PepsiCo Inc is the most direct competitor due to its strength in breakfast cereals
PepsiCo and General Mills and their respective
leading Quaker and Cheerios brands, are the most
direct competitors to Kellogg Co due to the
strength of these companies within breakfast
cereals; which makes up the core component of
Kellogg Co in terms of sales turnover.
PepsiCo’s Quaker is the leading cereals brand
overall, but the brand leads in the hot cereals
category, which is not Kellogg Co’s main focus -
which is RTE cereals.
The Kellogg’s Special K and Kellogg’s Corn Flakes
brands are leading brands within flakes and the
company is dominant in children’s breakfast
cereals with a number of brands. General Mills’s
Cheerios brand is the leading brand within other
RTE cereals.
Kellogg Co will focus on expanding its offering,
both at the entry level and premium price point
level in the higher growth areas of breakfast
cereals in emerging markets such as Africa and
Latin America.
18
Kellogg is the leading global RTE cereals player, innovating by merging existing strong brands
Source: www.kelloggs.com
19
Kellogg Co’s biggest RTE brand launches healthier fortified Kellogg’s Special K cereal in 2021
Source: www.kelloggs.com
*
Breakfast cereals
BREAKFAST CEREALS 21
21
Breakfast cereals sales show growth potential in emerging markets

Asia Pacific and Middle East and Africa are areas of comparatively
higher growth for the company due to being less mature markets
than the core US and Western European markets. However, while
growth is higher than in mature markets, the company has lost
share in 2021 in all regions.
In the Middle East and Africa, breakfast cereals are considered
expensive for a large number of consumers who will choose local
alternatives to consume for their morning meals. These range from
country to country from a maize meal porridge known as Pap in
South Africa and Matete in Angola to millet-based porridge known
as Koko in Ghana.
In Asia Pacific, Kellogg Co is the leading breakfast cereals player
followed by PepsiCo. While it is showing decline in sales overall,
healthier breakfast cereal brands such as Kellogg’s Granola and
Kellogg’s Nutri Grain have gained share in China, contributing to
sales growth.
While the company has consistently targeted the mid-priced cereals
market, new launches in emerging markets will target the premium
and entry level priced cereal categories.
22
RTE cereals remains Kellogg Co’s core product portfolio globally

Kellogg Co’s breakfast cereals brands are
comprised almost entirely of RTE cereals in
terms of format. However, in India, and to a
far lesser extent the UK and Australia, the
company has a small presence within hot
cereals. In India, the company has a sizeable
presence in hot cereals, with its Kellogg’s
Oats brand being the fourth biggest hot
cereals brand behind Saffola, Quaker and
Horlicks Oats brands. Consumer preference
is for hot or fresh food in India, supporting
the acceptance of oats as breakfast food is
higher than that of flakes in this market.
In the US and the UK, RTE cereals brand
Kellogg’s Special K is also present in a hot
cereals format, and in Australia the Kellogg’s
Be Natural brand is present in hot cereals
and flakes. In Australia, health is a big trend
in cereals, and there is a big push towards
consuming oats due to their health
properties.
23
Kellogg Co focuses on returning its core market to growth over the forecast period
The company will focus on returning its
core US breakfast cereals market to growth
over the forecast period. This country,
which makes up the majority of cereal
sales and is a developed market for the
company, has struggled in the last two
years; due to reduced product capacity
which was exacerbated by the labour
dispute and fire in December 2021. The
company plans to rebuild its product
supplies, focus on brand rebuilding and
returning to growth over the forecast
period.
Growth will also be through emerging
markets such as India due to its growing
population and their growing disposable
income, enabling many to enter into the
packaged breakfast cereals market. Mexico
will show growth due to product
innovation and increased disposable
incomes of the growing consumer market.
Baked goods
BAKED GOODS 25
25
North America remains core market for Kellogg Co’s baked goods brands
While Kellogg Co’s baked goods only have a
significant presence the US, the category is the
second largest contributor to the company’s global
sales behind breakfast cereals.
Kellogg Co’s Pop-Tarts pastry brand and Eggo frozen
baked goods brand both have deep-rooted histories
in their core US market, gaining popularity in the
country in the 1970s. Pop Tarts have been a sweet
and convenient breakfast food since 1964 and
remain popular due to their nostalgic appeal.
Despite the growing health trend, Pop Tarts are
considered so quintessentially American that they
continue to grow in sales in the US. Eggo is a frozen
waffle brand, also a popular breakfast meal in the
US, unlike in many other countries which consider a
waffle to be a dessert. This is a mature market that
saw slight declines in 2021 due to both the labour
dispute as well as the general decline in the
breakfast category in 2021 as consumers resumed
their habits from prior to COVID-19-induced
lockdowns and left their homes more.
BAKED GOODS 26
26
Pop-Tarts is Kellogg Co’s biggest baked goods brand globally

In terms of global baked goods value sales,
the Pop-Tarts pastry brand contributes 25%
more to Kellogg Co’s sales in comparison to
the company’s Eggo brand in 2021. In 2021
Kellogg Co leveraged the popularity of both
brands by introducing an Eggo waffle maple
syrup-flavoured Pop-Tart in its US market.
In terms of other regions, Pop-Tarts are only
sold in the US, Canada, Australia and the UK,
with by far the bulk of sales coming through
the US. In fact, sales through the UK and
Australia are negligible in comparison to the
US, and even Canada’s sales are 10% of the
size of the US in value terms. This is due to
the nature of product and its sweet taste
profile making it difficult to translate to
other countries. The Eggo frozen waffle
brand is also present in Canada and in
Mexico but again sales remain negligible in
comparison to the US.
BAKED GOODS 27
27
Projected baked goods sales

Undoubtably, growth will continue to be through the
US, the core market for Kellogg’s in terms of baked
goods. It is predicted that growth in pastries will
exceed that of frozen baked goods due to the size of
the category and the history of the Pop-Tarts brand.
Secondary to the US, there may be some
opportunity for growth for both these categories in
neighbouring Canada but this will remain small in
comparison. With the growing health trends and the
focus on sugar reduction, this category will not meet
consumer demand for a healthier breakfast choice
unless it focuses on implementing an ingredients
overhaul in terms of salt and sugar reduction or
introduces a “whole grain” or “healthier” Pop-Tart
which may prove less appealing. Instead innovation
is in the form of crossover launches such as the Eggo
Maple Syrup- flavoured Pop-Tart, launched in the US
in April 2021, and Eggo Stuffed Pancakes Bites,
launched at the same time, crossing over into Pop-
Tarts’ field with apple, chocolate and strawberry
flavoured fillings.
Processed meat, seafood and alternatives to
meat
PROCESSED MEAT, SEAFOOD AND ALTERNATIVES TO MEAT 29
29
Kellogg Co focuses on growing US market by innovating meat analogues

MorningStar Farms, a division of Kellogg
Co, is also the brand name of the leading
frozen meat substitutes brand in the US.
The company’s Gardenburger brand holds
fourth position in the US, just ahead of
Beyond Meat, a brand that is showing
great growth with its partnership with
McDonald’s in 2021. However when it
comes to overall meat substitute retail
sales, MorningStar Farms is by far the
market leader.
While a growing flexitarian diet trend
supports growth of meat alternatives, not
all consumers want to forgo the taste of
real meat. In June 2021, Kellogg Co
launched Incogmeato under its
MorningStar Farms range, a new line of
plant-based protein that looks, cooks and
tastes just like meat to target those
consumers who do not like the taste
profile of the existing Black Bean Burger.
30
US is the core market for Kellogg Co’s meat and seafood substitutes
Kellogg Co has chosen to grow its
MorningStar Farms meat substitutes range
in its core market rather than looking to
expand internationally. This is due to meat
substitutes still being a relatively niche
category when looking at meat as a whole,
and growth is stronger in developed
markets where consumers have greater
disposable income to buy the high-priced
plant-based products. In developing
markets meat is still seen as aspirational
and those that can afford to buy and
consume meat will do so.
MorningStar Farms has chosen to further
enhance its appeal to the growing vegan
population by aiming to totally eliminate
the use of animal products (including egg
white) and going fully vegan in 2021. Thus
the brand widens its consumer base and
increases its “better for you” appeal in
terms of both the planet and the consumer.
31
Kellogg Co aims to increase repeat purchases within meat substitutes over forecast period
It is likely that the initial surge of new
launches within the meat alternatives
category over 2019 and 2020 helped boost
sales, but these sales will not be at the
same high rate as the products are not
able to support repeat purchases after
initial trial. The high number of new
entrants and new products typically drives
up initial growth which is not sustainable
long term as some consumers revert back
to their usual shopping habits after their
initial curiosity purchase.
On the whole, consumers still prefer to eat
real meat or vegetables, with the regular
purchase of a meat alternative being
somewhat niche when looking at the
global population. This is due to high price
points and unique taste profiles. Those
that are looking for a plant-based protein
source would choose something natural
and cheaper such as lentils and beans.
Key findings
KEY FINDINGS 33
33
Key findings
Kellogg is the second largest player in staple foods behind Grupo Bimbo SAB in 2021. The
company experienced a slight decline in sales overall in 2021 due to a dip in sales in its leading
Slowing sales
breakfast cereals category, which forms the largest share of its staples sales. This is due to
consumers resuming their pre-COVID-19 lifestyles and leaving the home more.
Kellogg has faced logistical struggles in 2021 with developments in its core North American
market impacting the company’s global operating profit negatively. The country is still feeling
Labour dispute impacts sales the impact of the COVID-19 pandemic in terms of high inflation, supply chain bottlenecks and
shortages. In addition, the cereal industry was impacted by a 12-week-long labour strike over
wages, resulting in declines in this core market within staples.
Kellogg Europe has undertaken a new “Wellbeing Manifesto” which aims to aid people and the
planet by reducing its carbon footprint by upgrading packaging, reducing sugar and salt in its
Wellbeing Manifesto cereals by 10% and 20%, respectively; and pledging to feed more than 30 million people in
need.
Kellogg is leveraging the strength of its existing brands such as Special K and Nutri Grain which
already have a healthier image; and is focusing on innovating these brands in terms of
Leverage health and existing
additional fortification, sugar reduction and “Mash Ups”. The company is merging brands in
strong brands
terms of flavour profiles and working with crossover products, extending from one category
into another in order to meet consumer needs for health and convenience.
Appendix
APPENDIX 35
35
Projected company sales: FAQs (1)

Why project company sales?
Company and brand sales projections are a useful way to compare
relative future performance. These are not forecasts in the traditional
sense, it is not realistic to forecast company activity. Instead our
projections are a measure of a company's exposure to future growth.
How do you project company sales?

Euromonitor International's company and brand sales projections are
made with two underlying assumptions. Firstly, that current year brand
shares will not change. Secondly, that there will be no mergers,
acquisitions or divestments in the future. Forecasting shares is
notoriously difficult and therefore we assume that a brand's share of any
given category will remain constant in the future. Trying to accurately
predict future M&A activity is equally fraught with difficulty.
Every category, however, will grow at a different rate and the cumulative
effect across different brand portfolios (ie every relevant country-category
combination) means certain companies will outperform others.
This is “market momentum” and is a measure of a company playing in
higher growth countries and categories relative to its rivals.
APPENDIX 36
36
Projected company sales: FAQs (2)

What is the basis for this methodology?
Based on Euromonitor International's growth decomposition
analysis, it is evident that general market momentum is the single
most important contributor to company performance,
outperforming the impact of both market share gains and M&A
activity.
This learning is based on analysing all brand and company sales
data in every category and company in Passport. (Clearly the same
does not apply in any circumstance where a given company has
made a major acquisition or divestment).
For the largest companies, market momentum shows even greater
significance and so exposure to growth offers a sound basis for
projecting relative future performance.
Note: Growth Decomposition and Projected Sales are based on the

sum of all activity in researched countries only, and therefore do
not take into account the effect of non-researched (modelled)
markets. For this reason, there will be slight differences compared
with full global data found elsewhere in this report.
KELLOGG CO IN STAPLES (WORLD)
For Further Insight please contact
Shereen Tromp
Senior Consultant
shereen.tromp@euormonitor.com
• https://www.linkedin.com/in/shereen-tromp-84108382
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Kellogg Co in Staples (World)

The data included in this report is accurate according to Euromonitor International´s

Top companies at a glance

Kellogg’s global footprint

Resumption of pre-pandemic lifestyles results in declines in core categories

Future growth to come through core US market

Kellogg Co retains its strong overall position in 2021

Breakfast cereals sales show growth potential in emerging markets

RTE cereals remains Kellogg Co’s core product portfolio globally

Pop-Tarts is Kellogg Co’s biggest baked goods brand globally

Projected baked goods sales

Kellogg Co focuses on growing US market by innovating meat analogues

Projected company sales: FAQs (1)

How do you project company sales?

Projected company sales: FAQs (2)

Note: Growth Decomposition and Projected Sales are based on the

For Further Insight please contact

To find out more about Euromonitor International's complete

Euromonitor International network and coverage

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