Kellogg Company

Kellogg Company
Type Public (NYSE: K)
Industry Food processing
Founded 1906
Founder(s) Will Keith Kellogg
Headquarters United States Battle Creek, Michigan, U.S.
Key people James Jenness (Chairman)
David Mackay (President, CEO)
John Bryant (COO)
Products Cereals
Cookies
Crackers
Toaster pastries
Cereal Bars
Fruit-flavored Snacks
Frozen Waffles
Veggie Foods
Revenue increase US$ 12.6 billion (2009)
Operating income increase US$ 2.0 billion (2009)
Net income increase US$ 1.2 billion (2009)
Total assets increase US$ 11.20 billion (2009)
Total equity increase US$ 2.27 billion (2009)
Employees approximately 31,000 (2009)
Website http://www.kelloggcompany.com/
References: [1]

Kellogg Company (often referred to as Kellogg or Kellogg's in its corporate logo, or even more formally as Kellogg's of Battle Creek), with 2008 sales of nearly $13 billion, is the world's leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, Toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and vegetarian foods. The company's brands include Kellogg's, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, BearNaked, Morningstar Farms, Famous Amos, Special K, All-Bran, Frosted Mini-Wheats, Club and Kashi. Kellogg products are manufactured in 18 countries and marketed in more than 180 countries around the world.[2] Its global headquarters are in Battle Creek, Michigan, USA. Kellogg trades under the ticker symbol NYSE: K.

The Kellogg Company holds a Royal Warrant from HM Queen Elizabeth II and the Prince of Wales.

Contents

History

First Kellogg's package

Kellogg's was founded as the Battle Creek Toasted Corn Flake Company on February 19, 1906, by Will Keith Kellogg as an outgrowth of his work with his brother John Harvey Kellogg at the Battle Creek Sanitarium following practices based on the Seventh-day Adventist Christian denomination. The company produced and marketed the hugely successful Kellogg's Toasted Corn Flakes and was renamed the Kellogg Company in 1922.

In 1930, the Kellogg Company announced that most of its factories would shift towards 30 hour work weeks, from the usual 40. This practice remained until World War II, and continued briefly after the war, although some departments and factories remained locked into 30 hour work weeks until 1980.[3] From 1969 to 1977, Kellogg's acquired various small businesses including Salad Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods;[4] however, it was later criticized for not diversifying further like General Mills and Quaker Oats were.

Kellogg Company headquarters

After underspending its competition in marketing and product development, Kellogg's U.S. market share hit a low 36.7% in 1983. A prominent Wall Street analyst called it "a fine company that's past its prime" and the cereal market was being regarded as "mature." Such comments invigorated Kellogg chairman William E. LaMothe to improve, which primarily involved approaching the demographic of 80 million baby boomers rather than marketing children-oriented cereals. In emphasizing cereal's convenience and nutritional value, Kellogg helped persuade U.S. consumers age 25 to 49 to eat, 26% more cereal than people that age ate five years prior. The U.S. ready-to-eat cereal market, worth $3.7 billion at retail in 1983, totaled $5.4 billion by 1988, and had expanded three times as fast as the average grocery category. Kellogg's also introduced new products including Crispix, Raisin Squares, and Nutri-Grain Biscuits and reached out internationally with Just Right aimed at Australians and Genmai Flakes for Japan. During this time, the company maintained success over its top competitors: General Mills, who largely marketed children's cereals, and Post, who had difficulty in the adult cereal market.[5]

In March 2001, Kellogg made its largest acquisition, the Keebler Company. Over the years it has also gone on to acquire Morningstar Farms and Kashi divisions or subsidiaries. Kellogg also owns the Bear Naked, Natural Touch, Cheez-It, Murray, Austin, Famous Amos, Gardenburger (acquired 2007) and Plantation brands.

Corporate governance

Current members of Kellogg Company's board of directors include: James M. Jenness, chairman; David Mackay; Dr. Benjamin S. Carson, Sr.; John T. Dillon; Gordon Gund; Dorothy A. Johnson; Donald R. Knauss; Ann McLaughlin Korologos; Rogelio M. Rebolledo; Sterling K. Speirn; Robert A. Steele and Dr. John L. Zabriskie.

On January 24, 2005, the former CEO (since April 1999) and chairman of the board of directors (since April 2000), Carlos Gutierrez became U.S. Secretary of Commerce in the second term of former President George W. Bush. Kellogg's board of directors named James M. Jenness as chairman and CEO to replace Gutierrez.

On October 23, 2006, Kellogg's announced that president and chief operating officer David Mackay would become the chief executive officer, effective December 31, 2006. Jenness will continue to serve as chairman of the Board of Directors.[6]

In June 2007, Kellogg announced that by the end of 2008 it would stop advertising to children under twelve those cereals and snacks that do not meet specific nutrient guidelines.[7]

Products

Cereal

Advertisement, 1910s

A list of cereal products produced by Kelloggs, with available varieties.

2010 Cereal Recall

On June 25, the company voluntarily began to recall about 28 million boxes of Apple Jacks, Corn Pops, Froot Loops and Honey Smacks because of an unusual smell and flavor from the packages' liners that could make people ill. Kellogg's said about 20 people complained about the cereals, including five who reported nausea and vomiting. Consumers reported the cereal smelled or tasted waxy or like metal or soap. Company spokeswoman J. Adaire Putnam said some described it as tasting stale. However, no serious health problems have been reported.[8]

The suspected chemical that caused the illnesses was "2-methylnaphthalene," used in the cereal packaging process. Little is known about 2-methylnaphthalene’s impact on human health as the Food and Drug Administration has no scientific data on its impact on humans, and the Environmental Protection Agency also does not have health and safety data. This is despite the EPA having sought information on it from the chemical industry for 16 years. 2-methylnaphthalene is a component of crude oil, and is “structurally related to naphthalene, an ingredient in mothballs and toilet-deodorant blocks” that the EPA considers a possible human carcinogen. [9]

Kellogg's offered consumers refunds in the meantime.(Reference needed) Only products with the letters "KN" following the use-by date are included in the recall. The products were distributed throughout the U.S. and began arriving in stores in late March 2010. Products in Canada were not affected.(Reference needed)

Discontinued cereals and foods

Kellogg provides an online list of discontinued products.

A banana-flavoured variation of Rice Krispies. First appeared in the UK in 1995, but discontinued shortly thereafter.
Sold in the UK for a limited period
Introduced in 1984 and inspired by the multi-lingual droid from Star Wars, the cereal called itself a "a New (crunchy) Force at Breakfast" and was composed of "twin rings phased together for two crunches in every double-O". In other words, they were shaped like the number 8.
A chocolate version of Corn Flakes. First sold in the UK in 1998, but discontinued a few years later.
Manufactured approximately from the 1920s to the 1950s; based on shreds of wheat but different from shredded wheat in texture. Unlike the latter, it tended to remain crisp in milk. In the Chicago area, Krumbles was available into the late 1960's. It was also high in fiber, although that attribute was not in vogue at the time.
Oat-based cereal physically resembling the competing brand Cheerios, with half the OKs shaped like letter O's and the other half shaped like K's, but didn't taste like Cheerios. OKs originally featured a Scottish bagpiper on the box; this was replaced by the more familiar Yogi Bear.
Best remembered as the sponsor of the Superman radio serial.

Kellogg's International

Mascots

Licensed brands have been omitted since the corresponding mascots would be obvious (e.g. Spider-Man is the mascot for Spider-Man Spidey-Berry).

Motorsports

Kellogg's made its first foray into auto racing in 1991–92, when the company sponsored the #41 Chevrolets fielded by Larry Hedrick Motorsports in the NASCAR Winston Cup Series and driven by Phil Parsons, Dave Marcis, Greg Sacks and Hut Stricklin. But they gained greater prominence for their sponsorship of two time NASCAR Winston Cup Champion Terry Labonte from 1993 (at Billy Hagan Racing) until his retirement in 2006, and Hendrick Motorsports from 1994 until the end of 2006, initially with Labonte with both their Corn Flakes and Frosted Flakes brands, including Labonte's second NASCAR Championship (1996), and his second win in a major (the 2003 Southern 500). After Labonte's retirement, the sponsor stayed when Hendrick with new driver Kyle Busch. The company has consistently reduced its sponsorship, where since 2007 it shares only the hood or the sides of the cars with co-primary sponsor Carquest Auto Parts now driven by Mark Martin. Kellogg's will move to Roush Fenway Racing with driver Carl Edwards in 2010.

Merchandising

Kelloggs has used some merchandising for their products. Kelloggs once released Mission Nutrition, a PC Game that came free with special packs of cereal. It played in a similar fashion as Donkey Kong Country; you could play as Tony the Tiger, Coco the Monkey, or Snap, Crackle, and Pop. Kelloggs has also released "Talking" games. The two current versions are Talking Tony and Talking Sam. In these games, a user uses a microphone to play games and create voice commands for their computer. In Talking Tony, Tony the Tiger, one of Kellogg's most famous mascots, would be the main and only character in the game. In Talking Sam, Toucan Sam, another famous mascot, would be in the game instead. Some toy cars have the Kelloggs logo on them, and occasionally their mascots.

Advertising

We expect more from a great American company than making dubious claims — not once, but twice — that its cereals improve children’s health...

-Jon Leibowitz, Chairman of the F.T.C.[15]

On June 3, 2010, Kellogg's was found to be making unsubstantiated and misleading claims in advertising their cereal products by the Federal Trade Commission (FTC).[16] [17][15]

Kellogg's responded by stating We stand behind the validity of our product claims and research, so we agreed to an order that covers those claims. We believe that the revisions to the existing consent agreement satisfied any remaining concerns.[17]

The FTC had previously found fault with Kellogg's claims that Frosted Mini-Wheats cereal improved kids' attentiveness by nearly 20%.[18]

The Children's Advertising Review Unit of the Council of Better Business Bureaus has also suggested that the language on Kellogg Pop-Tarts packages saying the pastries are "Made with Real Fruit" should be taken off the products.[19]

References

  1. ↑ "Kellogg Company". Google Finance. http://finance.google.com/finance?q=NYSE:K. Retrieved 2008-08-04. 
  2. ↑ http://investor.kelloggs.com/releasedetail.cfm?ReleaseID=422880
  3. ↑ Jeffrey Kaplan (May/June 2008). "The Gospel of Consumption". http://www.orionmagazine.org/index.php/articles/article/2962. Retrieved 2010-06-25. 
  4. ↑ Kellogg Company FundingUniverse.com. Retrieved on 7-18-09.
  5. ↑ Steinbreder,H. John. HOW KING KELLOGG BEAT THE BLAHS Fortune (August 29, 1988). Retrieved on 7-18-09.
  6. ↑ "Kellogg's Press Release: David Mackay Named Chief Executive Officer of Kellogg Company Effective December 31, 2006". http://investor.kelloggs.com/releasedetail.cfm?ReleaseID=215514. Retrieved 2010-06-25. 
  7. ↑ "Kellogg's Reformulation". JP Farrell & Associates. January 17, 2008. http://jpfarrell.blogspot.com/search/label/Kellogg%27s. Retrieved 2010-06-25. 
  8. ↑ http://www.allvoices.com/contributed-news/6169998-kelloggs-recalls-28-million-boxes-of-cereal
  9. ↑ Washington Post, US regulators lack data on health risks of most chemicals, Aug 2 2010, by Lyndsey Layton, http://www.washingtonpost.com/wp-dyn/content/article/2010/08/01/AR2010080103469.html?hpid=topnews
  10. ↑ Kellogg Annual Report 2007 - Kellogg North America Brands
  11. ↑ SEC Info - Kellogg Co - 10-K - For 1/1/05 - EX-21.01
  12. ↑ Kelloggs Japan
  13. ↑ Welcome to Kellogg's Australia
  14. ↑ Service Conseil Consommateurs Kellogg's
  15. ↑ 15.0 15.1 "FTC Investigation of Ad Claims that Rice Krispies Benefits Children's Immunity Leads to Stronger Order Against Kellogg". FTC. 06/03/2010. http://www.ftc.gov./opa/2010/06/kellogg.shtm. Retrieved 4 June 2010. 
  16. ↑ "In the Matter of Kellogg Company, FTC Docket No. C-4262". Concurring Statement of Commissioner Julie Brill and Chairman Jon Leibowitz. FTC. June 3, 2010. http://www.ftc.gov/os/caselist/0823145/100602kelloggstatement.pdf. Retrieved 4 June 2010. 
  17. ↑ 17.0 17.1 Chan, Sewell (4 June 2010). "Kellogg to Restrict Ads to Settle U.S. Inquiry Into Health Claims for Cereal". The New York Times. http://www.nytimes.com/2010/06/04/business/04ftc.html?src=busln. Retrieved 4 June 2010. 
  18. ↑ Carey, Susan. Snap, Crackle, Slap: FTC Objects to Kellogg's Rice Krispies Health Claim. The Wall Street Journal. 4 June 2010.
  19. ↑ "Feds say Kellogg ads mislead parents- Top Stocks - MSN Money". MSN. MSN. Friday, June 4, 2010 9:31 AM. http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=1765798&_blg=1,1765798. Retrieved 4 June 2010. 

External links

http://www.allvoices.com/contributed-news/6169998-kelloggs-recalls-28-million-boxes-of-cereal

Kellogg Company
Cereals
All-Bran · Apple Jacks · Bran Buds · Cocoa Krispies  · Corn Flakes · Complete Wheat Bran Flakes · Corn Pops · Country Store · Crispix · Cruncheroos · Crunchy Nut Cornflakes · Disney Hunny B's Honey-Graham, Disney Mickey's Magix · Eggo · Froot Loops · Frosted Flakes/Frosties · Frosted Mini-Wheats · Fruit 'n Fibre · Honey Loops · Honey Smacks · Just Right · Mini Swirlz · Mueslix · Nutri-Grain · Cracklin' Oat Bran · Product 19 · Raisin Bran · Raisin Wheats · Rice Krispies · Smorz · Special K · Start · Vector
Cookies &
crackers
Austin · Carr's · Cheez-It · Chips Deluxe · Famous Amos  · Hydrox · Keebler · Mother's Cookies  · Murray
Divisions &
brands
Bear Naked · Eggo · Kashi · Gardenburger · Morningstar Farms  · Nutri-Grain · Sunshine Biscuits ·
Other
Special K2O Protein Water · Pop-Tarts · Worthington · Yogos Rollers
Discontinued
BiGG MiXX · C-3PO's · Cinnamon Crunch Crispix · Cinnamon Mini-Buns · Krumbles · Pep  · Puffa Puffa Rice