| Type | Public |
|---|---|
| Traded as | NYSE: K S&P 500 Component |
| Industry | Food processing |
| Founded | February 19, 1906 |
| Founder(s) | Will Keith Kellogg |
| Headquarters | Battle Creek, Michigan, United States |
| Area served | Worldwide |
| Key people | James Jenness (Chairman) John A. Bryant (CEO) |
| Products | Cereals Cookies Crackers Toaster pastries Cereal bars Fruit-flavored snacks Frozen waffles Veggie foods |
| Revenue | US$ 12.397 billion (2010)[1] |
| Operating income | US$ 1.990 billion (2010)[1] |
| Net income | US$ 1.240 billion (2010)[1] |
| Total assets | US$ 11.847 billion (2010)[1] |
| Total equity | US$ 2.154 billion (2010)[1] |
| Employees | 30,600 (2010)[1] |
| Website | www.kelloggs.com www.kelloggcompany.com |
Kellogg Company (often referred to as Kellogg or Kellogg's in its corporate logo, or even more formally as Kellogg's of Battle Creek), is a producer of cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and vegetarian foods. The company's brands include Corn Flakes, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, Bear Naked, Morningstar Farms, Famous Amos, Special K, All-Bran, Frosted Mini-Wheats, Club Crackers 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. Its largest factory is Trafford Park in Manchester, UK which is Kellogg's European headquarters.[3] Kellogg trades under the ticker symbol NYSE: K. The Kellogg Company also holds a Royal Warrant from HM Queen Elizabeth II and the Prince of Wales.
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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.[4] From 1969 to 1977, Kellogg's acquired various small businesses including Salad Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods;[5] however, it was later criticized for not diversifying further like General Mills and Quaker Oats were.
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.[6]
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.
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.[7]
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.[8]
January 2, 2011, John A. Bryant succeeded David McKay (retired effective January 1, 2011) as CEO.
A list of cereal products produced by Kellogg's, with available varieties:
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.[11] All 4 of these cereals contain at least 40 percent pure sugar.
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 United States Environmental Protection Agency (EPA) 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.[12][13]
Kellogg's offered consumers refunds in the meantime. 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.
Kellogg provides an online list of discontinued products.
Various methods have been used in the company's history to promote the company and its brands.
Some of Kellogg's marketing has been questioned in the press, prompted by an in increase in consumer awareness of the a miss-match between the marketing messages and the products themselves. [23]
Food bloggers are also questioning the marketing methods used by cereal manufacturing companies such as Kelloggs due to their high sugar content and use of ingredients like High-fructose corn syrup [24]
W.K. Kellogg was the first to introduce prizes in boxes of cereal. The marketing strategy that he established has produced thousands of different cereal box prizes that have been distributed by the tens of billions.[25]
Kellogg's Corn Flakes had the first cereal premium with The Funny Jungleland Moving Pictures Book. The book was originally available as a prize that was given to the customer in the store with the purchase two packages of the cereal.[26] But in 1909, Kellogg's changed the book give-away to a premium mail-in offer for the cost of a dime. Over 2.5 million copies of the book were distributed in different editions over a period of 23 years.[27]
In 1945, Kellogg inserted a prize in the form of pin-back buttons into each box of Pep cereal. Pep pins have included U.S. Army squadrons as well as characters from newspaper comics and were available through 1947. There were five series of comic characters and 18 different buttons in each set, with a total of 90 in the collection.[28] Other manufacturers of major brands of cereal (including General Mills, Malt-O-Meal, Nestlé, Post Foods, and Quaker Oats) followed suit and inserted prizes into boxes of cereal to promote sales and brand loyalty.
Licensed brands have been omitted since the corresponding mascots would be obvious (e.g. Spider-Man is the mascot for Spider-Man Spidey-Berry).
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 Hut Stricklin and Richard Petty. 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. Kellogg's placed Dale Earnhardt on Kellogg's Corn Flakes boxes for 1993 six-time Winston Cup champ and 1994 seven-time Winston Cup champ as well as Jeff Gordon on the Mini Wheats box for the 1993 rookie of the year, 1995 Brickyard 400 inaugural race, 1997 Champion and 1998 three-time Champ, and a special three-pack racing box set with Dale Earnhardt, Jeff Gordon, Terry Labonte, and Dale Jarrett in 1996. 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.
Kellogg's has used some merchandising for their products. Kellogg's 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; users could play as Tony the Tiger, Coco the Monkey, or Snap, Crackle, and Pop. Kellogg's 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 Kellogg's logo on them, and occasionally their mascots.
We expect more from a great American company than making dubious claims—not once, but twice—that its cereals improve children’s health...
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).[29][30][31]
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."[31]
The FTC had previously found fault with Kellogg's claims that Frosted Mini-Wheats cereal improved kids' attentiveness by nearly 20%.[32]
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.[33]
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