Kellogg Expanding Single-Serve Pouches in Emerging Markets
Kellogg Co. executives spoke to investors during the company’s Q3 2018 earnings call.
The food giant is undergoing a “notable shift” toward single-serve and on-the-go pack formats with immediate consumption offerings and multi-packs in developed markets, and single-serve sachets with more affordable price points in emerging markets.
“Both are important opportunities for future growth,” CFO Fareed Khad said.
Kellogg developed and expanded these new pack formats across the breadth of its portfolio for various channels, particularly in its U.S. Snacks business where on-the-go is now running at more than 10 percent of sales, he said.
For snacking categories such as cookies, crackers, salty snacks and wholesome snacks, “our on-the-go offerings grew consumption at just about a double-digit rate in the quarter,” CEO Steven Cahillane said.
Kellogg is seeing a lot of growth on single-serve, and “we like that growth,” Khan said. “Long-term, it offers terrific potential.”
Single-serve is already a sizable part of Kellogg’s Snacks business — about 10 percent of sales — “and even with that percentage, we feel we're under-indexed to where that business could be,” he added. “And so we like the growth opportunities. We're pursuing it. A lot of our product innovation is in that space.”
An excerpt from the meeting call:
“... Led by our Cheez-It and Club brands, our crackers consumption growth accelerated, resulting in a solid share gain in the quarter. Pringles also accelerated its growth, continuing to gain share in salty snacks. In wholesome snacks, Rice Krispies Treats continues to gain share, even with supply constraints. And in cookies, resumed investment support behind Keebler Fudge Shoppe, Keebler brands, Mother's and Famous Amos is bringing these key brands back into consumption and share growth, stabilizing our share overall.