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Kellogg explores sale of cookies and fruit snacks businesses

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Kellogg explores sale of cookies and fruit snacks businesses

Kellogg explores sale of cookies and fruit snacks businesses
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Phil Noble(Reuters)
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(Reuters) - Kellogg Co <K.N> said on Monday it would reorganize its North American division and explore a sale of its cookies and fruit snacks units, which include brands such as Keebler and Stretch Island, to sharpen focus on its core businesses.

Kellogg has been struggling to boost sales as consumers shift towards healthier eating habits. Intense pricing pressure has also taken its toll, as grocers aggressively compete against Amazon.com Inc <AMZN.O> and other online retailers.

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"We need to make strategic choices about our business and these brands have had difficulty competing for resources and investments within our portfolio," Chief Executive Officer Steve Cahillane said in a statement.

The news comes less than two weeks after Kellogg cut its full-year profit outlook, citing increased spending on advertising and higher distribution costs.

Analysts have long voiced their concerns that the "carb-centric" brands in Kellogg's U.S morning foods business - which houses Corn Flakes and Fruit Loops - are out of step with health-conscious consumers.

Kellogg said it would be restructuring its North America business beginning next year.

The company said it would consolidate its U.S morning foods, snacks and frozen foods businesses into a single unit, comprising 80 percent of North America revenue.

The announcement comes a day before its investor day.

(Reporting by Soundarya J in Bengaluru; Editing by Maju Samuel)

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