Kellogg Declares Victory In 'First Wave Of Brand Building Investment'

Kellogg Company K said in a press release its "first wave of brand building investment" has been successful.

What Happened

From 2017 through 2019, Kellogg's management's investments in Pringles, Cheez-It, Pop-Tarts, and Rice Krispie Treats generated double-digit growth in three of the four brands. Now the company will leverage its recent momentum and proceed with a "second wave" of investment.

Kellogg's will oversee a "more modest" round of investment in supporting Froot Loops, Frosted Flakes, Frosted Mini-Wheats, and Raisin Bran, as well as BXBAR, Special K, and MorningStar Farms.

Why It's Important

Kellogg CEO Steven Cahillane said during a recent conference that the investments will be "proactive" and "opportunistic." Investors should view it as another "reason for confidence in our ability to deliver consistent growth."

Cahillane also said during the presentation its investments could be negatively viewed by short-term investors who want to see incremental profit flow to the bottom line.

"Keep in mind that we're making this incremental investment from a position of real strength," he said. "We just came from a year of broad-based organic net sales growth, and in the second half, a return to operating profit growth, excluding the divestiture. This is anything but investment out of urgent need. This is investment in sustaining steady, dependable, balanced growth well into the future."

Photo by Daniel von Appen on Unsplash