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  • 1. The Breakfast Cereal Industry
  • 2. The Breakfast Cereal Industry Gaby Lion
  • 3. THE INDUSTRY
  • 4. History of the Industry
  • 5. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious
  • 6. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious • W. K. Kellogg – Cereal created by accident – Granose
  • 7. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious • W. K. Kellogg – Cereal created by accident – Granose • C. W. Post – Grape-Nuts cereal
  • 8. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious • W. K. Kellogg – Cereal created by accident – Granose • C. W. Post – Grape-Nuts cereal
  • 9. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious • W. K. Kellogg – Cereal created by accident – Granose • C. W. Post – Grape-Nuts cereal
  • 10. History of the Industry • First Cereal by Dr. James Caleb Jackson – Granola for good health – Not too delicious • W. K. Kellogg – Cereal created by accident – Granose • C. W. Post – Grape-Nuts cereal
  • 11. Competitors and Major Companies
  • 12. Competitors and Major Companies • Three major companies: 1. Kellogg Company • Worlds largest producer of convenience foods 2. General Mills, Inc. • Most of company dedicated to breakfast cereal’s 3. Ralcorp Holdings, Inc. (Post) • Manufacturers of convenience foods
  • 13. Technology
  • 14. Technology • Flaked Cereals: – Rollers – Pressure Cookers – Conveyor belts and Drying Ovens
  • 15. Technology • Flaked Cereals: – Rollers – Pressure Cookers – Conveyor belts and Drying Ovens • Puffed Cereal(made of rice): – Rolled (but less pressure than flaked cereal) – Hot Ovens to puff
  • 16. Technology • Flaked Cereals: – Rollers – Pressure Cookers – Conveyor belts and Drying Ovens • Puffed Cereal(made of rice): – Rolled (but less pressure than flaked cereal) – Hot Ovens to puff
  • 17. Technology (Continued)
  • 18. Technology (Continued) • Packing: – 40 Boxes a minute – Moisture proof bags – Machine filled – Sealed by heat
  • 19. PICTURES FROM MADEHOW.COM
  • 20. PICTURES FROM MADEHOW.COM
  • 21. PICTURES FROM MADEHOW.COM
  • 22. PICTURES FROM MADEHOW.COM
  • 23. Growth in Industry
  • 24. Growth in Industry • Recent years – 2004-2008
  • 25. Growth in Industry • Recent years – 2004-2008 • RTE sector of industry – 92% of sales
  • 26. Profit in Industry
  • 27. Profit in Industry • Kellogg’s Company: – $12.8 Billion-2008 – $11.7 Billion-2007
  • 28. Profit in Industry • Kellogg’s Company: – $12.8 Billion-2008 – $11.7 Billion-2007 • General Mills, Inc. – $13.6 Billion-2008
  • 29. Profit in Industry • Kellogg’s Company: – $12.8 Billion-2008 – $11.7 Billion-2007 • General Mills, Inc. – $13.6 Billion-2008 • Ralcorp Holdings, Inc. – $2.8 Billion-2008 – $2.2 Billion-2007
  • 30. Profit in Industry • Kellogg’s Company: – $12.8 Billion-2008 – $11.7 Billion-2007 • General Mills, Inc. – $13.6 Billion-2008 • Ralcorp Holdings, Inc. – $2.8 Billion-2008 – $2.2 Billion-2007
  • 31. Kellogg’s Share of GDP
  • 32. Kellogg’s Share of GDP • Good performance in 2008
  • 33. Kellogg’s Share of GDP • Good performance in 2008 • Frozen foods and cereal sales offset significantly higher commodity inflation
  • 34. Kellogg’s Share of GDP • Good performance in 2008 • Frozen foods and cereal sales offset significantly higher commodity inflation • Impact of negative foreign exchange translation
  • 35. Kellogg’s Share of GDP • Good performance in 2008 • Frozen foods and cereal sales offset significantly higher commodity inflation • Impact of negative foreign exchange translation
  • 36. Source: Bureau of Economic Analysis . “GDP by Industry News Release”
  • 37. Source: Bureau of Economic Analysis . “GDP by Industry News Release”
  • 38. Economy’s Effect on the Food Processing Industry
  • 39. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good
  • 40. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food
  • 41. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food • Inflated cost of key ingredients (ex: cocoa)
  • 42. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food • Inflated cost of key ingredients (ex: cocoa) • Value Line Timeliness Ranking System places the Food Processing Industry in the upper quarter for all industries covered
  • 43. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food • Inflated cost of key ingredients (ex: cocoa) • Value Line Timeliness Ranking System places the Food Processing Industry in the upper quarter for all industries covered
  • 44. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food • Inflated cost of key ingredients (ex: cocoa) • Value Line Timeliness Ranking System places the Food Processing Industry in the upper quarter for all industries covered Would I invest? Yes!
  • 45. Economy’s Effect on the Food Processing Industry • Food Processors performance is relatively good • Stressed out people seek affordable comfort food • Inflated cost of key ingredients (ex: cocoa) • Value Line Timeliness Ranking System places the Food Processing Industry in the upper quarter for all industries covered Would I invest? Yes!
  • 46. Code of Federal Regulations
  • 47. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient
  • 48. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV
  • 49. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV • Some cereals even provide 100% of the DV of certain nutrients
  • 50. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV • Some cereals even provide 100% of the DV of certain nutrients
  • 51. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV • Some cereals even provide 100% of the DV of certain nutrients
  • 52. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV • Some cereals even provide 100% of the DV of certain nutrients Source: Mannie, Elizabeth. Food Product Design.
  • 53. Code of Federal Regulations • Claiming that a cereal is a “good” source, “contains,” or “provides” a vitamin, must supply at least 10% of the DV of that nutrient • To claim “high in,” “rich in,” or “excellent source of,” the food must supply at least 20% of the DV • Some cereals even provide 100% of the DV of certain nutrients Source: Mannie, Elizabeth. Food Product Design.
  • 54. Government Regulations
  • 55. Government Regulations • Regulated by the U.S. Food and Drug Administration, U.C. Federal Trade Commission, the U.S. Departments of Agriculture
  • 56. Government Regulations • Regulated by the U.S. Food and Drug Administration, U.C. Federal Trade Commission, the U.S. Departments of Agriculture • Control of food quality and safety, ingredients, advertising, relations with distributors and retailers, health and safety and the environment
  • 57. Government Regulations • Regulated by the U.S. Food and Drug Administration, U.C. Federal Trade Commission, the U.S. Departments of Agriculture • Control of food quality and safety, ingredients, advertising, relations with distributors and retailers, health and safety and the environment • If found to be out of compliance with regulations Kellogg’s could be subject to fines, injunctions, recalls, or potential criminal sanctions
  • 58. Government Regulations • Regulated by the U.S. Food and Drug Administration, U.C. Federal Trade Commission, the U.S. Departments of Agriculture • Control of food quality and safety, ingredients, advertising, relations with distributors and retailers, health and safety and the environment • If found to be out of compliance with regulations Kellogg’s could be subject to fines, injunctions, recalls, or potential criminal sanctions
  • 59. Government Regulations • Regulated by the U.S. Food and Drug Administration, U.C. Federal Trade Commission, the U.S. Departments of Agriculture • Control of food quality and safety, ingredients, advertising, relations with distributors and retailers, health and safety and the environment • If found to be out of compliance with regulations Kellogg’s could be subject to fines, injunctions, recalls, or potential criminal sanctions Source: Kellogg’s Annual Report 2008
  • 60. Regulation of Raw Materials and Trade
  • 61. Regulation of Raw Materials and Trade
  • 62. Regulation of Raw Materials and Trade • World supplies and prices of raw materials and packaging materials
  • 63. Regulation of Raw Materials and Trade • World supplies and prices of raw materials and packaging materials • Government trade policies
  • 64. Regulation of Raw Materials and Trade • World supplies and prices of raw materials and packaging materials • Government trade policies • Fluctuation of commodities with government intervention
  • 65. The Future of the Kellogg’s and the Food Processing Industry
  • 66. The Future of the Kellogg’s and the Food Processing Industry • Kellogg’s at the forefront of the food processing industry
  • 67. The Future of the Kellogg’s and the Food Processing Industry • Kellogg’s at the forefront of the food processing industry • Safety for conservative investors
  • 68. The Future of the Kellogg’s and the Food Processing Industry • Kellogg’s at the forefront of the food processing industry • Safety for conservative investors • Healthy gains over the next 3 to 5 years
  • 69. The Future of the Kellogg’s and the Food Processing Industry • Kellogg’s at the forefront of the food processing industry • Safety for conservative investors • Healthy gains over the next 3 to 5 years • History of solid sales and earnings growth
  • 70. The Future of the Kellogg’s and the Food Processing Industry • Kellogg’s at the forefront of the food processing industry • Safety for conservative investors • Healthy gains over the next 3 to 5 years • History of solid sales and earnings growth
  • 71. The Company
  • 72. INCOME STATEMENT All numbers in thousands PERIOD ENDING 3-Jan-09 27-Sep-08 28-Jun-08 29-Mar-08 Total Revenue 2,933,000 3,288,000 3,343,000 3,258,000 Cost of Revenue 1,777,000 1,885,000 1,899,000 1,894,000 Gross Profit 1,156,000 1,403,000 1,444,000 1,364,000 Operating Expenses Selling General and Administrative 811,000 870,000 914,000 819,000 Operating Income or Loss 345,000 533,000 530,000 545,000 Income from Continuing Operations Total Other Income/Expenses Net -6,000 13,000 -8,000 -11,000 Earnings Before Interest And Taxes 339,000 546,000 522,000 534,000 Interest Expense 78,000 71,000 77,000 82,000 Income Before Tax 261,000 475,000 445,000 452,000 Income Tax Expense 82,000 133,000 133,000 137,000 Net Income From Continuing Ops 179,000 342,000 312,000 315,000 Net Income $179,000 $342,000 $312,000 $315,000
  • 73. BALANCE SHEET All numbers in thousands PERIOD ENDING 3-Jan-09 27-Sep-08 28-Jun-08 29-Mar-08 Assets Current Assets Cash And Cash Equivalents 255,000 684,000 556,000 532,000 Short Term Investments 43,000 14,000 - - Net Receivables 1,100,000 1,374,000 1,370,000 1,471,000 Inventory 897,000 907,000 942,000 893,000 Other Current Assets 226,000 128,000 169,000 174,000 Total Current Assets 2,521,000 3,107,000 3,037,000 3,070,000 Long Term Investments 43,000 16,000 - - Property Plant and Equipment 2,933,000 3,067,000 3,071,000 3,052,000 Goodwill 3,637,000 3,652,000 3,597,000 3,598,000 Intangible Assets 1,461,000 1,449,000 1,449,000 1,449,000 Other Assets 351,000 747,000 839,000 763,000 Total Assets 10,946,000 12,038,000 11,993,000 11,932,000
  • 74. BALANCE SHEET (continued)
  • 75. BALANCE SHEET (continued) Liabilities Current Liabilities Accounts Payable 2,522,000 3,382,000 3,516,000 3,226,000 Short/Current Long Term Debt 18,000 25,000 2,000 466,000 Other Current Liabilities 1,012,000 365,000 365,000 399,000 Total Current Liabilities 3,552,000 3,772,000 3,883,000 4,091,000 Long Term Debt 4,072,000 4,027,000 4,008,000 4,018,000 Other Liabilities 1,574,000 912,000 936,000 923,000 Deferred Long Term Liability Charges 300,000 708,000 662,000 666,000 Total Liabilities 9,498,000 9,419,000 9,489,000 9,698,000 Stockholders' Equity Common Stock 105,000 105,000 105,000 105,000 Retained Earnings 4,836,000 4,790,000 4,590,000 4,399,000 Treasury Stock -1,790,000 -1,812,000 -1,915,000 -1,933,000 Capital Surplus 438,000 424,000 407,000 388,000 Other Stockholder Equity -2,141,000 -888,000 -683,000 -725,000 Total Stockholder Equity 1,448,000 2,619,000 2,504,000 2,234,000 Net Tangible Assets ($) (3,650,000) (2,482,000) (2,542,000) (2,813,000)
  • 76. CASH FLOW All numbers in thousands PERIOD ENDING 3-Jan-09 27-Sep-08 28-Jun-08 29-Mar-08 Net Income 179,000 342,000 312,000 315,000 Operating Activities, Cash Flows Provided By or Used In Depreciation 101,000 92,000 88,000 94,000 Adjustments To Net Income -225,000 30,000 2,000 18,000 Changes In Accounts Receivables 230,000 25,000 35,000 -242,000 Changes In Liabilities -189,000 68,000 -49,000 65,000 Changes In Inventories 8,000 43,000 -49,000 39,000 Changes In Other Operating Activities -25,000 -101,000 102,000 -41,000 Total Cash Flow From Operating Activities 79,000 499,000 441,000 248,000 Investing Activities, Cash Flows Provided By or Used In Capital Expenditures -166,000 -116,000 -112,000 -67,000 Investments - - - - Other Cash flows from Investing Activities -19,000 -78,000 -18,000 -105,000 Total Cash Flows From Investing Activities -185,000 -194,000 -130,000 -172,000
  • 77. Financing Activities, Cash Flows Provided By or Used In Dividends Paid -130,000 -129,000 -117,000 -119,000 Sale Purchase of Stock 20,000 94,000 13,000 -602,000 Net Borrowings -153,000 -105,000 -185,000 628,000 Other Cash Flows from Financing Activities -9,000 5,000 1,000 8,000 Total Cash Flows From Financing Activities -272,000 -135,000 -288,000 -85,000 Effect Of Exchange Rate Changes -51,000 -42,000 1,000 17,000 Change In Cash and Cash Equivalents ($429,000) $128,000 $24,000 $8,000
  • 78. Ready to Eat Cereal
  • 79. Ready to Eat Cereal Kellogg’s • All-Bran • Apple Jacks • Complete • Kellogg’s Corn Flakes • Cracklin’ Oat Bran • Crispix • Crunch • Crunchy Blends • Eggo Cereal • Froot Loops • Frosted Flakes • Frosted Mini-Wheats • Fruit Harvest • Honey Smacks • Pops • Product 19 • Kellogg’s Raisin Bran • Rice Krispies • Smart Start • Special K
  • 80. Ready to Eat Cereal Kellogg’s Kashi: • All-Bran • GO LEAN • Apple Jacks • Organic Promise • Complete • Kellogg’s Corn Flakes • Good Friends • Cracklin’ Oat Bran • Mighty Bites • Crispix • Crunch • Heart to Heart • Crunchy Blends • 7 Whole Grains • Eggo Cereal • Froot Loops • Frosted Flakes • Frosted Mini-Wheats • Fruit Harvest • Honey Smacks • Pops • Product 19 • Kellogg’s Raisin Bran • Rice Krispies • Smart Start • Special K
  • 81. Ready to Eat Cereal Kellogg’s Kashi: • All-Bran • GO LEAN • Apple Jacks • Organic Promise • Complete • Kellogg’s Corn Flakes • Good Friends • Cracklin’ Oat Bran • Mighty Bites • Crispix • Crunch • Heart to Heart • Crunchy Blends • 7 Whole Grains • Eggo Cereal • Froot Loops • Frosted Flakes • Frosted Mini-Wheats • Fruit Harvest • Honey Smacks • Pops • Product 19 • Kellogg’s Raisin Bran • Rice Krispies • Smart Start • Special K
  • 82. Ready to Eat Cereal Kellogg’s Kashi: • All-Bran • GO LEAN • Apple Jacks • Organic Promise • Complete • Kellogg’s Corn Flakes • Good Friends • Cracklin’ Oat Bran • Mighty Bites • Crispix • Crunch • Heart to Heart • Crunchy Blends • 7 Whole Grains • Eggo Cereal • Froot Loops • Frosted Flakes • Frosted Mini-Wheats • Fruit Harvest • Honey Smacks • Pops • Product 19 • Kellogg’s Raisin Bran • Rice Krispies • Smart Start • Special K
  • 83. Wholesome/Portable Snacks
  • 84. Wholesome/Portable Snacks Pop-Tarts • Pop-Tarts Toaster Pastries • Kellogg's Go-Tarts! Snack Bars • Kashi Chewy Granola Bars • Kashi GOLEAN Bars • Kellogg's Crunchy Nut • Kellogg’s Granola Munch’ems • Rice Krispies Treats Squares • Special K Bars Breakfast Bars
  • 85. Wholesome/Portable Snacks Pop-Tarts • Pop-Tarts Toaster Pastries • Kellogg's Go-Tarts! Snack Bars • Kashi Chewy Granola Bars • Kashi GOLEAN Bars • Kellogg's Crunchy Nut • Kellogg’s Granola Munch’ems • Rice Krispies Treats Squares • Special K Bars Breakfast Bars • All-Bran Bars
  • 86. Wholesome/Portable Snacks Pop-Tarts • Pop-Tarts Toaster Pastries • Kellogg's Go-Tarts! Snack Bars • Kashi Chewy Granola Bars • Kashi GOLEAN Bars • Kellogg's Crunchy Nut • Kellogg’s Granola Munch’ems • Rice Krispies Treats Squares • Special K Bars Breakfast Bars • All-Bran Bars • Nutri-Grain Cereal Bars
  • 87. Wholesome/Portable Snacks Pop-Tarts • Pop-Tarts Toaster Pastries • Kellogg's Go-Tarts! Snack Bars • Kashi Chewy Granola Bars • Kashi GOLEAN Bars • Kellogg's Crunchy Nut • Kellogg’s Granola Munch’ems • Rice Krispies Treats Squares • Special K Bars Breakfast Bars • All-Bran Bars • Nutri-Grain Cereal Bars • Nutri-Grain Muffin Bars
  • 88. Wholesome/Portable Snacks Pop-Tarts • Pop-Tarts Toaster Pastries • Kellogg's Go-Tarts! Snack Bars • Kashi Chewy Granola Bars • Kashi GOLEAN Bars • Kellogg's Crunchy Nut • Kellogg’s Granola Munch’ems • Rice Krispies Treats Squares • Special K Bars Breakfast Bars • All-Bran Bars • Nutri-Grain Cereal Bars • Nutri-Grain Muffin Bars
  • 89. Cookies & Crackers
  • 90. Cookies & Crackers Keebler Cookies • Keebler Cookies • Chips Deluxe Cookies • E.L. Fudge Cookies • Fudge Shoppe Cookies • Golden Vanilla Wafers Cookies • Sandies Cookies • Soft Batch Cookies • Vienna Fingers Cookies Carr’s • Carr’s Cookies Famous Amos • Famous Amos Cookies Kashi
  • 91. Cookies & Crackers Keebler Cookies • Keebler Cookies • Chips Deluxe Cookies • E.L. Fudge Cookies • Fudge Shoppe Cookies • Golden Vanilla Wafers Cookies • Sandies Cookies • Soft Batch Cookies • Vienna Fingers Cookies Carr’s • Carr’s Cookies Famous Amos • Famous Amos Cookies Kashi • Kashi TLC Crackers
  • 92. Cookies & Crackers Keebler Cookies Keebler Crackers • Keebler Cookies • Club Crackers • Gripz • Chips Deluxe Cookies • Keebler Grahams • E.L. Fudge Cookies • Munch’ems Baked Snacks • Fudge Shoppe Cookies • Town House Crackers • Golden Vanilla Wafers Cookies • Wheatables Crackers • Sandies Cookies • Toasteds Crackers • Zesta Crackers • Soft Batch Cookies • Vienna Fingers Cookies Austin • Austin Crackers Carr’s • Carr’s Cookies Carr’s • Carr’s Crackers Famous Amos • Famous Amos Cookies Sunshine • Cheez-It Crackers • Sunshine Krispy Crackers Kashi • Kashi TLC Crackers
  • 93. Cookies & Crackers Keebler Cookies Keebler Crackers • Keebler Cookies • Club Crackers • Gripz • Chips Deluxe Cookies • Keebler Grahams • E.L. Fudge Cookies • Munch’ems Baked Snacks • Fudge Shoppe Cookies • Town House Crackers • Golden Vanilla Wafers Cookies • Wheatables Crackers • Sandies Cookies • Toasteds Crackers • Zesta Crackers • Soft Batch Cookies • Vienna Fingers Cookies Austin • Austin Crackers Carr’s • Carr’s Cookies Carr’s • Carr’s Crackers Famous Amos • Famous Amos Cookies Sunshine • Cheez-It Crackers • Sunshine Krispy Crackers Kashi • Kashi TLC Crackers
  • 94. Natural, Organic, Frozen & Specialty Channels
  • 95. Natural, Organic, Frozen & Specialty Channels • Natural • Worthington • Loma Linda • Organic • Morningstar Farms Organic • Frozen • Eggo • Kashi GOLEAN Waffles
  • 96. Natural, Organic, Frozen & Specialty Channels • Natural • Worthington • Loma Linda • Organic • Morningstar Farms Organic • Frozen • Eggo • Kashi GOLEAN Waffles • Morningstar Farms
  • 97. Natural, Organic, Frozen & Specialty Channels • Natural • Specialty Channels • Worthington • Keebler® Graham Crackers Crumbs • Loma Linda • Keebler® Cones • Ready Crust® Pie Crust • Organic • Kellogg’s® Stuffing Mix • Morningstar Farms Organic • Kellogg’s® Corn Flake Crumbs • Frozen • Eggo • Kashi GOLEAN Waffles • Morningstar Farms
  • 98. Natural, Organic, Frozen & Specialty Channels • Natural • Specialty Channels • Worthington • Keebler® Graham Crackers Crumbs • Loma Linda • Keebler® Cones • Ready Crust® Pie Crust • Organic • Kellogg’s® Stuffing Mix • Morningstar Farms Organic • Kellogg’s® Corn Flake Crumbs • Frozen • Eggo • Kashi GOLEAN Waffles • Morningstar Farms
  • 99. Where is the Company Now?
  • 100. Market Location
  • 101. Market Location • Manufactured around the World in 19 different countries
  • 102. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 103. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 104. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 105. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 106. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 107. Market Location • Manufactured around the World in 19 different countries • Kellogg’s operates through 4 different segments -Latin America -Europe -North America -Asia Pacific
  • 108. Competition
  • 109. Competition • -General Mills -Post -Store brands • (Safeway select)
  • 110. Competition • -General Mills -Post -Store brands • (Safeway select) • What makes Kellogg’s better: -Advertising skills
  • 111. Competition • -General Mills -Post -Store brands • (Safeway select) • What makes Kellogg’s better: -Advertising skills
  • 112. Profitability and Financial Growth
  • 113. Profitability and Financial Growth • Profit growth in recession due to increasing prices and innovation of other products
  • 114. Profitability and Financial Growth • Profit growth in recession due to increasing prices and innovation of other products • In 2008 the total net sales were $12.822 billion with a 9% change
  • 115. Market
  • 116. Market • Largest Cereal producer
  • 117. Market • Largest Cereal producer • Kellogg’s provides outstanding service by making sure their customers are always satisfied -New innovations -Taste preferences -Age
  • 118. Growth Potential
  • 119. Growth Potential • Good quality foods • Draws customers by advertisement • Family company
  • 120. Growth Potential • Good quality foods • Some new products • Draws customers by to keep customers advertisement interested – Eggo Chocolate Chip • Family company Pancakes – Kellogg’s Special K Protein Shake – Fiber Plus Anti- Oxidants
  • 121. Government Involvement
  • 122. Government Involvement • The United States Food and Drug Administration – Center for Food Safety and Applied Nutrition (CSFAN) • Under the supervision of the Secretary of Health – Reasonable standard of quality enforced • Safety measures ensure that Kellogg Brand is not selling products that are intentionally or unintentionally harmful to consumers.
  • 123. Corporate and Social Responsibility
  • 124. Corporate and Social Responsibility • Natural resources and Kellogg’s mission for sustainable growth
  • 125. Corporate and Social Responsibility • Natural resources and Kellogg’s mission for sustainable growth • The reduction of packaging/recyclable
  • 126. Corporate and Social Responsibility • Natural resources and Kellogg’s mission for sustainable growth • The reduction of packaging/recyclable • Sustainability Steering Teams – Work regionally with Governments to comply with laws and regulations – Develop appropriate governance structures – Keep finger on pulse of regions in which they are based for the company’s environmental impact
  • 127. Office of Diversity and Inclusion
  • 128. Office of Diversity and Inclusion • Employs over 32,000 workers in 180+ countries.
  • 129. Office of Diversity and Inclusion • Employs over 32,000 workers in 180+ countries. • Diverse workforce – gender, sexual orientation, age, culture, ethnicity, geography, experience, skills and work styles.
  • 130. Office of Diversity and Inclusion • Employs over 32,000 workers in 180+ countries. • Diverse workforce – gender, sexual orientation, age, culture, ethnicity, geography, experience, skills and work styles. • Diversity and inclusion plan – Plan focuses on accountability through goal setting and tracking; recruitment, retention and development; and building a more inclusive culture
  • 131. • Supplier Diversity Program – Increases use of companies owned and operated by women and minorities
  • 132. • Supplier Diversity Program – Increases use of companies owned and operated by women and minorities • The Million Dollar Club – Companies from which Kellogg’s purchases more than $1 million in goods and services, has grown from 14 companies in 2001 to 49 in 2007.
  • 133. • Supplier Diversity Program – Increases use of companies owned and operated by women and minorities • The Million Dollar Club – Companies from which Kellogg’s purchases more than $1 million in goods and services, has grown from 14 companies in 2001 to 49 in 2007. • The Platinum Club – Companies with which Kellogg’s spend $10 million or more per year.
  • 134. High Labor Standards
  • 135. High Labor Standards • Safe work environment • Adherence to compensation and employment laws and regulations • Access to freedom of association • Freedom from child labor or forced labor • Kellogg Code of Conduct – Social Accountability program, setting a policy for compliance regarding working conditions, including cleanliness, wages and the prohibition of child labor
  • 136. Responsible Marketing
  • 137. Responsible Marketing • The way a company communicates their brand in a responsible, truthful and transparent manor that allows consumers to make rational and informed decisions
  • 138. Responsible Marketing • The way a company communicates their brand in a responsible, truthful and transparent manor that allows consumers to make rational and informed decisions • Kellogg Global Nutrition Criteria (KGNC) – Determines which products should be advertised to children under the age of 12 – Reformulating products • Healthy Alternatives
  • 139. Thanks for listening! Free Rice Krispies for everyone! 40