Kellogg revamps top management as decline in sales continues
MICHIGAN: Kellogg Company replaced chief executive John Bryant with food industry veteran Steven Cahillane as the world’s largest cereal maker continues efforts to halt two-and-a-half years of declining sales.
Kellogg, like other packaged food makers, has been struggling with falling demand as consumers shift to healthier alternatives, and in Bryant’s near seven-year tenure, the company has cut jobs and sought to streamline production to bolster profits.
But his zero-based budgeting plan - which requires expenses to be justified for each new period has also seen sales decline steadily since the start of 2015.
“Given the suddenness of the announcement, many investors this morning have asked whether his (Bryant’s) retirement was his own choice,” J.P. Morgan analyst Ken Goldman said in a client note.
Consultants, who know the industry well, indicated that Kellogg was not happy with its performance and the board wanted to make a change, Goldman added.
Bryant’s retirement also comes nearly two months after a distribution model overhaul of Kellogg’s US snacks unit to supply through warehouses rather than direct-tostore.
Kellogg’s shares have risen nearly 24 per cent since 51-yearold Bryant joined the company.
The Cheez-it cracker maker on Thursday also reaffirmed a fullyear 2017 forecast for a 3 per cent decline in currency-neutral comparable net sales this year and earnings of $3.97-4.03 per share.