Kel­logg re­vamps top man­age­ment as de­cline in sales con­tin­ues

The Gulf Today - Business - - 4international -

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.

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