At the Feb. 21 Consumer Analyst Group of New York meeting, Kellanova executives discussed how differentiated is the snacks-led powerhouse, with half its sales coming from outside the U.S. and Canada. Furthermore, more than 80% of the company’s net sales came from global snacks and emerging markets in 2023.
Kellanova’s portfolio is positioned to play in large global markets in salty snacks, crackers and biscuits, and portable wholesome snacks. It additionally believes its iconic brands, such as Pringles, Cheez-It and others offer something no other snacks do.
The company turned its focus to discussing how Pringles has capitalized on its differentiation, poised to top $3 billion in net sales, more than double what it was when acquired in 2012. With the recent growth, the company now says the $4 billion milestone is in its sights. Although net sales growth paints a pretty picture, Kellanova sees a key opportunity for more growth in Pringles based on household penetration and the fact that the brand holds approximately 4% share in the global salty snacks category.
Kellanova has added three global manufacturing facilities for Pringles in the last 12 years and has two more on the way in Mexico and Thailand to serve that potential. The Pringles playbook, Kellanova adds, is being applied to the Cheez-It brand as well.
Geographically, Kellanova further highlighted its efforts to capitalize on what it considers the next growth frontier for packaged foods: Africa. Less than 10% of the African population uses packaged foods regularly, and a rising middle class is driving demand for those items currently. The biggest three markets Kellanova has focused on in Africa are Nigeria, Egypt and South Africa.
Kellanova already has been growing in Nigeria, where it has partnerships focused on noodles, cereals and snacks. Instant noodles are consumed today in 90% of Nigerian households, and Kellanova has pounced on that popularity. Its volume is up 1.6 times since 2015, and volume share for the company in instant noodles went from 58% in 2015 to 74% in 2023. Using a similar approach, Kellanova has experienced an 11x increase in volume growth in Egypt and a 9x volume growth in South Africa.
In North America, Kellanova admitted that its share performance in 2023 was disappointing, but it delivered on its financial performance expectations. It believes the share performance was an execution problem, not a brand problem, and expects to build momentum in the back half of the year to gain share. Long term, Kellanova targets an increase of 3-5% total net sales and an increase of 5-7% in operating profit.
