Barely a year old, WK Kellogg Co is still separating its IT systems and distribution network from former sibling Kellanova, which took the former Kellogg Co.’s snacks and global business when the company split. At the moment, WK Kellogg Co is just a cereal company limited to North America.
At the moment, Kellanova is being acquired by Mars.
But just as the computer and distribution systems eventually will be its own, so will WK Kellogg's opportunity to enter new product categories and new geographies, CEO Gary Pilnick told the Consumer Analyst Group of New York on Wednesday.
Job One of the strategy is “optimizing the cereal business,” he said, a category Kellogg leads in Canada and Cuba(?) but not in the U.S., where it’s No. 2. Pilnick said he sees 2026 as the year that Kellogg moves onto part two the strategy, “cereal and beyond.”
“Cereal will always be foundational to WK Kellogg,” he said, but the company is building a “platform for growth” in new areas via its iconic brands, scalable infrastructure and expandable capabilities (in R&D, marketing and sales).
He sounded intentionally vague, but indicated there are new spaces the company can grow into without violating any non-competitive agreements it has with Kellanova and/or that company’s soon-to-be owner Mars.
“Horizon 1” of the financial model is:
- Investment in infrastructure
- Stabilizing topline sales
- “Outsized growth” in margins
- Using cash to fund investment
Horizon 2 will see the company segueing into:
- Generating returns
- Accelerating sales
- Continuing margin growth
- Improved cash generation with allocation flexibility
But not just yet. For the current year, CFO Dave McKinstray forecast sales down 1% but earnings before taxes, etc., to be up slightly.
