Dive Brief:
- The cereal industry is in flux, and analysts like Credit Suisse's Robert Moskow believe that the entire category is in for a resurgence.
- "Recent tracking data has showed consistent sequential improvements in Kellogg’s cereal business and in the cereal category as a whole. We expect Kellogg’s cereal business (45% of sales) to return to growth in 2016 behind the revitalization of the Kashi and Special K brands," Moskow said.
- Post Holdings posted a profit loss in the fourth quarter of $72.5 million, but that was still a gain on last year's fourth quarter profit of $287.4 million.
Dive Insight:
Post has been diversifying itself with a number of acquisitions as it struggles to deal with the cereal segment's falling sales. The costs of those acquisitions has been eating into Post's profits, but they've been paying off at the top line, as Post also reported a 26% boost to sales to $1.31 billion, which helped narrow any losses in profits.
Post completed its acquisition of Willamette Egg Farms, which the company is combining with its Michael Foods business. That segment's net sales fell fell by 0.67%, while all other segments' net sales rose.
Part of Moskow's confidence in Kellogg is the company's renewed focus on its Kashi brand, which David Denholm, CEO of Kashi, believes will be a $1 billion business opportunity.
"To meet expectations, Kashi executives have outlined a three-year plan, which included creating a strong foundation for the business in 2015, stabilizing the business, achieving moderate growth and completing its goal of having the entire line of products be Non-GMO Project verified in 2016, and achieving strong sustainable growth in 2017," Food Business News reported.
Between the cereal giants, General Mills and Kellogg, General Mills won out Food Dive's food fight, as the category looks toward improvement.