Kellogg said its new snacking company Kellanova will focus on growing Pringles into a $4 billion brand, while expanding others like Cheez-It and Pop-Tarts into international powerhouses.
At a conference with Wall Street investors analysts Wednesday, Kellogg’s CEO Steve Cahillane said the two brands will anchor the snacking spinoff Kellanova as it aims to grow its market share. Kellogg projects the snacking company will post net sales of between $13.4 million and $13.6 million in 2024 after the split occurs.
Cahillane said Pringles, which was acquired in 2012, has the ability to adapt and fit market demands, such as through flavor and packaging innovation. The chief executive said Pringles is not reaching its potential, with single-digit share of sales in most regions.
Kellanova also plans to expand its reach in other channels such as convenience and smaller stores by launching more small-pack items. Currently, 24% of Pringles are sold in these locations, according to the company.
“We under-index in these channels with salty snacks, and this clearly points to a real opportunity for us,” Cahillane said.
The company said it plans to launch Cheez-It in a slew of new markets in the next three years — U.K., Ireland, Germany and Australia in 2024; France and Spain in 2025; and Japan in 2026. Cahillane said Kellanova plans to eventually grow the international presence for some of its other snacking brands.
“We’ll take that measured approach with Cheez-It, and then Rice Krispies Treats and Pop-Tarts vying for what comes next in that line,” Cahillane said.
The company said the plan for its snacking brands will further extend its runway for growth. Kellanova increased sales by roughly $3 billion between 2019 and 2022, at a compound annual growth rate of 9%, the company said in the presentation.
Eggo and Pop-Tarts are edging their way toward the $1 billion mark, with each brand posting about $800 million in sales in 2022. Rice Krispies Treats sales were about $500 million. The company said that these three brands, along with Pringles and Cheez-It, made up half of Kellanova’s sales in 2022.