Kellogg's board appoints new CEO for struggling cereal maker
- Kellogg announced that John Bryant is stepping down as CEO, according to a press release. Bryant, who served as chief of the struggling CPG company for seven years, says he will retire.
- Kellogg’s board appointed Steven Cahillane, formerly president and CEO of Nature’s Bounty, as the company’s new CEO. Cahillane also has held executive roles with Coca Cola and AB InBev.
- “Steve possesses strong strategic thinking ability, understands the levers that drive business performance and has demonstrated an ability to build and inspire outstanding teams,” Donald Knauss, lead director of Kellogg’s board, said in the release. “Steve is the right person to energize our teams and bring new thinking to our company as we seek to achieve our long-term growth objectives."
In his three years as CEO of health and wellness company Nature’s Bounty, Cahillane aligned the business with prominent market trends, established a successful e-commerce channel and delivered returns for shareholders, according to a Kellogg statement.
Prior to his stint there, Cahillane built up an impressive resume in the beverage industry. He spent seven years with Coca-Cola, most recently as president of Coca-Cola Americas, and eight years in various leadership positions with AB Inbev, including chief commercial officer. In 1995, Cahillane founded State Street Brewing in Chicago, which he then sold to Coors Distribution two years later.
Cahillane takes over a company that has struggled with sales in recent years as its core snack and cereal products have lost favor with consumers. Kellogg has reformulated many of its brands and focused on marketing fresh, all-natural ingredients.
These efforts have produced some wins — the company’s Eggo waffles, which are now free from artificial colors, have seen increased sales lately; it's reportedly gaining market share in toaster pastries following the release of Jolly Rancher Pop-Tarts; and the Kashi brand also is gaining share in cereal. But overall, Kellogg is struggling to stay relevant at a time when more consumers are shopping the perimeter of the store, buying prepared foods and meal kits.
Kellogg has managed to produce returns for its shareholders by cutting costs, including layoffs and an overhauled model for its snack distribution, but questions remain about the long-term viability of this strategy. While it's good the manufacturer is able to weather slower sales by streamlining its internal operations, there may come a time when there's nothing left to cut.
Kellogg also is putting resources behind its e-commerce efforts, including a direct-to-consumer program. Kellogg reported that its U.S. e-commerce sales grew by 70% in its most recent quarter, and its global experience suggests it could capture more share through grocer’s expanding online shopping platforms than in stores.
Kellogg will no doubt look to Cahillane to continue cutting costs while looking for pockets of growth. In the meantime, the CPG giant can take some comfort in the fact that it’s struggles are far from unique these days. Hershey, General Mills and Mondelez have all named new chief executives this year. While it's uncertain what strategies Cahillane will employ to turn Kellogg around, one thing that is for sure: it's not going to be easy give the challenges facing the packaged food industry.
Follow Jeff Wells on Twitter