Associate Partner Aaron Chio Speaks on Recent Kellogg Company Reconfiguration
Clarkston Consulting’s Aaron Chio, Associate Partner and Strategy and Innovation Lead, was recently featured in Benzinga for the recent split of Kellogg Company. Read a few highlights below or the full article here.
June 21, 2022 | Durham, NC
Analysis: Why Did Kellogg Company Reconfigure Itself by Creating Three Businesses
Today, Kellogg Company separated into the following three new independent and publicly-traded businesses: Global Snacking Co., North American Cereal Co., and Plant Co.
Aaron Chio, Associate Partner at Clarkston Consulting shared his expertise on the topic, noting that Kellogg’s strategy is not uncommon for large corporations with diverse brands and divisions. He also pointed out that plant-based business is fast-growing, compared to the stable, slower category of cereals, so this split allows the company to position them individually for where they will thrive.
“It’s a pretty standard move that you see a lot in across many different organizations,” he said. “Kraft is a great example – they did something similar years ago, and typically what ends up happening is that you have different performing divisions inside an organization where some may be faster growing and some are slower growing, some that are more profitable, some that are less profitable, and the companies will end up spinning off these divisions so that they can get a better return to their shareholders. Otherwise, what’s happening is you’re getting an aggregate of everything as a return as a shareholder.”
Chio added: “What you want to do is let the really good brands shine and then manage your slower growing but still-successful cash cows in a very different way than you would manage a fast-growing business that requires different types of investments.”