Kellogg Company

• Date Founded: 1900
• Industry: Food consumer products
• Corporate Headquarters: Battle Creek, Michigan
• Type: Public

Kellogg Company makes some of the most recognized cereal brands sold around the world, including Kellogg’s Corn Flakes, Rice Krispies, Special K, and Frosted Flakes. Kellogg also owns several other popular product lines, including Keebler cookies, Cheez-It crackers, Eggo frozen waffles, Morningstar Farms vegetarian products, and Pringles crisps.

The company had its origins in the work of Will Keith Kellogg and his brother Dr. John H. Kellogg, who ran a sanitarium in Battle Creek, Michigan. The two men developed a method for flaking corn grit and toasting the resulting product to crisp it. In 1906, W. K. Kellogg founded the company that still bears his name, selling the flakes with a stylized version of his signature on the box—the origin of the company’s logo. The product launched the dry cereal industry. By the 1920s, Kellogg expanded his product line and changed the name to the Kellogg Company. That change was prompted partly by a legal fight between Will and his brother John. W. K. Kellogg won the right in court to use the family name but had to yield the Toasted Corn Flakes name to his brother John. The two brothers stopped speaking to each other following the court battle.

With more than $14.5 billion in sales in 2014, Kellogg ranked 210th in the Fortune 500 rankings of US corporations. This ranking placed it well behind such food industry giants as Archer Daniels Midland (sales of more than $81 billion) and PepsiCo (sales of more than $66 billion). It also trailed close competitor General Mills, which also focuses its business on cereals, and had nearly $18 billion in revenue in 2014. By 2022, Kellogg was ranked 258th on the Fortune 500 list.

History

Dr. John Kellogg was a vegetarian who promoted grain-based diets for good health. In 1898, he and his brother accidentally developed a process for turning wheat berries into flakes. Two years later, they formed the Sanitas Food Company and began making flaked corn, which was served to patients at the sanitarium and proved popular. In 1906, W. K. Kellogg became the sole owner of the new Kellogg Toasted Corn Flakes Company.

In 1914, Kellogg opened a factory in Canada and began using a packaging innovation, placing cereal in wax paper to prevent moisture from destroying its crispness. The company added high-fiber Bran Flakes the following year and All-Bran the year after that. In the 1920s, the company expanded to both the United Kingdom and Australia and introduced Rice Krispies. In 1923, it hired a home economist and ventured into nutritional science.

During the Great Depression, W. K. Kellogg refused to cut back on operations. He reduced the workday to six hours, added a fourth shift, and hired more workers. He also increased advertising, including running ads over the radio. Many of these ads were aimed at children rather than at parents in the hopes of generating demand in the market. In 1930, Kellogg formed the W. K. Kellogg Foundation, which was committed to promoting children’s health. In 1938, the founding Kellogg brother retired from the company.

During the 1940s, Kellogg’s factories produced K-rations (not named for the company) for the US military. The company also continued to produce consumer products, introducing Raisin Bran in 1942. In the 1950s and 1960s, the company introduced new brands that became widely popular, including Frosted Flakes; Cocoa Puffs; Special K, a high-protein cereal; Froot Loops; and Product 19, a fortified cereal. Kellogg also expanded into new areas around the world.

The 1970s saw growth by acquisition and by expansion, as Kellogg bought Fearn International, maker of Eggo frozen waffles and the Mrs. Smith’s frozen pie line. The company also began publishing more nutritional information on its products’ packaging. The company met stiff competition for its cereal products in the 1990s as store brands and generic products began to chip away at its market share. As a result, snack foods and other products became more important to company survival. In 1997, the company opened the W. K. Kellogg Institute for Food and Nutrition Research, using it as a research and development arm for new products.

In the early years of the twenty-first century, Kellogg diversified by purchasing Keebler, a maker of cookies and crackers. The $4.56 billion deal was followed by others, including the purchase of Kashi Company, which makes health foods, the snack industry giant Pringles, and food manufacturers in Russia and China. These and other acquisitions led Kellogg to increased revenue growth and to the company's decision in June 2022 to separate three of its businesses into independent companies. Leaders believed the new companies, including a global snacking company, a North American cereal company, and a company focused on plant-based foods, would be better positioned to focus on their individual strengths and continue to grow in value. In 2023, Kellogg modified those plans based on market analysis and kept the plant-based foods division within the global snacking company Global Snacking Co. The two remaining divisions were formally renamed WK Kellogg Co. and Kellanova.

Seeking to burnish its image of corporate responsibility, Kellogg gave 3.5 million pounds of cereal, worth $10 million, to the hunger-relief charity Feeding America in 2009. Later, the company entered into an agreement to work toward a food industry goal of reducing Americans’ caloric intake as part of the Healthy Weight Commitment Foundation. Kellogg's charitable efforts continued during the twenty-first century. In 2022, the company provided food to 28 million people in need, reaching over 1 million children through feeding programs, and volunteering more than 12,000 hours in local communities. Additionally, the company engaged 369 million people in advocating for sustainable and equitable food access. These contributions built on Kellogg's long-term impact since 2015, which included feeding over 247 million people, reaching 5 million children, logging 130,000 volunteer hours, and engaging 1 billion people globally.

Impact

One measure of Kellogg’s impact is its contribution to creating the demand for breakfast cereal, a food it helped popularize. By the second decade of the twenty-first century, however, Kellogg, like other major food manufacturers, faced the challenge of the growing popularity of organic and minimally processed foods. It also faced another challenge: the growing trend of consumers to skip breakfast. By the beginning of the twenty-first century, cereal represented little more than half of the company’s sales. In 2014, company management downgraded its growth goals to as low as 1 to 3 percent annually while also pursuing a cost-cutting initiative that it hoped would revive profitability. In late 2017, shortly after the company had transitioned to a new CEO, Steven Cahillane, who had previously served as CEO of the vitamin and supplement manufacturer Nature's Bounty, Kellogg announced the acquisition of the entrepreneurial and increasingly popular nutrition bar company RXBAR. These steps reflected the company’s increasingly difficult environment and its efforts to shift some of its products toward the demand for healthier food options.

Kellogg has been challenged on some of its product sourcing practices, and it has also been criticized for its advertising. For instance, environmental activists in Indonesia complained that the company bought palm oil grown by producers whose practices contributed to rainforest destruction. In response, in 2014, Kellogg announced that it would only purchase palm oil produced in sustainable plantations that respected human rights and the environment. In 2009, the Federal Trade Commission (FCC) chastised the company for an advertising claim suggesting that children who ate Frosted Mini-Wheats had improved attention spans. The following year, the FCC ordered Kellogg to change its advertising claiming that Rice Krispies provided 25 percent of the antioxidants as well as certain vitamins that children needed. At the same time, Kellogg boosted the fiber content of many of its cereals, including the Froot Loops brand. The company encountered further controversy in 2022 when the UK government enforced new regulations to ban the advertising of junk food on television and included Kellogg cereals in its list of "less healthy" foods. Kellogg's legal challenge against the regulations was later dismissed in court.

In the mid-2020s, Kellogg faced several legal challenges. In Hadley v. Kellogg Sales Co., a class-action lawsuit alleged that Kellogg’s packaging misled consumers by promoting products like Raisin Bran and Frosted Mini-Wheats as “healthy” despite their high sugar content. The court ruled partially in favor of the plaintiff, granting Hadley’s motion for partial summary judgment while denying Kellogg’s.

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