Seven years in the same job represents a pretty good run for a chief executive these days.
That is especially the case when it is in a company facing plenty of challenges, such as Kellogg Co, the US breakfast cereals behemoth.
On Thursday it announced that John Bryant, its current CEO, will step down from next Monday after a seven-year stint in the role.
He will be replaced by Steven Cahillane, currently CEO of Nature’s Bounty, the nutritional supplements maker and a former executive at Coca-Cola.
The appointment tells you a lot about where Kellogg has come from and where it is heading.
The $22bn company, whose products can be found in almost every kitchen cupboard in America and the UK, has found the going tough during recent years in common with lots of other ‘Big Food’ businesses such as Kraft Heinz, Hershey, General Mills and Mondelez, the owner of Cadbury.
Changing consumer tastes, in particular a growing preference among millennials for local products or food that can demonstrate real provenance, has put decades-old food manufacturers under pressure to move with the times as traditional packaged food brands have lost popularity.
That has certainly been the case for Kellogg’s.
While generations of Americans and Britons have grown up with staples such as Corn Flakes, Rice Krispies and Special K, these brands have come under particular pressure as more people eat breakfast on the go, opting for cereal bars and sandwiches that they can chow down on their way to work.
The growth in coffee shops like Starbucks and Costa Coffee and the aggressive way that McDonald’s has ratcheted up its breakfast offering have contributed to that change.
Breakfast cereals have also become viewed by some consumers, particularly younger ones, as stodgy.
And, where cereals have maintained their place in kitchen cupboards, brands like those owned by Kellogg’s have found themselves supplanted by cut-price own-label versions produced by the supermarkets.
The solution deployed by Mr Bryant, an Australian who has worked for Kellogg’s for nearly 20 years, was to gradually manoeuvre the company into a situation where it was less dependent on the breakfast cereal market by bulking up its position in the snack market.
Image: Kellogg’s has had to work hard to prop up the position of cereal brands like Special K
Kellogg already owned Keebler Foods, America’s biggest cookie and cracker maker, which it bought from Britain’s United Biscuits in 2001.
To that, Mr Bryant added Pringles, the ‘stackable snack’ brand, which was bought in 2012 for $2.7bn from Procter & Gamble, which invented the product 50 years ago.
That deal made Kellogg’s the world’s second largest savoury snacks manufacturer after PepsiCo, the owner of Walker’s Crisps in Britain and the maker of Lay’s, the US crisp brand.
Mr Bryant has also had to work hard to prop up the position of the cereal brands, none more so than Special K, which enjoyed huge growth in the first few years of the century as customers opted for low-fat, low-calorie foods.
He recently told investors: “Unfortunately, consumers don’t want to count calories anymore and fat is no longer as negative as it once was. So we had to change the positioning of Special K from weight management to inner strength…we’ve had to renovate the foods.”
This has, for instance, seen new versions of the product such as Special K Nourish with extra fruit, nut and grains – while with some of its other cereal brands, Kellogg’s is seeking to emphasise the simplicity and natural ingredients in its products.
Mr Cahillane, who had only been at Nature’s Bounty for three years and who had previously headed Coca-Cola’s largest and most important division in North America, will be expected to continue in that process.
There are also clues in his CV to suggest he might also be quite nimble at spotting the next big thing: as a young man, after few years working for the California-based winemaker E&J Gallo, he founded his own microbrewery, Chicago-based State Street Brewery, putting him firmly at the cutting edge of one of the most significant changes in consumer behaviour in the US during the last half-century.
Investors will certainly be hoping so.
Kellogg’s, which was founded in 1906, is one of America’s most dependable companies, having increased its dividend to shareholders in each of the last 12 years.
It is a record of which the company is proud.
It recently reminded investors that, since 1925, it has made no fewer than 371 dividend payments.
Source: SKY News