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Kellogg considers selling its fruit snacks and cakes company

The food manufacturer on Monday said it is considering selling their cakes and fruit-snack businesses, including Keebler, Famous Amos and other brands, to focus on products with faster growing sales. It is the latest reviewer to reconsider its assortment that American consumers buy healthier snacks and fresher foods. J. M. SmuckerCo. Earlier this year, Pillsbury baking mixes sold to a private equity company for $ 375 million, including debt. Nestlé SA sold its American candy store, including the butterfinger and baby ruth brands, to Ferrero International SA for $ 2.8 billion. Conagra BrandsInc. and General MillsInc. has said that they are planning to divest trademarks that are not the core of their companies. and Campbell SoupCo. is also looking for a buyer for its international cake brands and for a fresh juice and carrot that did not fit seamlessly in its portfolio of canned and packaged products. Active investors like Third Point LLC, which have a stake in Nestlé and Campbell, have encouraged these reviews. But long-term food producers are still faced with a challenge to try to generate robust growth in boxed and preserved products, which in many cases do not match the tastes of today's consumers. Some companies, including General Mills Inc. and Unilever PLC, saw sales of its largest brands have recently improved after selling other brands to deepen their focus. Kellogg said it had not been prioritized to invest in marketing and innovation for the brands of cakes and fruit snacks in recent years. Selling them…

The food manufacturer on Monday said it is considering selling their cakes and fruit-snack businesses, including Keebler, Famous Amos and other brands, to focus on products with faster growing sales.

It is the latest reviewer to reconsider its assortment that American consumers buy healthier snacks and fresher foods.

J. M. Smucker
Co.

Earlier this year, Pillsbury baking mixes sold to a private equity company for $ 375 million, including debt. Nestlé SA sold its American candy store, including the butterfinger and baby ruth brands, to Ferrero International SA for $ 2.8 billion.

Conagra Brands
Inc.

and

General Mills
Inc.

has said that they are planning to divest trademarks that are not the core of their companies.

and

Campbell Soup
Co.

is also looking for a buyer for its international cake brands and for a fresh juice and carrot that did not fit seamlessly in its portfolio of canned and packaged products.

Active investors like Third Point LLC, which have a stake in Nestlé and Campbell, have encouraged these reviews. But long-term food producers are still faced with a challenge to try to generate robust growth in boxed and preserved products, which in many cases do not match the tastes of today’s consumers. Some companies, including General Mills Inc. and

Unilever

PLC, saw sales of its largest brands have recently improved after selling other brands to deepen their focus.

Kellogg said it had not been prioritized to invest in marketing and innovation for the brands of cakes and fruit snacks in recent years. Selling them would enable the company to “bring a sharper focus on its core business,” Kellogg said in a statement. The companies sold have about 900 million dollars in annual sales.

In addition to cereals like Frosted Flakes, Battle Creek owns Mich. -Based Kellogg also Pringles, Pop-Tarts, Cheez-Its and other brands.

Grain sales have been a consistent problem for Kellogg in recent years. Kellogg’s CEO Steve Cahillane, who joined the company about a year ago, has struggled to stop selling well-known brands like Special K.

“It’s so hard when you have big consumer brands that do not grow or decrease return to growth, “said Cahillane in an interview last month and noted the progress he has made with grain sales recently.

Mr. Cahillan’s focus on single-serve snack packages increased sales in the third quarter, but damaged profits, Kellogg said on October 31

and sent the shares by 9% that day.

Kellogg bought Keebler Foods Co. for $ 3.86 billion in 2001, tripled its debt burden and hit it against Nabisco, whose brands such as Oreo and Chips Ahoy long dominated the cookie trap.

Nabisco, now owned by

Mondelez International
Inc.,

dedicates a lot of money and resources to get dealers to showcase their products prominently and to develop new flavors and varieties.

Kellogg also said Monday that it will reorganize its North American device to be more flexible and better allocate resources. The company said it would invest in e-commerce capacity, consolidate its supply chain and combine several sales groups.

Write to Annie Gasparro at [email protected] and Micah Maidenberg at [email protected]

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