How Will Kellogg’s New CEO Influence Product Innovation?

Battle Creek, Mich.-based The Kellogg Co. recently named Steven Cahillane as the company's new CEO, replacing John Bryant, who stepped down after seven years at the helm of the cereal and snack maker. Bryant will continue as executive chairman of the board until March 15, 2018.

Cahillane most recently was president and CEO of Bohemia, N.Y.-based The Nature’s Bounty Co., a vitamin and nutritional-supplement manufacturer, and he has held senior positions with The Coca-Cola Co., most recently as president of Coca-Cola Americas. He was also affiliated with beer giants Coors and Anheuser-Busch InBev. 

The move coincides with Kellogg’s shift from processed foods toward reformulating brands such as Special K cereal, which will soon be infused with probiotic ingredients. Competitors such as General Mills and Post have also cut costs and changed strategies as consumer trends shift.

“Kellogg is an incredible company with a rich legacy and iconic brands that are beloved around the world,” Cahillane said in a press release. “It will be my privilege and honor to work with such a talented group of employees as we pursue the tremendous growth opportunities before us.”

Click through to learn more about Kellogg’s CEO transition, challenges and opportunities, and perhaps how a more indelible strategy emphasizing portable, functional and nutritional products could affect convenience retailers’ category-management endeavors for 2018. 

Kellogg's will always be a “cereal company at heart,” former CEO Bryant wrote in a guest column for the Battle Creek Enquirer earlier this year. But changes in food industry dynamics and consumer needs in recent years have “required us to think differently about our business, how we operate and the foods we make,” he said. 

A sign of shifting consumer preferences: Kellogg announced in August that it planned to cut 223 jobs at its ready-to-eat-cereal plant, representing nearly 10% of the company's Battle Creek workforce.

Cahillane is “known to possess strong strategic-thinking capability and understands the levers that drive business performance—he has demonstrated an ability to build and inspire outstanding teams,” according to Donald Knauss, lead director of Kellogg's board. 

He spent more than a decade in the beer industry, founding and later selling State Street Brewery in Chicago, moving on to Coors Distribution and then to beer giant A-B InBev. How will his entrepreneurial roots affect product mix?

At Nature’s Bounty, a global manufacturer, marketer and specialty retailer of health and wellness products, Cahillane successfully aligned the company with key health and wellness trends, established a thriving e-commerce division and created significant shareholder value.

As Kellogg has evolved, it has significantly expanded its snacks business in pursuit of growth opportunities that have emerged in the category. One example is the recent addition of Special K Cracker Chips, a hybrid snack between crackers and chips that creates a light and crispy texture for a cracker while delivering great taste, a good source of fiber and 2.5-3 grams of total fat per serving. 

One new lever for Cahillane to deploy within the morning daypart—even beyond it—is through Kellogg’s partnership with Moe’s Southwest Grill, a Mexican and Tex-Mex restaurant chain. Within the venture, Kellogg’s enters the frozen prepared-foods category via Moe’s Breakfast Bowls in five Southwestern-style varieties.