What’s Going on With Kellogg’s Cereal Business?

At the pandemic’s start, Kellogg’s (NYSE:K) made a remarkable milestone. It managed to sell various of its lesser-known brands to the masses. At the same time, it added lots of fast-growing ones to its catalogue.

Right then, these actions gave investors lots of hope for the leading brand. But nowadays, the company has been failing to meet general expectations. What’s all this about?

Kellogg’s Implements a New Measuring System, and It Helps a Lot

A pandemic-based economy is nothing short of unpredictable.

To give you an example, many food-based companies saw a boom right at the start of it all. After all, people had to account that they were now tied up to their homes.

But as time went on, these companies’ numbers became more discreet. Even if that wasn’t a bad thing in comparison, many investors took these decreases as a bad sign.

In Kellogg’s case, the company grew by 7% in 2020. Fast-forward to 2021, and it only grew by 3%. Again, it’s still a decent amount, and it just wasn’t what some people had come to expect based on Kellogg’s most recent performances.

With that knowledge, Kellogg’s has made a change in its system. A change meant to account for the unpredictability of the pandemic. From now on, it would manage its finances by two-year periods.

That being said, its current two-year compound annual rate shows a sales growth of 5%. With (or without) a pandemic, this is healthy growth. In essence, Kellogg’s market performance is playing relatively well. 

Nonetheless, we still recommend that you keep a close eye on any one-time events that might affect the way of things. While this new initiative does help the situation, you do not want to miss out on anything that might get lost due to the new system.