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Kellogg manufactures and markets cereal and convenience foods. Co.'s key products are cereals and convenience foods such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Co.'s cereal products are generally marketed under the Kellogg's name and sold to the grocery trade via direct sales forces for resale to consumers. Co. also markets cookies, crackers, crisps, and other convenience foods, under brands such as Kellogg's, Keebler, Cheez-It, Murray, Austin and Famous Amos. Co. operates the following segments: U.S. Morning Foods; U.S. Snacks; U.S. Specialty; North America Other; Europe; Latin America; and Asia Pacific.



Kellogg’s economic moat is dug by a strong and focused brand portfolio. K commands a 30% market share in breakfast cereal with brands such as Frosted Flakes, Corn Flakes, Rice Krispies, and Froot Loops. Acquisition of the Pringles brand from P&G has tripled Kellogg’s international snack division.   The company does operate in a highly competitive marketplace.



Although Kellogg’s stock has been flat for the last year it is still trading near a multi-year high.  Kellogg’s image is probably benefiting from recent acquisitions of  Kraft Foods & H.J. Heinz. Kellogg’s is facing changing breakfast preferences of the consumer. Kellogg is revamping its product portfolio to meet the changing dynamics in the breakfast category. Recent breakfast additions include Special K flatbreads, Eggo breakfast sandwiches, and a number of ready-to-drink breakfast products. It may take some time for these new products to gain traction. This stock is untimely, and the recent run-up on speculation of a possible merger or acquisition discounts a good deal of the earnings growth we envision to 2018-2020. That said, Kellogg stock does remain a decent option for those accounts stressing income. 



  • Strong brand portfolio aided by appropriate investments on brand building

  • Focus on product innovation helps to retain customers and improves the product mix

  • Consistent revenue and profit growth 


  • Frequent product recalls could hamper brand image

  • Geographic and customer concentration 


  • Increasing private label penetration Intense competition and changing global retail scenario

  • Rising commodity costs may negatively impact the company's profitability

  • Increase in food safety regulations 


  • Growing breakfast cereals market in the US

  • Local focus to drive sales in developing and emerging markets 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  


The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.


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