Kellogg Gets A Boost From Pringles In 3Q

CANDICE CHOI

NEW YORK (AP) ⿿ Kellogg's appetite for salty snacks is helping fatten its profits.

The world's biggest cereal maker ⿿ best known for its Frosted Flakes, Pop-Tarts and Eggo waffles ⿿ says its recent acquisition of Pringles chips boosted its net income in the third quarter. Kellogg Co., based in Battle Creek, Mich., bought the brand earlier this year in hopes of becoming a global player in the salty snacks market. The deal instantly made Kellogg the world's second-biggest salty snack food maker, behind only PepsiCo Inc.'s Frito-Lay.

In the U.S., the company said Pringles sales rose by 10 percent in the quarter.

A big part of that growth was driven by improved displays in supermarkets and expanded distribution in dollar stores, drugstores and other channels, CEO John Bryant said in an interview with the Associated Press. He noted that Pringles' profile wasn't being optimized under its previous owner, Procter & Gamble Co., the maker of consumer products that exited the food business.

As for keeping pace with Frito-Lay in terms of new products and flavors, Bryant said Kellogg will be limited in the near term because Pringles only has two major manufacturing plants in the world. Those plants ⿿ in Tennessee and Belgium ⿿ are already running around the clock. As a result, he said the company will focus on improving production capacity at the plants, rather than focusing on new products. An expansion of production capacity could come in another year or two, he said.

Since Pringles gets two-thirds of its revenue from overseas, Kellogg is also hoping Pringles can give it inroads into the emerging markets where the ranks of people with disposable income are growing. The company's stable of other salty snacks include Cheez-Its and Special K crackers.

For its flagship U.S. breakfast foods unit, the company said net sales rose 5 percent, with new products such as a chocolate-filled cereal called Krave helping it gain market share in both cereals and breakfast pastries. Like Special K with berries, the cereal was first introduced in France, where Bryant said customers' taste expectations are higher.

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