Kellogg posts 25.7% rise in full year profits even as it projects slowed demand in 2021

US – The Kellogg Company enjoyed a unusually strong, Covid-related growth in 2020, resulting in 25% rise in full year operating profits.

The company’s profits for the year amounted to US$1.76 billion, a strong appreciation compared to the 17.8% drop recorded in Kellogg’s last set of full-year results.

The American multinational food company has however forecasted a decrease in organic net sales for 2021, as demand declines relative to the “unusually strong, Covid-related growth” of the prior year.

The company recorded 6% growth in organic net sales in its 2020 full-year results but forecasts a fall of about 1% for this year.

Reported net sales, which include the impact of divestiture and currency, were up 1.4% year-on-year to US$13.77 billion, as elevated at-home demand sustained by the pandemic offset impacts from adverse currency translation and business divestitures in 2019.    

On an organic basis, Kellogg Latin America saw the strongest growth in net sales, which were up approximately 12% on the previous year, with snacks, cereal and frozen foods all seeing growth.

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However, adverse currency translation meant that reported net sales saw a low-single-digit decline.

“As the original wellbeing company and one of the largest plant-based food companies, we’re excited to help make the best ideas out there a reality. No doubt, we’re stronger together than any of us is alone.”

D’Anne Hayman, vice president of Global Innovation and Nutrition at Kellogg

In North America, Kellogg saw an increase of approximately 5% in organic net sales as elevated at-home demand during the Covid-19 crisis more than offset declines in away-from-home channels.

On an organic basis, net sales in Europe increased by more than 5%, on the back of elevated demand for the company’s cereals during the pandemic.

Kellogg Asia Pacific, Middle East and Africa recorded an approximate 8% increase in organic net sales.

The unit saw strong growth in cereal, noodles and Pringles, as well as across multiple markets.

 “The year 2020 was a year unlike any other, one in which the world faced unprecedented challenges,” said Steve Cahillane, Kellogg Company’s chairman and CEO.             

“With the priorities of keeping our employees safe, supplying food to the marketplace and aiding our communities, we have managed well through the pandemic, while also delivering exceptional results.”

Earlier this month, Kellogg in partnership with Future Food-Tech launched an Innovation Challenge with an aim of giving new talent in the industry a chance to develop their ideas on a “big virtual stage”.

Kellogg said it is looking for start-ups with unique plant-based ideas that support digestive wellness  to join the challenge.

The startups would be expected to apply their entrepreneurial and scientific skills to show how their technology could help solve the problem and deliver tangible value to consumers.

“As the original wellbeing company and one of the largest plant-based food companies, we’re excited to help make the best ideas out there a reality. No doubt, we’re stronger together than any of us is alone,” D’Anne Hayman, vice president of Global Innovation and Nutrition at Kellogg said.

Looking into the future, Cahillane said; “We enter 2021 with solid momentum, and I remain confident that Kellogg will emerge from this pandemic a stronger company.”

“We’ve enhanced capabilities, reached incremental households, invested in our supply chain and improved our financial flexibility. We are on sound footing for continued balanced financial delivery.”

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