Kellogg’s looks to new products to drive sales
KELLOGG’S has been focusing on new product development in an effort to turnaround declining sales.
Newly-filed accounts from the US group’s Kellogg Marketing and Sales Company (UK) division – which reflects income from retail sales – show revenues slipped from £631.4m to £614.9m in the year to December 2012.
Sales have been on a downward trend since 2010 when they reached high of £666.7m. However, pre-tax profits increased last year, from £12m to £16.1m, helped by lower administrative costs.
In their report the directors said they were operating in a tough environment but a focus on new product lines could help drive future sales.
“The future outlook remains challenging given the tough economic climate and intense promotional pressure within the cereal, cereal snacks and crisp categories,” they said.
“During 2012 significant changes have been made to return the company to growth. This includes developing stronger commercial plans on existing brands and launching a significant number of new products developed within the broader Kellogg group.
The world-famous maker of Cornflakes has a long history in the North West having set up a manufacturing base in Trafford Park 75 years ago. Around 335 people are employed in the sales and marketing arm while a further 1,070 work for the manufacturing business, Kellogg Company of Great Britain.
Its accounts show it invested £26m last year as part of an efficiency drive which also includes voluntary redundancies and shift changes. Its focus is on securing the renewal of a manufacturing contract with Kellogg Europe Trading which ends on December 31. Turnover grew from £107.1m to £121m and pre-tax profits were level at £10.1m after stripping out a £21m one-off dividend from subsidiaries in 2011.
The top company for both entities is the Kellogg UK Holding Company. Its direct parent is the Luxembourg registered Kellogg Group, however the ultimate parent is the New York Stock Exchange-listed Kellogg Company. The group could not be reached for comment at the time of publication.
