Bluefield Daily Telegraph, Bluefield, WV

Lifestyles

September 24, 2012

Kellogg wants China to wake up to its cereal

(Continued)

French said cereal companies are finding greater success selling breakfast bars, which don't require milk and can be marketed as energy boosters for white-collar workers.

Kellogg nevertheless sees potential for growth. The Chinese market for cereal is expected to reach $225.4 million this year, more than double what it was five years ago, according to Euromonitor International. That's still just a fraction of the U.S. cereal market, estimated at $9.99 billion.

A representative for Kellogg said the company already sells brands including Frosted Flakes, Rice Krispies and Special K in China.

General Mills Inc., the maker of Cheerios and Wheaties, already has a joint venture with Nestle, called Cereal Partners Worldwide, to sell several of its cereals in China.

With Pringles, which is sold in more than 140 countries, Kellogg is also looking to move beyond the breakfast table. The Pringles deal catapulted Kellogg to the world's second-biggest salty snack maker, after PepsiCo Inc.'s Frito-Lay.

Although Pringles already has a broad presence in China, Frito-Lay has been much more aggressive in offering flavors that appeal to the Chinese, said the Mintel analyst, French. Those include seafood flavors popular in various regions, as well as foreign flavors such as "Italian Ham" and "Texas Steak" that the Chinese might find exotic, French said.

This isn't Kellogg's first attempt to expand in China. The company bought Zhenghang in 2008 but sold the Chinese snack food maker earlier this year after a review of its position in the country.

Kellogg plans to start operating its joint venture with Wilmar in China by Jan. 1, pending regulatory approvals. Wilmar International is a unit of Yihai Kerry Investments Co. Ltd.

For now, Europe remains Kellogg's largest international market. But the company is seeing weakness in the region, with its international sales in the second quarter down 3.8 percent.

Shares of Kellogg rose 31 cents to $51.76 in afternoon trading.

___

Text Only
Lifestyles
BBQ My Way
Viral Video and Slideshows
Facebook