About Doug Vandevelde
In a September 2024 interview, WK Kellogg CEO Gary Pilnick discussed the company's strategy following its spin-off from Kellanova, emphasizing a singular focus on cereal. Pilnick stated that the independence allows the company to make decisions solely in service of the cereal category, including a planned $450 to $500 million investment to modernize its supply chain, which he said is intended to drive expanded margins and support top-line growth. He noted that the company's sales force will exclusively sell cereal, which he argued will help them better understand the category and convert shoppers into buyers.
Pilnick addressed perceptions of the cereal category, describing it as "terrific" and "very competitive" with strong branded competitors. He said the company's portfolio covers taste, balance, and health and wellness needs, and that the category is "as big as we ever remember." Responding to concerns about sugar content, Pilnick stated that WK Kellogg has been reducing sugar in its cereals by double-digit percentages and claimed that cereal eaters get no more sugar in their diets than non-cereal eaters. He also said there are "misperceptions" about the category, asserting that cereal is a healthy, nutritious option for consumers.
Source: AI-verified profile updated from Doug Vandevelde's recent appearances.
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Transcript (13 segments)
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Narrator0:00
The NYSE. The stock down yesterday, continuing the losses today. Down about 5%. Tough market.
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Interviewer0:05
Here with us at Post 9 in a first on KRCNBC interview is WK Kellogg CEO Gary Pilnick. He brought a lot of characters from cereals we know. Welcome.
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Gary Pilnick0:17
Thank you for having me.
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Interviewer0:19
So, you're getting rid of Pringles and Pop-Tarts and just focusing on cereal. What is that going to allow you to do?
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Gary Pilnick0:28
That will allow us to be a stronger company because we're independent. At the end of the day, everything we do is in service to cereal. We have a strategy to create — none of the key pillars would have been done but for the spin. Now we get to make decisions with a singular focus on what is the best way to invest in and drive the cereal for WK Kellogg.
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Interviewer0:54
What does that mean? Does it mean innovation, acquisitions?
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Gary Pilnick1:00
It's a combination of five separate businesses. At the Kellogg Company we had a business in the Caribbean, Canada, food away from home that was scaled up across seven different categories, Bare Naked, and U.S. retail. All that will come together. Think about the opportunity to harmonize across the business, but also scale up big ideas. We get all the consumer and customer insights under one leader who can drive the business accordingly. Another place we go to is for focus. We have a great sales force. It's well known within the industry and it sells several different categories. Our sales force will have the same coverage. They're only selling cereal. In the moment of truth, our cereal salespeople will understand that category as well if not better than everybody to help convert shoppers into buyers. The last thing I'll go to is our ability to invest and use our balance sheet the way we want to. We want to invest $450 to $500 million to modernize our supply chain. Now, that's the centerpiece to our plan, to drive expanded margin. It should also help our top line as well.
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Interviewer2:04
Isn't cereal a tough category? It's been in secular decline for years now, hasn't it?
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Gary Pilnick2:09
Cereal's a terrific category. It's a very competitive category. Always has been. There are tremendous competitors out there. Great branded competitors. So, yeah, this is not going to be easy, but we know we've got the strategy to go after this. Our view is because we're going to be investing the way we're investing, we think the company that invented the category can do something pretty special going forward.
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Interviewer2:32
In that regard, though, 100-plus years in this category, cereal over that period of time, I mean, it started out as being kind of like a health food, right? I mean, that was the idea. And then it's waxed and waned in terms of its perception of healthiness and if that's what you want to prioritize in your diet. Do you wait for it to come back into fashion or for customer habits to change?
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Gary Pilnick2:55
We have a portfolio that hits a lot of consumer needs. We have taste, balance, and health and wellness. We're the leading brands in each one of them. We have something for everybody. I would also say, I believe there's a misperception about the cereal category. It's not a monolith. You walk down that aisle, it's durable, big. It's as big as we ever remember, that category. There's not one adjective to describe an entire cereal category but there are some misperceptions. It's a healthy, nutritious option for consumers.
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Interviewer3:26
Tony the Tiger, Frosted Flakes, the Fruit Loops, I grew up with these but they're sugary and I don't feed them to my kids.
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Gary Pilnick3:43
We have been taking out the sugar and double-digit declines of sugar in those cereals. Cereal eaters get no more sugar in their diets than non-cereal eaters. They also get more...
