Kellogg Acquires Egyptian Breakfast Cereal Maker
Company’s Strategy to Expand in Emerging Global Markets
In its latest move to expand its footprint in the African market, Michigan-based breakfast food and snack giant Kellogg has paid $50 million to acquire Egypt’s Mass Food Group, the first to introduce packaged cereals to its country’s consumers.
Family-owned Mass Food, founded in 1996, generated $18 million in sales last year and exports its Temmy’s and NutriFit cereals to more than 30 markets elsewhere in Africa, plus several Asian and European countries.
“Mass Food Group’s manufacturing capabilities, established local brands, and sales and distribution infrastructure will help unlock the growth potential of the cereal category in the key markets of Egypt and North Africa,” said Kellogg in a statement.
Battle Creek, Michigan-headquartered Kellogg – maker of such iconic brands as Frosted Flakes, Special K, Pop Tarts, Raisin Bran, Rice Krispies and Corn Flakes – has increased its emerging market business threefold over the last decade increasing production capacity in markets like Thailand, India, Malaysia and Poland to meet demand in emerging regional markets.
Earlier this year, the company bought a majority stake in Egypt’s Bisco Misr, one of the largest baked goods companies in the country.
In early September, Kellogg announced a joint-venture with Tolaram Africa – a subsidiary of the Singapore-based Tolaram Group – to produce snacks and breakfast foods to sell in West Africa, and said it would pay $450 million to buy a 50 percent stake in Lagos, Nigeria-based Multipro, a food sales and distribution company operating in Nigeria and Ghana.
The company’s 2012 acquisition of the Pringles snacks brand from Procter & Gamble has proven to be its most important acquisition in emerging markets. The potato and wheat-based stackable snack chips are now Kellogg’s second-largest brand with positive growth in all the regions in 2014 and continuing growth so far in 2015.
Global sales of Pringles alone have more than doubled Kellogg’s international snacks business and tripled its size in certain key emerging markets, the company said.
US goods deficit with China—no end in sight