Kellogg Company November 13, 2018
Developed Markets – Cereal
Doug VanDeVelde, Senior Vice President, Global Breakfast Categories
November 13, 2018
Developed Markets Cereal
% of Company Net Sales, 2017 Pro Forma*
Total Kellogg Kellogg Developed Markets Cereal
* Adjusted to include a full year of Multipro, which was not consolidated into Kellogg results until May, 2018.
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Stabilizing Developed Markets Cereal
• An Important business
• Big, expandable brands
• Already stabilizing core international markets
• Signs of progress in the U.S.
• Investing now for stability over time
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An Enduring Category
• Enduring Attributes – taste, nutrition, convenience, affordability
• Versatile food – mixable, portable, meal & snack
• High household penetration – multiple boxes in the pantry
• Important for retailers – on shopping list, drives basket size
• Responds to brand building – innovation, A&P, low private-label share
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Shifts With Food Beliefs – Stable Over Time
RTE Cereal Category, U.S., Retail Sales Growth
+0.2% Fiber, CAGR Low-Calorie, 1997-2017 Low-Fat
1997 2017 Low-Carb Protein Diets
Source: Nielsen
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Cereal – Growth Through Occasions
Win Through Occasions Core is Breakfast Growth from Cereal as Snack
At Home Away from Home Snacking
• Cereal #1 food eaten * • Growing occasion • Big and growing occasions • Cereal only 15% of • Cereal underdeveloped • Cereal has low share, growing +DD * the total occasion • Benefits of cereal more advantaged
Grow share of Launch food and pack Launch food and pack occasion innovation innovation Amplify Health & Expand into new Communicate relevance of Wellness Channels brands for the occasions
* Aggregate of U.S., U.K., Canada, and Australia. November 13, 2018 6
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Developed-Market Cereal Playbook
Strong Brands • Advantaged portfolio • Strong commercial ideas/execution • Agile approach to media
Leading Innovation • Renovate the Core • Innovate into new on-trend spaces
Win-Win Customer Partnerships • Thought leadership on category growth • Execution of Perfect Store
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Already Stabilizing Australia Cereal
Strong Brands
Australia Cereal Growth Kellogg Net Sales, Currency-Neutral
Winning Customer Partnerships
Implemented Playbook
Leading Innovation 2015 2016 2017 YTD 2018
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Already Stabilizing U.K. Cereal
Strong Brands
UK Cereal Growth Kellogg Net Sales, Currency-Neutral Leading Innovation
Implemented Playbook
Winning Customer Partnerships 2015 2016 2017 YTD 2018
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Strong Brands – Deliver Across Segments
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Strong Brands – Stabilizing Special K
Stabilizing Special K Cereal Value Share Change vs YAG
Full Year 2017 YTD 2018
US Canada UK Australia
Source: Nielsen, through 9/29/18
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Strong Brands – Reinventing our Natural Brands
Key Natural Brands Share Change vs. YAG
Full Year 2017 YTD 2018
Kashi/Bear Naked Kashi (Canada) WK Kellogg (UK) Be Natural (US) (Australia)
Source: Nielsen, through 9/29/18
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Strong Brands – Amplify Health & Wellness
Clean Label Drive More Tangible Benefits
Eliminate Artificials: Stronger Wellness Claims:
Digestive Wellness: Reduce Sugar:
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U.S. is Lagging, But on its Way Toward Stabilization
Kellogg's “Core 4” Cereal Markets Share Change vs. YAG
Full Year 2017 YTD 2018
US UK Canada Australia
Source: Nielsen, Redslim, through 9/29/18
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Advantaged Portfolio – Growing Core 6 + Kashi
US Cereal - "Core 6" plus Kashi Change in Share Vs. Year Ago Source: Nielsen, through 9/29/18 Full Year 2017 YTD 2018
Total Core 6 Kashi
Core 6 Special K Frosted Flakes Raisin Bran Mini-Wheats Froot Loops Rice Krispies Kashi
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Applying the Playbook in 2019
Strong • Amplify Health & Wellness • Drive taste/fun Brands • Grow out-of-breakfast
• Digestive health Leading • Hyper-convenience Innovation • Strength & energy • Next-generation natural
Win-Win • Improve aisle shoppability With • Continue to regain distribution Customers
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Strong Brands in 2019
Amplify Drive Grow Health & Wellness Taste and Fun Evening Snacking
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Leading Innovation in 2019
Digestive Wellness / Microbiome Hyper Convenience
Happy Inside: Joyböl:
Strength & Energy Next Generation Natural
Special K Granola: Fitness:
GOLean/next gen Plant Protein:
NutriGrain Protein Squeezer: Kashi Kids (US):
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Improving Aisle Shoppability in 2019 – U.S.
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Improving Aisle Shoppability in 2019 – U.S.
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2019 – Investing Behind Deploy For Growth
• Continued core renovation • Differentiated innovation, including new brands • Increased communication around wellness attributes • Investment in simplifying shelf and shopping experience
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In Summary
• An Important business
• Big, expandable brands
• Already stabilizing core international markets
• Signs of progress in the U.S.
• Investing now for stability over time
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