Editor's note: This story is part of Southwest Michigan Second Wave's On the Ground Battle Creek series.
Rebecca Fleury didn’t know in advance about the Kellogg Company’s intention to divide the current company into three independent companies.
“I was notified when everybody else was at 7 o’clock in the morning,” says Fleury, Battle Creek City Manager, of the company’s June 21 announcement. “They did not tell me in advance and there’s a reason for that. As a publicly-traded company, there are parameters around that.”
The company will separate into three independent public companies, dividing its iconic brands into the newly-created snacking, cereal and plant-based businesses.
Since the announcement, Fleury has been fielding questions from local, national, and international media about what this split will mean for the city of Battle Creek. Fleury says she can’t answer a lot of the questions being asked of her “until we know what the actual structure of these companies looks like.”
She says she does not yet have definitive answers because the company’s Chairman and CEO Steve Cahillane has said of the establishment of three separate companies “that’s work to be done.”
Kellogg Company has one cereal-making plant in Battle Creek.
In public statements, company officials have said that the corporate headquarters for its new snack business will be in Chicago, adding that this decision shouldn't negatively impact Battle Creek.
“They already have that presence in Chicago,” Fleury says. “They’re going to add ‘headquarters’ to that presence in Chicago and the new cereal and plant-based companies will be headquartered in Battle Creek.”
In 2012, Kellogg's became the world's second-largest snack food company (after PepsiCo
) by acquiring the potato chip brand Pringles
from Procter & Gamble
for $2.7 billion in a cash deal, according to
Five years later, Kellogg's acquired Chicago
-based food company Rxbar
for $654 million, according to
the company. Earlier that year, Kellogg's also opened new corporate office space in Chicago's Merchandise Mart
for its global growth and IT departments.
Despite the company’s existing presence in Chicago, on June 22, Chicago Mayor Lori Lightfoot posted on her Twitter feed: “Welcome to Chicago, @KelloggCompany
! We're so happy that you've chosen to bring business here. You're in great hands.”
However, the new snack business will maintain dual campuses in Battle Creek and Chicago. The company’s snack business makes up about 80 percent of sales. Kellogg says the spinoff of its North American cereal and plant-based foods businesses should be complete by the end of 2023. Both will continue to be based in Battle Creek.
Kellogg Company’s research division, the W.K. Kellogg Institute, is located in downtown Battle Creek.
Names for the new companies haven’t yet been decided, and proposed management teams for the two spinoffs will be announced by the first quarter of next year. Cahillane will stay on as chief executive of the global snacking company.
Deep investment, a two-way street
From the city’s perspective, Fleury says, “We will continue to support Kellogg’s as they go through this transition. They are making changes necessary to compete in the global food market by creating three separate companies where each one can concentrate on its strengths.”
In an editorial published
in the Battle Creek Enquirer, Cahillane says, “There are lots of decisions to be made over the next 18 months as we undergo this process. Some decisions have been made already and were clear from the outset. For one, we remain deeply committed to Battle Creek. This community has been critical in shaping Kellogg’s success and identity for more than a century, and our roots here will be equally crucial in carrying our legacy forward and connecting our rich history to the opportunities in front of us.”
He goes on to say that, “It’s for this reason that North America Cereal Co. and Plant Co. will both remain headquartered in Battle Creek, and Global Snacking Co. will maintain dual campuses in Battle Creek and Chicago, with its corporate headquarters in Chicago to enhance global connectivity. And it’s for this reason that we are not asking any employees to relocate to Chicago – in fact, we don’t expect any measurable impact to Battle Creek as a result of this news.”
Battle Creek Unlimited is located in Fort Custer.
Kellogg, which used to be the city’s largest employer, is now its second largest employer with 2,000 employees, according to the Battle Creek Unlimited
website. Denso Manufacturing Michigan, Inc
., located at the Fort Custer Industrial Park is listed as the city’s largest employer with 2,500 employees.
Fleury says she has seen and heard nothing that leads her to believe that the company is not going to do what they says they are going to do. She points to a community stakeholders meeting that was held after the announcement.
“They didn’t have to do that community stakeholders meeting,” she says. “They’re beholden to their shareholders. Mr. Cahillane understands the importance of this community to the success of those three companies.”
During that meeting, she says she asked about the future of the W.K. Kellogg Institute for Food and Nutrition Research W.K. Kellogg Institute for Food and Nutrition Research
located at 2 Hamblin Avenue East. She says company officials remain committed to that facility.
The WKKI is a resource that will be accessed for the Food Reimagined initiative, announced publicly
“Food Reimagined is a good example of how to diversify our local economy. We are building on the history of food manufacturing and food development,” Fleury says. “We will never lose our history as the Cereal Capital of the World,” but she tempers this by adding that “Business decisions have to be made for the health of companies. We have to support projects that diversify our local economy and not be reliant on one particular sector.”
She says leadership with BCU and the city along with community stakeholders are continually seeking out new opportunities through an economic development and placemaking lens. She cites the $60 million overhaul of The Milton,
which is fully occupied and now has a waiting list among the examples of these ongoing efforts in the city’s downtown district, and the McCamly Plaza Hotel
“When you encourage a culture of vitality, it encourages people to live, work and play in Battle Creek,” Fleury says.
The Milton, formerly the Heritage Tower, located on Michigan Avenue in downtown Battle Creek has been completely renovated.
In addition to these projects, she says there also is a focus on river naturalization and waterfront development
The former TreeHouse Foods, K-mart, and Graphic Packaging locations “present tremendous opportunities for the city to develop the riverfront differently as mixed-use development,” Fleury says. “We’re working with BCU and our state and local partners to see what those potential impacts will be and we’ll go from there.”
This work is not new and was already well underway prior to the Kellogg announcement, she says.
“Our strategy is that there is work to be done because we don’t know about the specific impact to the City of Battle Creek,” Fleury says. “Kellogg has been a part of the Battle Creek landscape historically forever. Just because the company’s structure has changed, that won’t change.”
Photos by John Grap. See more of his work here.