Kellogg Co. recently shed light on its strategic operations in Africa during a presentation at the Barclays Global Consumer Staples Conference. While much of the discussion centred around the impending spinoff of W.K. Kellogg Co. and Kellanova, an intriguing glimpse into the company’s African endeavours emerged. President and Chief Executive Officer Steven A. Cahillane, in his articulate appraisal, described Africa as a “fantastic business” for Kellogg.
Mr. Cahillane attributed Kellogg’s success in the African market to the leadership of Amit Banati, currently serving as the Chief Financial Officer of Kellogg Co. Notably, it was during Mr. Banati’s tenure as President of Kellogg Asia Pacific, Africa, and Middle East (AMEA) in 2018-19 that Kellogg adopted a pioneering strategy termed “the affordability pyramid.”
Reflecting on Kellogg’s historical foray into the African market, Mr. Cahillane remarked, “Historically, if you go way back to when we first went into Africa, we went into South Africa with cereal.” This initial entry, he explained, necessitated the cultivation of a breakfast cereal culture in a market where it was considered a premium product. However, he highlighted the evolution of their approach in Nigeria and other regions, emphasising the adoption of the affordability pyramid model, starting with products priced modestly and gradually ascending towards premium offerings like Pringles. An equally crucial aspect was an unwavering focus on “route-to-market.”
Kellogg’s strides in enhancing its route-to-market capabilities in Africa were catalysed by its acquisition of a 50% stake in Multipro in September 2015. Multipro, renowned as the largest distributor of food products in Nigeria and Ghana, has since played a pivotal role in fortifying Kellogg’s presence on the continent. Mr. Cahillane likened this strategic move to constructing a “moat” around Africa, safeguarding their market access.
He elucidated, “We get to every single traditional point of sale that you wouldn’t be able to get to without the scale that Multipro gives you.” This expansive reach has facilitated Kellogg’s ascent to the position of the largest food company in Nigeria, where their products have become a staple in the diets of African consumers. Highlighting the indispensability of Multipro’s role in the company’s strategy, Mr. Cahillane emphasised its application in Egypt, Saudi Arabia, and South Africa.
Furthermore, Kellogg’s recent introduction of Kellogg’s noodles in the Gulf Coast states and South Africa has made significant headway. “We’re the No. 2 noodles brand now in Africa,” stated Mr. Cahillane, underscoring the company’s growing influence in the African culinary landscape.
Kellogg Co.’s insightful presentation at the Barclays Global Consumer Staples Conference shed light on its astute strategies and investments in the African market. With a keen focus on affordability and a robust route-to-market advantage, Kellogg is poised for sustained success in this promising region.