Food Dive
Dive Brief:
- Kellogg CEO John Bryant outlined in a recent interview three disruptive trends that are causing Kellogg and other manufacturers to rethink strategies: the growth of e-commerce, how consumers consume media and marketing messages, and changing consumer views on food and the definition of health and wellness.
- In terms of growth strategies and balancing top and bottom line approaches, Bryant said that growing the top line has to be priority, as it trickles down to impact the bottom line. Improving margins by identifying cost savings over time is second priority, but still important.
- Bryant said if he could have one thing at Kellogg, it would be "the soul of a startup."
Dive Insight:
Cost-cutting has become an industrywide initiative, with companies from Nestle and Danone to General Mills and Coca-Cola announcing hundreds of millions or billions of dollars in anticipated cost savings in the coming years. But Bryant warns against sacrificing top line growth to focus solely on margins.
"You have to do both," Bryant said. "... You have to avoid the false trail between growth and cost savings. Some cost-savings can cost you growth, but they’re bad cost-savings and you shouldn’t do them."
He commended private equity firms' recent work with cutting costs in food and beverage manufacturing (such as3G and Kraft Heinz).
Ultimately, manufacturers, especially legacy companies like Kellogg and its major competitors, have to be forward-thinking and progressively-minded to keep up with the pace of innovation, technology, and changing consumer demands.
"We need to focus much more on the future and where the consumer is going, rather than trying to protect what we’ve had in the past," said Bryant.