WK Kellogg Co. Restructures: Plant Closures and Job Cuts Amid Cereal Sales Decline

WK Kellogg Co., a renowned cereal manufacturer, has unveiled plans to restructure its operations in response to declining cereal sales in the United States. The company, formed in 2023 after the split of the original Kellogg Company, is implementing significant changes to streamline its production processes.

The restructuring plan includes the closure of the Omaha, Nebraska plant by the conclusion of 2026 and a reduction in production at the Memphis, Tennessee facility starting in 2025. Simultaneously, WK Kellogg Co. aims to boost production and invest in new infrastructure at its plants in Battle Creek, Michigan; Lancaster, Pennsylvania; and Belleville, Ontario.

This strategic move involves a substantial investment of $390 million in new technology and infrastructure, accompanied by a one-time restructuring cost of $110 million. The company anticipates a net reduction of 550 jobs, factoring in new hires at the expanding facilities.

The decision to close the Omaha plant comes with historical significance. In 2021, this facility was the epicenter of a two-month strike, where workers protested against a two-tier wage structure and other issues. The strike concluded with the company agreeing to raises and additional benefits.

Jean Stothert, Omaha's mayor, expressed disappointment upon learning of the planned closure, stating, "After more than 75 years in Omaha, Kellogg's will leave a big void."

The restructuring occurs against the backdrop of declining cereal demand in the U.S. market. Nielsen IQ data reveals a 4.2% decrease in cereal unit sales over the past year, following a 3.6% decline in the previous year. This trend contrasts with the surge in cereal sales observed during the COVID-19 pandemic when families spent more time at home.

"The company got some boost from higher pricing and growing sales of premium products like Special K Zero. But its overall sales volumes fell by 4.8%, and the company said it felt some pressure from store-brand cereals as customers sought better value."

WK Kellogg Co. has a rich history dating back to 1906 when Will Keith Kellogg founded the original Kellogg Company. The company's first product, Kellogg's Corn Flakes, was introduced that same year, following its accidental invention in 1894 by Will's brother, Dr. John Harvey Kellogg.

Over the years, the company has expanded its product line, introducing iconic cereals such as Rice Krispies in 1928 and Special K in 1955. Today, WK Kellogg Co. manages popular brands including Frosted Flakes, Froot Loops, and Raisin Bran, while its sister company, Kellanova, oversees other well-known products like Pop-Tarts and Pringles.

As WK Kellogg Co. navigates these challenging times, it continues to uphold its commitment to nutrition and innovation, a legacy that began with being one of the first companies to print nutrition messages on cereal boxes and hire dietitians to promote the nutritional benefits of their products.