Business Strategy and Outlook
| Erin Lash |While we've long held Kellogg's strategic playbook (increasing investments in capabilities and brands while extracting inefficiencies) is on point, we question the rationale of its decision to spin off its North American cereal arm, leaving it with its global snacking brands. Despite the increased focus management claims this affords, we fail to see how this strategic action enhances its competitive position or financial prospects, given the reduced scale and added administrative costs that are likely to ensue. In our view, the motivation leans more toward unlocking a higher multiple for the faster-growing snack business once it's unencumbered from its mature North American cereal brands.