Kellogg is in a position to drive, shape and ultimately create a cereal category in Asia Pacific, and that’s exactly what it plans on doing, its regional president says.
The Kellogg Company has recently shifted its Asia Pacific headquarters from Sydney to Singapore to align with a hefty growth strategy for breakfast cereal and snacks across the region.
Speaking exclusively to BakeryandSnacks.com, president of Asia Pacific at Kellogg Amit Banati said the move was logical and would better facilitate strategies to bolster its cereal and snacks businesses.
“We see growth both across breakfast and snacks. Yes, snacks is a significantly larger category than breakfast and ready-to-eat (RTE) cereals in Asia, but we do see opportunities on both sides,” Banati said.
For the breakfast sector, he said the company had a two-fold strategy. “We want to drive and create an established category and also leverage brands and expertise to offer food which is closer to the local market.”
Shaping cereal habits but staying relevant
Banati said that as a global leader in cereal, Kellogg had a role to play in creating the category and driving consumption habits. “We’re very focused on creating the habit,” he said, acknowledging that for much of Asia, RTE cereals are not part of the breakfast habit, yet.
When it comes to targeting the cereal category in China, analysts have joined forces in saying Kellogg will need to be 'diligent' as this is a market with very little opportunity given the entrenched traditional views for breakfast and strong domestic players.
“Selectively we’re looking at hot offerings. In India we launched oats; in South Africa we launched Cornflakes and All Bran porridge. I think those are examples of how we’re trying to be more relevant to local habits. Going forward, we’ll look to do more of that.”
However, Banati said the cereal sector across Asia Pacific cannot be considered one market, as there are plenty of differences. For example, he said, in Australia beverages represent 20% of the breakfast market and so Kellogg has launched two breakfast drinks under its Nutri-Grain and Coco Pops brands to target this.
In South Africa (also covered by Kellogg Asia Pacific), he said porridge format is the most popular and in India, the oat grain specifically. Kellogg has recently launched a line of spicy, savory oats for the Indian market, he said, to tap into this preference.
Cereal success is ‘varied’ across Asia
“Success of our cereal business across Asia Pacific is varied,” Banati admitted. In Australia and New Zealand, for example, penetration is very high, but in emerging markets like India, he said growth is still in double-digit growth from a small base.
“We’ve got an on-the-ground presence in all of our markets across the region,” he added, but the new headquarters in Singapore should facilitate working more closely with these markets.
Kellogg management has said that the Pringles acquisition last year would be leveraged to dive into snack opportunities across Asia - a short-term priority for the company. But, asked if this was the sole message being sent to Asian operations, Banati said: "It’s very much a balanced message we have. The reality is, there are growth opportunities in both."
BakeryandSnacks.com will dig deeper on what Kellogg plans to do with Pringles across Asia Pacific in part II, coming soon.