Kellogg to focus on innovation in 2012.

Kellogg to focus on innovation in 2012.

Kellogg president and CEO John Bryant has claimed renewed investment in innovation has revitalised sales at the company.

The US cereal maker has invested more in new products to boost revenues following a troubling 2010, when a product recall, supply-chain issues, a price war with rivals and weak cereal markets at home and abroad dented sales.

Bryant, speaking at a Barclays Capital investor conference on Thursday (8 September), admitted the company was hamstrung when it cut investment in innovation.

He said: “We had a lack of innovation in 2009 and 2010 as we focused more on renovation. We have an outstanding innovation program in 2011 and a stronger programme coming in 2012.”

“This year we'll launch products that will have about $800 million of additional sales for the company and we're seeing some great success from products like Special K Cracker Chips, Crunchy Nut, a roll over benefit from FiberPlus, as well as Thick & Fluffy Waffles. So really, a tremendous innovation pipeline for 2011.”

He admitted that volumes would be likely be “flat” but pricing and innovation would grow sales.

“I think the flattish volume is the right call. We have very strong innovation, but we are taking a significant amount of pricing,” he added.

“We do expect 2012 to be inflationary again because of where the grain costs have gone.

“Again, we expect to have a very strong innovation pipeline for 2012 to help offset elasticity from that pricing. So we feel like we're well positioned to weather that.”

Bryant concluded: “We stabilised the business in 2011. We're seeing some great top line results, some outstanding share performances.”