Founded in 1930 by breakfast cereal pioneer Will Keith Kellogg, the WKKF continues to wield massive influence, with $9.4 billion in total assets as of 2024. In fiscal year 2024 alone, it distributed an estimated $408 million to charitable causes.
“New grant commitments during the fiscal year totalled $262 million, with 58% benefiting WKKF’s priority places of Michigan, Mississippi, New Mexico and New Orleans in the United States, as well as internationally in central and southwest Haiti and in the highlands of Chiapas and the Yucatán Peninsula in Mexico,” said Don Williamson, chief financial officer & treasurer.
He also noted a significant financial shift: WKKF’s core holding in Kellanova increased approximately 40% ($1 billion) following the August 2024 announcement that Mars would purchase all outstanding Kellanova shares.
“The investment portfolios for the Foundation and the WK Kellogg Foundation Trust combined were valued at $9.4 billion, a year-over-year increase of 17.6%, which provides resources for spending on grants, programme-related activities and administration costs,” Williamson added.
Despite turbulence in the corporate landscape, WKKF’s mission remains unwavering: improving education, health and economic equity, particularly for children and families.
“Everything we do is rooted in our founder’s charge - 94 years ago - to work toward ‘the health, happiness and wellbeing of children, without discrimination as to race, creed or geographical distribution’,” wrote president and CEO La June Montgomery Tabron in the WKKF’s 2024 Annual Snapshot report.
“Our deep-seated commitment to helping communities build a more equitable world for all children sprang from these roots. That commitment has continued to branch in new directions in the decades since, through our work to foster racial healing across the diverse communities we serve.”
She added, “If Mr Kellogg could see our impact on the lives of children and families over the 2023-24 fiscal year, I’m confident he would be proud. Our grantees are making a difference - one community and one conversation at a time.”
Reinvention or acquisition?
In stark contrast to WKKF’s stability, WK Kellogg Co - the North American cereal giant spun off from Kellanova in late 2023 - is in the midst of a $500 million supply chain overhaul while also being eyed as a potential acquisition target by the Nutella maker.
Announced in August 2024, WK Kellogg’s three-year modernisation plan aims to streamline operations and boost profit margins. The Battle Creek-headquartered company has allocated $390 million to upgrade facilities in Michigan, Pennsylvania and Ontario, while an additional $110 million is earmarked for restructuring - most notably, closing its Omaha, Nebraska, plant and scaling back production in Memphis, Tennessee.
WK Kellogg plans to invest $200 million in supply chain modernisation this year alone, according to its Q4 2024 earnings report. The Special K and Rice Krispies maker is already seeing results. By Q4 2024, adjusted EBITDA rose 7.5% year-over-year, credited to improved productivity and reduced waste.
“That’s meaningful because, as time goes on, the team is executing,” CEO Gary Pilnick said during the Q4 earnings call. “And for us, it’s not a big surprise … even though the initiative is so complex.”
WK Kellogg’s revamped supply chain operations were a key driver of its nearly 30% gross margin for full-year 2024, and the company remains on track to grow its EBITDA margin from 9% in 2024 to 14% by 2026 through these aggressive operational improvements.
“We are on track to deliver that target even in a challenging operating environment, demonstrating the team’s ability to execute and the earnings power of our business,” Pilnick added.
Yet, challenges persist. Net sales dipped 2% year-over-year and net income plunged 35%, largely due to restructuring costs and a tough retail environment. While efficiency gains may boost margins, WK Kellogg is still grappling with shrinking demand, evolving consumer preferences and increased competition from healthier breakfast alternatives.
Ferrero’s interest: A lifeline or a power play?
Last month, reports surfaced that the Italian confectionery giant was exploring a potential bid for WK Kellogg, sending the cereal maker’s stock soaring 9% in one day. According to multiple sources, advisers are working with Ferrero to determine whether to make a formal offer for Kellogg.
While these discussions are still in the early stages, analysts see the move as a calculated expansion play for Ferrero, which previously acquired Kellogg’s cookie, fruit snacks, ice cream cone and pie crust businesses in 2019 for $1.3 billion. With its steady push into the North American market, Ferrero could see WK Kellogg as a valuable legacy brand ripe for a strategic takeover.
WK Kellogg has yet to confirm or deny any formal talks but hinted at a broader growth strategy beyond cereal during its presentation at the Consumer Analyst Group of New York (CAGNY) conference. The company is reportedly exploring strategic partnerships, joint ventures and licensing deals as it looks to stabilise its core business before expanding into adjacent food categories.
“Our today is about cereal, and our tomorrow is about cereal and beyond cereal,” Pilnick told analysts at CAGNY. “We could license our brands into other categories. Perhaps our inorganic growth could come in the form of tuck-in M&A or joint ventures.
“I led corporate development for The Kellogg Co and saw the power of reshaping our portfolio through both of these frameworks. We share this with you today to give you a sense of where and how we can expand in the future.”
The road ahead
Despite its struggles, WK Kellogg raised its full-year 2025 EBITDA guidance to $286-$292 million, banking on continued supply chain improvements and cost efficiencies. However, serious headwinds remain, including a projected 1% decline in organic net sales, evolving consumer habits and potential supply chain disruptions tied to fluctuating tariffs on Mexico and Canada.
As the company stands at this pivotal moment, the battle between reinvention and acquisition is at the forefront.
Will WK Kellogg successfully modernise and chart an independent future, or will Ferrero step in to reshape the brand’s next chapter?
One thing is certain - while WK Kellogg Co fights to define its role in a shifting food industry, the WK Kellogg Foundation’s legacy of impact remains unshaken.