Diving overview:
- WK Kellogg Co. will continue operating its Battle Creek, Michigan, cereal factory and retain 170 employees who would have been laid off after announcing its intention to move operations to Canada.
- The decision was made after the Michigan Strategic Fund Board Business development grant approved For $5 million, the company will remain home for 15 years.
- The newly spun off cereal company is working to improve its supply chain after experiencing a number of problems in recent years.
Dive Insight:
Three months after forming as a new business, WK Kellogg Co.’s decision to maintain its manufacturing presence in Michigan signals a change in the company’s approach to its cereal business.
Stacey Frassow, chief executive officer of the grain giant, said: Statement for bakeries and snacks The company plans to add more jobs and invest millions of dollars to help the plant reach its full potential.
“In recent months, we’ve started to see green shoots of action on the Battle Creek project, and we’re very optimistic that that will continue,” Frasseau said.
The move follows a series of problems the company faced meeting supplies of cereal starting at the start of the COVID-19 pandemic in 2020.
A fire at its Memphis facility in July 2021 challenged the company’s ability to restock products such as Frosted Flakes and Froot Loops. In the fall of 2021, workers at four of Kellogg’s instant cereal production plants went on an 11-week strike, including the Battle Creek plant. The workers and the company reached a five-year contract agreement at the conclusion of the labor dispute, which allowed cost-of-living adjustments for employee wage increases and a path for “traditional” employee pay increases.
As we enter a new era within the historical background, Long-term decline in grain consumption, WK Kellogg Company said one of its primary goals is to modernize its cereal supply chain. CEO Gary Pilnick told Food Dive in October that the process includes technology updates and overall operational efficiencies.