Food giant Kellogg's made waves this week as it announced plans to split its business into three separate entities: cereals, snacks, and plant-based products, making it Cheddar's stock of the week.

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Stock of the Week: Kellogg

let's take a look at our stock of the week, which is Kellogg as you know, the food manufacturing company made a big announcement a few days ago, Kellogg says they plan to split into three publicly traded companies. Now, Kellogg's north american serial business will become its own entity with brandy No, like special k fruit loops, frosted flakes and rice Krispies among many others. Next is a snacks brand which includes Pringles cheez its carr's crackers and more in addition to frozen breakfast foods like egg oh and it's growing instant noodles business in africa. Now, the final entity will house Kellogg's plant based business with brands like Kashi, Incognito and morning star farms. So names for the new companies have yet have been decided but expects to be spinoffs will be done by 2023 you can see shares on the five day have jumped more than nearly 4.5% right there for you, interesting stuff, It's really interesting Ken and Kellogg Ceo Steve Elaine saying each of the businesses have quote significant standalone potential. That company reportedly been exploring some type of spin offs since 2018 but the momentum really starting in 2012 when it acquired Pringles from Procter and gamble for 2.7 billion. Now that immediately made Kellogg's a major player in the global snacks business and did help profits cereal business, however, has been slowing down recently despite a momentary increase in sales during the pandemic. So recently they've stagnated as people prefer to eat on the go or look for greater variety in the morning and serials, which were staples of the company for years are no longer seen as key drivers of growth for Kellogg's chameleon though, expecting that dividing of the business will actually help streamline operations for the cereal division and improve profit margins since it won't have to compete with the stacks business for resources. The plan-based business will be anchored by Morningstar farms and generates $340 million dollars in sales just last year. So Kellogg's is one of the rare stocks that's actually risen so far this year as it's seen a big shift towards snack sales. We can take a look here Ken at shares of Kellogg, they are up 6.4% year to date one of the few stocks, I mean very, very few stocks that is actually up on a year to date basis. And pretty optimistic obviously as we're recovering all week on these three separate entities. It's interesting too, because Kellogg's is one of those companies that has been really fortunate to whether the kind of not only the pandemic, but also where this inflation is running red hot, they were able to obviously have great margins when it came to that with the increasing prices and folks are not really cutting out on their cereal when it comes to the grocery store shopping. So they're in a pretty good place. And although their forward thinking when it comes to their plant based selection, it's the smallest of the three entities that's making the most money right now. But When it comes to snacks, I think it's like 80% internationally that it accounts for 80% of its revenue from international snacks. So they're doing pretty well there. I know I'm buying a lot of Egos when I go because my daughter loves them. What about incognito? Are you a fan of that? You know, I am not a big fan of the morning star in incognito. I'm not, I'm not really big on the plant based but like you know the egg goes those, I'll reach for it. Ha ha ha. Um I can't say actually that I've ever tried the incognito. That's why I asked ken, but look, Kashi cereal huge moneymaker for this company as well, prices obviously increasing. It's been interesting the few times that we've spoken to Kellogg's chief, there is steve Hill Lane, he has said simply, I mean on multiple occasions prices continue to increase across the different brands now. Cereal interestingly is what this company is known for. But it's actually been I think the industry or the unit actually struggling the most had that major strike workers strike in the fourth quarter of last year and still literally into like the middle of this year and earlier this year still having negative impacts because of that. So we'll see whether or not the cereal business can stand on its own snacks business, we know, I mean just continuing to crush it and then Plant based is interesting. But Plant based is still a growth business. So I don't know, you know if we if we do have a recession whether or not Plant based is something that would be attracted to people. It's also kind of helps with the supply chain because if one business is faltering because the materials and ingredients or whatever they need to, they have others to fall back on. Because as you know, supply chains right now are extremely fragile. So this kind of gives them some wiggle room when it comes to that. But I totally agree when it comes to luxury at the at the grocery store. Plant based is definitely on that list. Plant place is definitely the way.