By Sarah Skidmore
AP Food Industry Writer
PORTLAND, Ore. (AP) -- Kellogg Co. announced Monday that its CEO, David Mackay, will retire Jan. 1 and be replaced by Chief Operating Officer John A. Bryant.
After a year of upheaval for Kellogg, which makes Frosted Flakes, Pop-Tarts, Cheez-Its and many other top-selling snacks and cereal, it's a big shift. But Bryant, a 12-year Kellogg employee, says he is dedicated to the company's current plan for recovery.
The world's largest cereal maker, Kellogg was on a strong growth trajectory until 2009 when it hit tough times due to the recession and rising ingredient costs.
Things got worse in 2010. Cereal sales fell, competition increased and the company conducted one of the largest food recalls in its history.
Kellogg recalled 28 million boxes of cereal in June following complaints that an unusual smell and flavor had made people sick. The company said excess chemicals in box liners from a supplier caused the problem.
Kellogg leaders said 2010 has been one of its most difficult and disappointing years. The company hopes to regain momentum in 2011 but recognized the difficulty of doing so in this difficult economic environment.
"There is no question that 2011 is going to continue to be a tough environment," Bryant said in an interview Monday with The Associated Press. "The economy will be weak, unemployment will be high and so the consumer is going to be depressed."
Some analysts speculated that the company's recent problems may have played a role in Mackay's departure, though Kellogg said it was his decision alone.
Morningstar analyst Erin Swanson said managers seem unable to wrap their arms around ongoing problems. She anticipates the company will focus on new products to increase revenue under Bryant, but she doesn't expect improvement overnight.
Bryant said the company's top priority is getting back on track. That means more innovation in products and working to connect with consumers.
"Momentum is something that takes more than a few months to build," Bryant said.
The approach is similar to one laid out under Mackay. Bryant, 45, worked closely with MacKay as Kellogg's chief operating officer since 2008.
"I think it's important to remember that there is a lot more to the company than who the CEO is," Bryant said. "We have a great team, we know what we want to do and we'll focus on getting it done."
Kellogg said Mackay, 55, became eligible to retire this summer and alerted the board of his decision Friday, saying he had made a commitment to spend more time with his family. He has worked for Kellogg for 20 years and served as CEO for four. Also president and a director, MacKay will stay on through March 31 to help with the transition.
Kellogg reaffirmed its revenue and earnings forecasts for 2010 and 2011 on Monday.
Shares of Kellogg, based in Battle Creek, Mich., fell 10 cents to $49.40 in afternoon trading.
Published: Wed, Dec 8, 2010
