Kellogg Company is reorganizing its North American supply chain network in a bid to improve productivity.
The reorg will shift production of various products to optimal lines across the network, according to an SEC filing. No production facilities are expected to close.
Kellogg’s, the No. 48 publicly owned consumer company, will spend around $45 million on the plan, which it pegged at being “substantially completed” by early 2024. The company is also implementing related productivity improvements starting in 2023 that are expected to help offset cost inflation, as well as reinvest in its brands.
[See also: Kellogg’s Digs Deeper Into Consumer Data with Cheez-It DTC Launch]
Within the $45 million, Kellogg expects capex to total around $21 million and employee-related costs to total around $4 million. The remaining $20 million will be non-cash costs consisting primarily of accelerated depreciation and asset write-offs.
Kellogg North America reported a net sales decrease of 7% in the second quarter, ended July 3, with organic net sales decreasing 8% upon lapping last year’s growth at the beginning of the pandemic. The Kellogg Company’s total net sales grew 3% for the period, with organic sales dipping just 0.4%.
Watch More From Kellogg’s