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Kellogg taps Nature's Bounty chief as cereal maker's next CEO

Key Points
  • Kellogg Chief Executive John Bryant will step down effective Monday.
  • The maker of Special K cereal has tapped Steven Cahillane, who was previously CEO of health and wellness company Nature's Bounty, as Bryant's replacement.
Steve Cahillane in 2012.
M. Spencer Green | AP

Kellogg has hired Steven A. Cahillane as CEO, succeeding current Chief Executive John Bryant, the Special K owner announced Thursday.

Cahillane, who will start on Monday, will also assume the role of chairman on March 15.

He was previously CEO of health and wellness company Nature's Bounty. Before that, he held senior leadership roles at Coca-Cola and Anheuser-Busch lnBev.

The move comes as Kellogg and its Big Food industry peers struggle with slowing sales and squeezed margins. The looming presence of Kraft Heinz-owner 3G Capital, known to be aggressive in its cost-cutting and acquisitions, has kept every food CEO on alert.

Shares of General Mills, Campbell Soup and Kellogg all hit their lowest prices since August 2015 earlier this month. On word of the management change, Kellogg shares were down less than 1 percent.

The industry pressure has coincided with executive turnover: Hormel, Mondelez and Hershey are among the many big food companies with CEOs who have departed or announced plans to do so.

For Bryant, who had been in the CEO seat for seven years and at the company for 20, the time was right to step down.

"The tremendous change is what has made the job exhilarating and exciting … I have been doing this for some time now, and it was just time for me personally," he said in an interview.

Cahillane joins Kellogg amid its own transformation as sales of its core cereal business drop. Its recent move from direct-to-store delivery to a warehouse system was aimed at cutting costs and adapting to e-commerce distribution models. It has also put money toward investing in companies in emerging markets and growing its natural products and snack business.

Cahillane's previous work at Nature's Bounty, a health company with a strong e-commerce platform, should help Kellogg in these efforts, which could include more acquisitions, Bryant said.

As for larger, transformative moves such as the $2.7 billion acquisition of Pringles that Bryant oversaw in 2012, options might be limited.

"There's just not a lot of very large acquisitions available, there's not much to buy," Bryant said. "I wish I could find another Pringles."