Kellogg Convenience division loses general manager Forbis

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Kellogg Co.'s $1 billion Convenience Foods division, a bright spot amid ongoing sales woes, was hit with a sudden executive departure.

The company announced last week in an internal memo that John Forbis, the division's exec VP-general manager, was resigning, effective immediately, to pursue other interests.

An executive close to the company said Mr. Forbis' sudden departure was likely due to conflicts with CEO Carlos Gutierrez.

"The issue was that Forbis is very much an operations guy, shaking things up on innovation, but he is not a marketer. And Carlos has made a commitment that what is going to turn this organization around is solid marketing," the executive said. "Carlos' willingness to say he's not the guy after Forbis had only been in the job 18 months talks to how serious he is."

Mr. Forbis will continue to consult for Kellogg on big-picture strategy, for which he was well-regarded. A successor is expected to be named shortly, and the division will report to John Cook, president of Kellogg North America since January 1999, in the interim.

`STRUGGLING FOR GROWTH'

"Kellogg is obviously struggling for growth, with weakness in cereal both domestically and internationally, and convenience seemed to be the one area where they were getting some," said Dave Nelson, analyst at Credit Suisse First Boston.

Dollar sales for convenience brands were up significantly for the year ended Jan. 2. Pop-Tarts grew 14.2% and Kellogg's Rice Krispies Treats and Nutri-Grain franchises together rose 12.7%, according to Information Resources, Inc. But Mr. Nelson said growth for the brands that have been "holding up the company" seemed to slow a bit toward the end of 1999.

In part, said the executive close to the company, sales growth for the brands have suffered because of a "lack of clarity of what the brands are, and that comes down to marketing and business strategy."

BRAND SHIFTS

Along with the announcement of Mr. Forbis' resignation, Kellogg said it was shifting its Rice Krispies Treats Bars brand from the Convenience division to the Wholesome Snacks division headed by VP-General manager Doug Van De Velde. The Convenience division will focus on non-cereal brands intended to be consumed in the morning, including Eggo, Nutri-Grain and Pop-Tarts; Wholesome Snacks will focus more on the afternoon snacking occasion, initially centering around new Snack 'Ums and now Rice Krispies Treats Bars.

Advertising for cereal brands -- including new adult-targeted Frosted Flakes work from Leo Burnett USA, Chicago, and work on Raisin Bran Crunch from J. Walter Thompson USA, New York (AA, Jan. 31) -- reflect the greater commitment Mr. Gutierrez is making to marketing.

But non-cereal brands within the two divisions have yet to benefit from that renewed focus. Part of that has been who's in charge, the executive close to the company said. "Jeff Montie [brought from Kellogg marketing overseas in December to head ready-to-eat cereals in the U.S. as VP-general manager] understands tackle-and-block marketing."

Burnett's Chicago office handles advertising for the Convenience Foods as well as the Wholesome Snacks brands, all of which will likely be receiving greater marketing support in the months to come. Renewed focus will be placed on marketing Nutri-Grain and Rice Krispies Treats specifically; and Snack 'Ums, new canister snacks intended to lure tweens, will launch with a campaign breaking during the Grammy Awards Feb. 23.

A Web site launched for Snack 'Ums (snackums.com) has already been a huge success, drawing 150,000 hits and sending out 50,000 samples to its target audience within the first two weeks, according to a spokeswoman.

The Internet effort, along with last month's launch of a new corporate Web site (kelloggs.com), are part of a new e-commerce division headed by VP-General Manager Richard Herbst. Mr. Herbst consults with the various Kellogg divisions and reports directly to Mr. Cook.

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