NEW YORK – Kellogg is hoping it can finally turn cereal into a breakfast staple in China.
The maker of Frosted Flakes, Pop-Tarts and Eggo waffles says it formed a joint venture to expand the distribution of its cereals and snacks in the country as early as next year. The breakfast giant says the deal will tap the infrastructure and local expertise of Wilmar International, a Singapore-based agribusiness.
The Battle Creek, Mich.-based company also plans to use the deal to sell Pringles chips, which it acquired earlier this year to grow its international business.
Kellogg Co. currently gets most of its revenue from North America, where growth in the packaged food industry has been relatively weak. But like other companies, Kellogg is increasingly casting its sights on developing markets such as China and India, where the appetite for convenience foods is growing more quickly.
Kellogg notes that China is expected to be the largest food and beverage market within the next five years, as the ranks of middle-class consumers continue to multiply in large cities. As for cereal, the company says consumption is rising as milk becomes a more common part of the diet.
China’s past scandals with tainted milk nevertheless remain a major stumbling block for cereal makers, said Paul French, chief China market strategist for Mintel, a research firm.
“They’ve been having a go at trying to get them to eat (cereal) for some time,” he said.