News Archive  

After a rough 2010, Kellogg CEO retires

If your company had to endure recalls, lawsuits, product shortages and increasing costs all in one year, would you stick around? Either will David Mackay, CEO and president of Kellogg Co. who just announced he will step down and...
 After a rough 2010, Kellogg CEO retires
 
 

If your company had to endure recalls, lawsuits, product shortages and increasing costs all in one year, would you stick around? Either will David Mackay, CEO and president of Kellogg Co. who just announced he will step down and retire on January 2 from the 104-year-old cereal company.

"This past summer, I became eligible to retire and made a commitment to spend more time with my family," the 55-year-old Mackay said in a statement.

Mackay will be replaced by John Bryant, the current chief operating officer, who's been with Kellogg since 1998. Bryant has been at the helm of North America and international divisions and served as chief financial officer.

"It's really tough to say if the strain associated with all the problems prompted Mackay to retire or if the board showed some frustration and nudged him out," said Matt Arnold, a consumer analyst with Edward Jones financial adviser. "Either way, given the challenges the Company faces, it's not surprising that he's stepping aside."

Here is a recap of 2010 for Kellogg to review all the reasons why Mackay is entitled to step down. Pressure was put on Kellogg’s sales and profits after Post cereals stepped up price competition. And if memory serves, Eggo frozen waffles went MIA from stores for the first half of the year after a flood closed one of the two plants that manufactures Eggos, while the other plant was closed down for refurbishment.

Also being added to the massive list of recalls this year, in June Kellogg was coerced to recall 28 million boxes of cereal after complaints that an unusual smell and flavor made people sick. The Company said the problem was due to excess chemicals in box liners it got from a supplier.

And last month, a federal judge approved a $10.5 million settlement in a class-action suit that charged Kellogg of falsely advertising its Frosted Mini-Wheats as "clinically shown to improve children's attentiveness by nearly 20 percent."

Obviously the incoming CEO will a have a big mess on his hands to clean up, but as far as the Company’s forward moving business plan is concerned, Bryant plans on focusing on supply chain improvements and increasing innovation, including new cereals and brand extensions of Special K and Eggos. "We'll have 10 percent to 25 percent more innovation in 2011 than during 2010," he said. "We had a difficult 2010, and we know what we have to do to get back on track."

News Source: The Detroit News



 

Featured Articles + MORE Featured Articles >>