Thursday, November 12, 2015

Kellogg Buys Egyptian Cereal Firm in Emerging Market Expansion Drive

Kellogg Buys Egyptian Cereal Firm in Emerging Market Expansion Drive

Sept. 28, 2015 6:18 a.m. ET

Article Reviewed by Alanna Murray

I’m a very frequent buyer of Kellogg products, which initially sparked my interest in the following WSJ article. The breakfast cereal maker announced that they’ll be buying the Egyptian cereal firm, Mass Food Group, for $50 million. Kellogg Co is looking to continue expanding into emerging markets.  By acquiring Mass Food, Kelloggs will gain the 30 markets that they export food to; including Europe, East Asia and Africa – and have obtained a strong brand loyalty with. “Today’s announcement builds upon significant progress against our emerging market growth strategy announced earlier this year,” said John Bryant, chairman and chief executive, Kellogg Co. “We are building a strong foundation for emerging market growth,” he added. Kellogg had also bought Bisco Misr, an Egyptian packaged biscuit company as well as Multipro, a premier sales and distribution company in Nigeria and Ghana.

Emerging markets and brand expansion is an essential part of international marketing. The international economy encourages distribution of goods between continents. Consumers in emerging markets typically have plenty of available labor and demand for the goods they sell, resulting in an advantage for companies that extend their brand in these countries. “Emerging markets are growing in importance to cereal makers as more residents in those countries move to cities and have less time and inclination to make traditional warm breakfasts, ” Ian Walker. 

1 comment:

  1. I think the relationship between the trend of urbanization and the rise of the "cold breakfast" is fascinating. It goes to show that in any industry there are subtle causal relationships that, once identified, can be capitalized upon for market development.