By Justin Moore
- Kellogg’s is selling its cookies and fruit snacks businesses
- In 2018, the U.S. cookies and crackers market is projected to generate $18B
Kellogg’s (K +0.03%) search for buyers has intensified as it looks to offload the cookies and fruit snacks businesses. The packaged goods company wants to focus more on its morning foods, snacks and frozen foods brands. On the chopping block once again is iconic cookie brand Famous Amos, originally created by serial entrepreneur Wally Amos.
Why This Matters: Kellogg’s slimming down is consistent with other household names such as Campbell’s (CPB +5.46%) and Kraft Heinz (KHC -1.83%), which are struggling with slowing growth. They’re selling off business units to be more nimble as they combat smaller competitors experiencing massive growth. The businesses up for sale have about $900 million in annual sales.
Famous Amos cookies in particular have a storied history dating back to 1975 when the company was founded. Through a $25,000 investment from Amos’ friends from his days as a talent manager, singers Marvin Gaye and Helen Reddy helped get the company off the ground. The business quickly became a hit, reaching $12 million in annual sales by 1982.
Amos, a passionate entrepreneur that lacked any formal business training, struggled to maintain the success and growth of the business. By 1989, Amos lost control of the company and parted ways with his namesake brand Famous Amos soon after.
Situational Awareness: It’s not unheard of for founders to be ousted from the companies they started. Steve Jobs was pushed out of Apple (AAPL -4.78%) before returning and making it into one of the most valuable brands on the planet. Undeterred by previous missteps, Amos started Hawaii-based The Cookie Kahuna in 2012 and even appeared on ABC’s Shark Tank in 2016. Fall down nine times, get up ten!
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