FDBusiness.com

Kellogg Company and Wilmar International, Asia’s leading agribusiness group, have formed a 50:50 joint venture for the manufacture, sale and distribution of cereals, snacks and savory snacks in China. Wilmar will contribute infrastructure, supply chain scale, an extensive sales and distribution network in China, as well as local China market expertise to the joint venture. Kellogg will contribute a portfolio of globally recognized brands and products, along with deep cereal and snacks category expertise. The joint venture will use the Kellogg’s and Pringles brands.

China is expected to become the largest food and beverage market globally within the next five years, driven both by the growth of a middle class consumer base in large cities and an increased desire for a wide range of packaged and branded foods. Cereal consumption is currently being driven by rapid growth in milk consumption, along with consumers’ desire for healthy and convenient breakfast foods. Snack foods also represent a very large growth opportunity.

“China’s snack-food market alone is expected to reach an estimated $12 billion by year-end, up 44 per cent from 2008,” points out John Bryant, Kellogg Company’s president and chief executive. “To capture this growth, we will leverage the key strengths Kellogg and Wilmar bring to the partnership – the globally recognized Kellogg’s and Pringles brands and deep category knowledge; scale and local market experience; and our mutual commitment to consumer-focused innovation.”

He adds: “This joint venture positions our China business for growth and fundamentally changes our game in China.”