Kellogg Company (NYSE:K) is the world’s leading producer of cereal and a leading producer of snacks and frozen foods. This month, Kellogg’s announced that fourth quarter reported net sales increased to $3.6 billion. This represents an 18.2 percent increase from the fourth quarter of 2011. Internal net sales, which exclude the effects of foreign currency translation, acquisitions, divestitures, and integration costs, increased by 5.3 percent. Full-year 2012 reported net sales increased by 7.6 percent to $14.2 billion. This represents an increase of $999 million from the full-year 2011 results. Their full-year internal net sales increased by 2.5 percent.
Reported net sales growth for Kellogg North America was 7.5 percent in 2012 and 12.3 percent in the fourth quarter. Internal net sales growth was 3.6 percent for the full year 2012 and 5.5 percent for the fourth quarter. The U.S. Morning Foods and Kashi segment posted internal net sales growth of 2.7 percent in 2012 and 6.3 percent in the fourth quarter.
Kellogg’s continues to innovate with their product lines. Investors may want to consider a company that continually transforms a staid brand like Special K into something trendy and new. They now have their Special KFlatbread Breakfast Sandwiches. The new sandwiches have between 180-240 calories, are a good source of protein and fiber and are microwave-ready in 90 seconds. Consumers want “fast and healthier.” Investors should consider that consumers are getting just that from Kellogg’s, which could pave the way for continued net sales growth for 2013.
General Mills, Inc. (NYSE:GIS) is one of the world’s largest food companies. Their cereal brands include Cheerios, Lucky Charms, and Wheaties. In December 2012, General Mills reported results for the second quarter of fiscal 2013. Net sales grew 6 percent to $4.88 billion. Through the first six months of fiscal 2013, their sales grew 5 percent to $8.93 billion.
A number of new products made strong contributions to net sales growth in the second quarter including Peanut Butter Multigrain Cheerios. The company reported that established brands such as Lucky Charms and Chex cereals, and Fiber One 90 calorie snack bars, among other products, contributed strong sales gains.
Here, like Kellogg’s, General Mills is building on the strength of a core brand. Cheerios is on trend with consumers’ love of most things peanut butter. In addition, the cereal’s remaining on trend in the “marketed as healthier” multigrain category. Cheerios is a tried and true product that’s trying to maintain market share by appealing to a variety of taste buds. Investors should consider tried and true brands of storied companies as part of an investment portfolio.
I think investors can like breakfast cereal and milk companies. They say breakfast’s the most important meal of the day. Breakfast cereal and milk companies may be nutritious to a stock portfolio as well.
The article A Breakfast Club for Investors originally appeared on Fool.com and is written by Michael Ugulini.
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