Kellogg to Invest $45M in North America Supply Chain Overhaul

No production facilities are expected to close, though the company is expecting cash costs to include severance and termination benefits.

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In a Sept. 3 Form 8-K filing with the US Securities and Exchange Commission, Kellogg stated that it plans to invest $45 million in a reorganization plan for its North American supply chain network.

The Battle Creek, MI-based company β€” best known for its cereal and snack foods brands, and, most recently, several plant-based meat brands β€” said the overhaul is designed to drive increased productivity.

Kellogg says no production facilities are expected to close as a result of the plan, which instead involves "shifting production of various products to optimal lines across the Americas network," states the 8-K document.

The overall project is expected to be substantially completed by early 2024, with related productivity improvements commencing in 2023 that can help offset cost inflation and reinvest in the company's brands.

The implementation of the plan is "subject to satisfaction of any collective bargaining obligations."

Kellogg expects $25 million of the investment to be in cash costs. Employee-related costs are expected to be about $4 million of that, which will include severance and other termination benefits, with the remainder primarily consisting of capital expenses. The approximately $20 million in non-cash costs will primarily consist of accelerated depreciation and asset write-offs.

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