Kellogg's maintenance hits breakfast tables

23 Jul 2014

Fewer South Africans got it all this morning as maintenance work at Kellogg's SA's plant has halted the production of All-Bran Flakes - and it is unlikely to resume soon.

Kellogg's maintenance hits breakfast tables

The popular "weight management" cereal Special K, consumed by people wanting to "drop a jeans size in two weeks" has also been affected by the maintenance programme, the global cereals producer said Monday, 21 July 2014.

Kellogg's did not specify the nature of the work under way at its Springs production facility that began on 1 July, nor could it explain why production of its other brands - including the country's best-selling cereal, Corn Flakes, the chocolate-flavoured Coco Pops and wheat alternative Rice Krispies - had not been affected.

"We are working to resume production as quickly as possible," the cereals maker said, although it could not specify when it would restart. Supply disruptions at Kellogg's are providing an opportunity for local retailers to move their in-house brands into the line of consumers' sight.

Pick n Pay's divisional groceries manager Brian Austin said that there had been growth in sales for its no-name brand Bran Flakes generally, "and more so during this shortage".

Woolworths said it was aware of Kellogg's production "issues" and would continue to offer the group's private label cereal products as an alternative.

Kellogg's manufactures its products in 17 countries outside SA and distributes them to 180 countries worldwide.

All-Bran Flakes is the group's second-biggest selling cereal in SA.

In the interim, Kellogg's says it plans to import All-Bran Flakes and Special K from the UK, but it could take up to two months before consumers see them back on the shelves again, it said. The imported cereals could come at a higher cost for already-strained consumers battling higher borrowing costs, weak wage growth and rising inflation.

The rand has depreciated more than 20% against the pound in the past 12 months, reaching a year low of R18.81 in January. Risks of further weakness this year are high as cheap money from the US dries up and developed economies, including the UK start raising interest rates.

Source: Business Day

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