You Probably Didn't Notice MorningStar Farms Was On Kellogg's Chopping Block

If you follow a meat-free diet, you've probably noticed the selection of plant-based foods in grocery stores seems to be increasing day by day. Plant-based food brands have been a growing part of the food industry for several years, accounting for over $7 billion USD annually and outpacing total food sales three times over, according to a study by the Good Food Institute. Despite the massive revenue attached to the industry, plant-based meat in particular seems to be experiencing a slump, with meat alternatives such as frozen veggie burgers seeing a 10.5% decrease in sales over the past year (via Financial Post). With this complicated business landscape in mind, Kellogg's latest controversy with meat alternative retailer MorningStar Farms gets all the more interesting. 

Purchased by the cereal giant in 1999, MorningStar Farms had been a major player in the frozen meat alternative sector for many years. However, following the recent trouble in the fake meat market, Kellogg's announced last summer that it planned to sell off its line of faux meat products, per Reuters

Given the slump in the sector following the pandemic coupled with low sales being exacerbated by rising inflation, Kellogg's was likely planning to sell off the company before it sustained a more serious financial hit. 

Kellogg's has completely changed its tune on MorningStar

In a recent call discussing the company's earnings, Kellogg's announced that it would be scrapping plans to sell MorningStar Farms, according to Food Navigator USA — a surprising move considering the uncertain future for meat alternatives. 

Even though Kellogg's CEO Steve Cahillane previously stated his company would consider other options for MorningStar's future, the CEO announced that following an analysis of market conditions, Kellogg's was confident in MorningStar's potential for long-term growth. 

In the February 9 call with company stakeholders, Cahillane had the following to say about Kellogg's decision to hold on to its meat alternatives brand: "MorningStar Farms still has some of the highest household penetration, highest name recognition, fantastic foods, strong in the freezer space where this consumer is migrating back to, and profitable, unlike many of the peers." 

While it still remains to be seen whether Cahillane's predictions about the future of the plant-based meat industry are correct, Kellogg's decision seems to have put MorningStar Farms in a better position than previously thought.