Kellogg announced Thursday that sales in its morning food business had grown for the first time in 2 1/2 years, with growth of 1.5% in the fourth quarter aided by a 4% boost in the cereal category.
"I think if you asked me back on the third-quarter conference call, our expectations for US cereal, we would have defined flat sales in 2016 as success," CEO John Bryant said Thursday in an earnings call. "Given the strength of US cereal across 2015, we'd actually expect our US cereal business to grow slightly, a couple of percent in 2016."
Kellogg's US morning food business, which includes cereal as well as Pop-Tarts, had posted negative sales growth in every quarter since Q1 2013.
Bryant said the success was rooted in the company's investment in changing ingredients and revamping branding, with examples such as adding more berries to Special K red berries and introducing Raisin Bran with cranberries.
With cereal sales dropping 5% across the industry from 2009 to 2014, Kellogg has recently invested in snacks and international offerings. Still, cereal remains a crucial part of the company's business. And Thursday's news suggests Kellogg's iconic cereal brands found rock bottom in 2015 - and are finally rebounding.