Kellanova Refocuses on Traditional Pricing, Promotions as Volume Growth Returns
Kellanova is working to reestablish a more typical business environment following years of supply chain disruptions, CEO and president Steve Cahillane said during the company’s latest earnings call.
After leaning heavily on price increases in recent years to offset inflation and economic pressures, the company is shifting its focus back to innovation, brand building and merchandising to drive growth. New flavors, health-oriented products and entirely new food platforms are in the pipeline.
Cahillane said much of the recent “price discovery” process is now complete, and although consumers remain financially strained, they are beginning to adjust. With pricing stabilizing, he anticipates promotional investments will deliver returns similar to those seen before the pandemic.
As a result, Kellanova is returning to a more traditional commercial approach, including the reactivation of promotional activity that had been scaled back during supply bottlenecks. This, Cahillane said, should lead to a better balance between price, mix and volume in the North American market.
Meeting Price-Sensitive Shoppers Where They Are
Cahillane noted that today’s consumers — particularly households earning under $100,000 with children — face significant financial pressures that influence both price sensitivity and purchase timing. (Price sensitivity is also impacted by the timing of the month, depending on consumers' cash flow.)
To address these dynamics, Kellanova is investing in flexible price-pack architecture to offer products across a range of price points. Cahillane stressed the importance of hitting “the right price points, the right pack sizes, the right promotions at the right time in the month” while continuing to invest in brands and innovation.
Ultimately, Cahillane said, success depends on exceeding retailers’ same-store sales by aligning pricing with consumer needs and executing effective commercial activations — creating “a much more constructive dialogue with customers versus who’s taking what share of the pie.”
This article was originally published on P2PI sibling brand, Consumer Goods Technology.
