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Kellogg Pushes Product Launches To H2 As Virus Raises Costs

Kellogg Co said it would push product launches to the second half of 2020, as the breakfast cereal maker invests into additional warehouse space and logistics to meet higher demand brought on by coronavirus-led stockpiling.

Restrictions on movement put in place to arrest the spread of the pandemic have boosted sales for packaged food makers, including Kellogg, Hershey Co and Mondelēz International Inc, as consumers stock up on snacks, baking products and cereals.

While demand has risen, companies including Kellogg have had to spend more on bonuses, transportation, safety equipment and technology that facilitates working from home.

Meat-Alternative Products

The increase in costs has forced the Pop-Tarts maker to delay the first wave of its launch of Incogmeato meat-alternative products to later this year from the first quarter, at a time when food producers including Maple Leaf Foods Inc have pointed to higher demand for plant-based meat products.

"We've shifted investment out of the first half, given the current situation, and into the second half. And for now, we remain focused on supplying the market with food," chief executive officer Steven Cahillane said.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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