The manufacturer and marketer of such brands as Kellogg’s Corn Flakes and Bear Naked granola is developing new ways to engage B2B and B2C customers through digital commerce.

One of the world’s largest and oldest cereal makers with some of the most well-known brands of snack and convenience foods known to consumers is dropping serious hints at growing B2B e-commerce.

Speaking Nov. 13 at Kellogg Co.’s annual event for investors and analysts, Chris Hood, president for North America, said the maker of such iconic brands as Kellogg’s Corn Flakes and Special K sees significant growth opportunity in B2B e-commerce.

We've dramatically expanded the number of C-store outlets and we've launched a B2B e-commerce business there.

“As part of our redesign within our North American structure,” he said, Kellogg is making “an investment in e-commerce capability to really strengthen not only our ability to call on and serve omnichannel players but also pure-play as well as B2B,” he told analysts. “In B2B, in particular, we think there’s a huge opportunity for growth.—we already have a pretty significant business there today, but there’s a big opportunity for us to continue to accelerate.”

B2B e-commerce sales

MonicaMcGurk-Kellogg

Monica McGurk, chief revenue and e-commerce officer, Kellogg Co.

Kellogg, which generates $13 billion in annual revenue and produces more than 160 snacks and convenience foods like cereal and frozen foods, isn’t releasing many specific details on its emerging B2B e-commerce plans such as annual B2B web sales or how many suppliers are currently using its various brand portals. But Monica McGurk, chief revenue and e-commerce officer, said during the investors event that retail e-commerce accounted for about 2% to 3% of revenue, a percentage that rises to “north of 5%” when including Kellogg’s B2B e-commerce. Using the figures, Kellogg does about $715 million overall in e-commerce sales, including about $325 million in B2B e-commerce.

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It’s clear that Kellogg, in business since 1906 and headquartered in Battle Creek, Michigan, is getting serious about e-commerce. For example, McGurk joined Kellogg in July as chief revenue and e-commerce officer after previously serving as chief growth officer at Tyson Foods, where she oversaw e-commerce along with strategy, insights, innovation, research and development, and marketing services.

Also in June 2017, Kellogg named a prominent business-to-consumer e-commerce executive, Carter Cast, a former CEO of Walmart.com and Hayneedle.com, to its board of directors. In addition to adding senior e-commerce executives to its emerging strategy, Kellogg also continues to build up its B2B e-commerce infrastructure.

In February 2016 Kellogg selected CloudCraze, which was acquired by Salesforce.com Inc. in March, for a direct-to-consumer e-commerce platform for its Bear Naked granola brand; the site features a granola-customization tool that is also now featured on a Bear Naked page on Walmart.com. We’ve also been able to activate our Bear Naked direct-to-consumer platform, originally simply a direct-to-consumer platform, but now a powerful activation as the first personalization and customization play in grocery by Walmart,” she said

CloudCraze, which developed its software on the Salesforce.com technology platform, is mostly used in B2B e-commerce, but has also been deployed as a retail platform by consumer brands. CloudCraze is now part of the Salesforce Commerce Cloud suite of software, which also includes the former Demandware retail software

Kellogg also is soon launching another B2B e-commerce initiative for its specialty channel, which includes product purchases and distribution on businesses that are not grocery stores such as convenience stores. “We’ve strengthened our reach in specialty channels, where we’ve had great success over the years,” Hood told attendees at the investors and analysts event. “We’ve dramatically expanded the number of C-store outlets and we’ve launched a B2B e-commerce business there, which is already a very nice business for us and one that we plan to significantly accelerate in the future.”

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Hood didn’t reveal many details and Kellogg has yet to lay out all of the specifics of its B2B e-commerce strategy.

One area where Kellogg does hope to expand B2B e-commerce beyond retailers is to work more directly with distributors and wholesalers, McGurk said. “We have a very large and exciting business-to-business segment, in which we operate,” she told analysts. “Think of wholesale and distribution customers—in the United States and other developed markets, some of those customers are driving even higher rates of conversion into an e-commerce environment.”

McGurk says Kellogg sees a bigger role for itself in B2B e-commerce, a market that will likely generate $1.2 trillion in sales in as soon as two years, according to Forrester Research Inc.

“A number of analysts predict that the size of these markets around the world can be as much as two times to 10 times bigger as even the retail grocery opportunity,” McGurk said. “So, of course, we’re going to focus and deliver on those opportunities in partnership with those customers as well.”

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