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Re: Snap, Crackle, and Pop



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It’s been a long, long time since I attended business school. During the summer of 1989, when I spent a purgatorial ten weeks as a junior investment banker for Dillon Read (an institution that no longer exists, having been swallowed by other investment banks, and, really, who misses it?), you had to go downstairs to the firm’s library to find annual reports. Nowadays? You just look ‘em up online. Silly me. I should have guessed.

Anway, to get back to Carlos Guttierez and his leadership of Kellogg’s, there is, my many Corner correspondents have informed me, bad news and good news.

The bad news: The increase in sales during Guttierez’s five years running the company—an increase of 30 percent, and not, as I stated below, of 43 percent—resulted less from brilliant marketing than from a single, large acquisition: In 2001, Kellogg’s, which had sales of $6.9 billion, bought Keebler’s, which had sales of $2.8 billion. In effect, Guttierez simply purchased that 30 percent increase in sales.

The good news: The market seems to have approved of Guttierez’s tenure at Kellogg’s all the same. Five years ago, a share of Kellogg’s stock went for about $34. Today that share of Kellogg’s stock will cost you $44. That’s an increase of about 29 percent—a lot lower than the rate of growth in the hottest hedge funds, but a lot higher than the rate of growth in the gross domestic product.

So what’s the word on Carlos Guttierez? He took a stable, old-fashioned business and did pretty darned well with it.

Carlos, Tony the Tiger says GRRRRR-acias!



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