Kellogg to shut down 39 distribution centers, cut jobs

Kellogg's cereal
A June 25, 2010 file photo shows boxes of Kellogg's Froot Loops, Corn Pops, Apple Jacks, and Honey Smacks on the shelf of a Mt. Lebanon, Pa., grocery store. (AP Photo/Gene J. Puskar)

BATTLE CREEK, Mich. (WOOD) — The Kellogg Company is closing 39 distribution centers nationwide as the Battle Creek-based company shifts from direct store delivery to warehouses.

The change is part of Kellogg’s “Project K” restructuring program, which already led to 250 job cuts, mostly in Battle Creek.

“While this is the right move for the company to achieve our long-term objectives, it was a difficult decision because of its impact on employees,” stated company spokesman Kris Charles Thursday.

Charles told 24 Hour News 8 that Michigan’s only distribution is in Detroit. Each center employs an average of 30 full-time workers, she said.

The changes come as Kellogg reported a $53 million loss last quarter. The company Wednesday revised its flat sales forecast to a 2 percent yearly decline.

Kellogg expects the new model will allow its company and retail partners to grow while simplifying its system. Kellogg already uses warehouse distribution for 75 percent of U.S. sales, including Pringles, frozen and morning food products.

The Kellogg Company said the shift to warehouses will also mesh with consumers’ changing shopping habits. The company says more people are turning to a wider variety of stores as well as online, making brand building.

Charles said some of the company’s biggest retail partners “have expressed strong interest” in hiring Kellogg’s employees who are losing their jobs. The Kellogg Company plans to start transitioning its system in the second quarter; Charles expects all distribution centers to be shut down by the end of the year.