For Battle Creek, cereal is ‘in our DNA.’ But the city is changing.

After Kellogg announces it will split into three companies, Battle Creek focuses on diversifying economy

By: - June 23, 2022 12:40 pm

Kellogg’s World Headquarters corporate office, Battle Creek, Oct. 19, 2021 | Laina G. Stebbins

For more than a century, the smell of cereal has wafted through Battle Creek.

Residents in the south central Michigan city can often pinpoint the exact scents: This smell means Frosted Flakes are being made. This one is Fruity Pebbles. 

They are smells rooted in history: Will Keith (W.K.) Kellogg created what was then called the “Battle Creek Toasted Corn Flake Co.” in 1906, and the now $14 billion cereal giant has been headquartered in Battle Creek for the past 116 years. At one point, before the company began building cereal plants in cities across the country in the mid-1900s, Battle Creek was manufacturing almost all of the cereal being sold in the United States and world, Mayor Mark Behnke said.

Cereal, state Rep. Jim Haadsma (D-Battle Creek) said, is “in our DNA.”

“This is the place where W.K. Kellogg first invented Corn Flakes; there were many breakfast cereal companies here,” Haadsma said. “This is Cereal City, USA. We’ve had Kellogg’s, Post and Ralston all operating at the same time here. It’s a city where you can often smell cereal in the air. It’s very important to the community psyche.”

Cereal City, however, is changing.

Kellogg, long one of the largest employers in the city, began moving thousands of middle-class jobs out of Battle Creek to save money in the 1990s, and an 11-week strike over fair wages and benefits last year further exacerbated tensions between residents and the company.

Striking Kellogg union workers and their supporters rally across from the Kellogg headquarters in Battle Creek, Oct. 27, 2021 | Laina G. Stebbins

Then, on Tuesday, June 21, Kellogg announced another round of major changes: It is splitting into three different companies and will have headquarters in both Battle Creek and Chicago. The three companies will focus on snacks – currently the largest revenue-generator for Kellogg – cereals, and plant-based foods. Chicago will be home to the snack company, while the cereal and plant-based foods divisions will be in Battle Creek. Kellogg officials have said none of the company’s manufacturing and corporate jobs in Battle Creek will be affected by the split.

This emergence of three companies is happening at least in part because of Americans’ changing eating habits: People aren’t eating cereal the way they once were, and cereal sales have continued to drop for years. For a company like Kellogg, its snack products like Pop-Tarts and Pringles are making most of its money. Kellogg had net sales of $14.2 billion in 2021, and $11.4 billion of that came from its snack division. Its cereal sales, meanwhile, generated about $2.4 billion in 2021, and its plant-based sales, which include the MorningStar Farms brand, landed about $340 million.

“This is no shock to anyone who’s been in Battle Creek for any amount of time,” Calhoun County Commissioner Jake Smith said of Kellogg’s announcement. “There’s been a drip, drip, drip from Kellogg’s for years now, whether they’re moving (jobs) to Grand Rapids, over to Chicago or offshore. This is something that folks from Battle Creek have gotten used to.” 

While cereal has long dominated Battle Creek – a city of about 50,000 people located about 25 miles east of Kalamazoo – local leaders have for years been working to diversify the economy away from being heavily dependent on Kellogg jobs. 

“We’ve recognized for some time that the age of a single employer lifting up a city with tens of thousands of jobs is, by and large, gone, and we’ve positioned ourselves over the years really well to diversify our local economy,” Smith said. “We have a strong skilled trades workforce here in town that we’re really proud of. We have a lot of infrastructure here in town, including our wonderful industrial park…We have a unique airport. 

“Whatever ends up coming out of Kellogg’s, we’ve done a good job diversifying our economy,” Smith continued.

While Kellogg has vowed that no Battle Creek jobs will be affected by this change, Smith said he doesn’t “think anybody here believes that.”

“Kellogg’s is a business, and everyone understands that,” he said. “No one’s counting on them to retain thousands of jobs in this city.”

We’ve recognized for some time that the age of a single employer lifting up a city with tens of thousands of jobs is, by and large, gone, and we’ve positioned ourselves over the years really well to diversify our local economy.

– Calhoun County Commissioner Jake Smith

More worrisome to Smith than a potential loss of Kellogg jobs is the Battle Creek Veterans Affairs Center possibly moving to the Grand Rapids area. The U.S. Department of Veterans Affairs in March recommended that the center relocate – a move that Smith said would be devastating to the local community because it employs about 1,600 people.

“That is much more concerning to me and many others in our community because those are highly specialized skilled jobs people came here for,” Smith said. “They’re outstanding federal jobs. In my opinion, that’s the bigger concern in terms of major employers leaving the community.”

Other local officials, such as Haadsma and the city manager, are more optimistic that Kellogg will keep its word and not cut any jobs in the wake of the company split.

“I take Kellogg at its word that it will continue to be a significant presence in its hometown, the birthplace of breakfast cereal manufacturing,” Haadsma said and added that he believes “the repositioning of some of the executive jobs to Chicago may allow Kellogg to flourish more than it is.”

While Battle Creek’s economy has been hurt by cereal manufacturing jobs leaving the city, Behnke, the city’s mayor, also noted that the city has for years been working to expand the local economy and noted the Fort Custer Industrial Park has helped to grow the financial landscape.

“We continue to economically develop the Fort Custer Industrial Park, and that’s been the saving grace of Battle Creek,” Behnke said. “We have close to 13,000 people who work at Fort Custer Industrial Park.”

Kellogg cereal plant in Battle Creek, Oct. 19, 2021 | Laina G. Stebbins

Other city officials, like City Manager Rebecca Fleury and Joe Sobieralski, the president and CEO of Battle Creek Unlimited, an economic development group, expressed optimism about both Kellogg’s future in Battle Creek and job growth in general during a press conference on Wednesday.

“We’re excited about [the cereal and plant divisions] being headquartered in Battle Creek, and we’re excited that, per the company, there will be no jobs lost,” Fleury said at the press conference that took place after city officials met with Kellogg CEO Steven Cahillane and other company leaders.

“We’re making sure we have a talent pool for them to draw from; we’re making sure that we have a variety of housing options,” Fleury continued. “…Battle Creek will always be home to Kellogg’s.”

Like many of those interviewed by the Advance, Sobieralski said Battle Creek’s economy is more than cereal jobs. 

“Battle Creek is synonymous with Kellogg, but you have to realize that there’s much more going on here besides Kellogg,” he said, noting that his organization, Battle Creek Unlimited, “was spearheaded to actually diversify away from the cereal industry nearly 50 years ago.

“And what does that mean?” Sobieralski asked. “We have the largest industrial park in the state of Michigan, with over 85 companies” that provide some 13,000 jobs “in this community beyond what Kellogg does.”

While the city is going to “honor our history, our legacy” with cereal manufacturing, “we’re also not going to rest on our laurels, and we’re going to continue to do economic development and diversify,” Sobieralski said.

Still, officials know any loss of cereal jobs is a psychological blow to a city where its identity has been so closely intertwined with cereal manufacturing. Kellogg’s presence is everywhere in the city, from the National Cereal Festival that draws thousands of people to its downtown and offers what’s professed to be the world’s “longest breakfast table” to the W.K. Kellogg Foundation – one of the country’s largest philanthropic foundations – calling Battle Creek home. 

All of that, city residents said, means they want that scent of cereal in the air to remain.

“It’s an important part of Battle Creek and being from Battle Creek,” Haadsma said. “But given what the company is reporting, I’m confident breakfast cereal will continue to be important in Battle Creek, and Kellogg’s will still be important as a corporate citizen in its philanthropic and economic roles to Battle Creek.”

Still, Smith said, even if Kellogg jobs do disappear, the city will withstand that loss. 

“This is a blue-collar working class town with skilled labor,” Smith said. “We’re going to be just fine. I hope Kellogg’s is a part of us moving forward, but we’re prepared if the worst comes.”

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Anna Gustafson
Anna Gustafson

Anna Gustafson is a former assistant editor at Michigan Advance, where her beats included economic justice, health care and immigration. Previously the founder of the Muskegon Times and the editor at Rapid Growth Media in Grand Rapids, Anna has worked as an editor and reporter for news outlets across the country.