Shifting consumer breakfast habits in the US hurts Kellogg Co.

Kellogg Co. has posted large losses in its final quarter as consumers in the US turned their backs on cereals and snack bars for high-protein food-on-the-go.

The Frosted Flakes, Special K and Pop-Tarts maker reported flat sales of $3.5bn in the fourth quarter of 2014, giving the group a full-year total of $14.6bn, a 1.4% fall on 2013.

Comparable sales in Kellogg’s US morning foods division slumped 7.7% in the last three months of 2014, with the snacks arm falling 3.1%.

Kellogg, the largest cereal maker in the US, also downgraded its long-term financial targets, now expecting low-single-digit annual revenue growth, 1 to 3 % compared with 3 to 4 %,

“In 2014, we have been addressing the challenges we have faced in some of the company’s developed businesses,” said John Bryant, Kellogg president and chief executive. “Project K, our four-year efficiency-and-effectiveness programme, is providing flexibility, and we have invested in brand-building initiatives, in-store sales capabilities, and new, improved products.

“We expect that 2015 will be a rebuilding year for us and that our investment will provide a strong platform for future growth.”

Kellogg made a $293m net earnings loss in the fourth quarter – equivalent to a loss of 82 cents a share – compared to a $818m profit a year ago.

The group’s sales in Europe declined in the fourth quarter to $681m, down from $716m in the same period of 2013, but held up over the year, rising from $2.86bn to $2.89bn.