Fitch downgrades Kellogg to BBB

Fitch Ratings said it downgraded the long-term issuer default rating of Kellogg Co. and its subsidiaries to BBB from BBB+.

The short-term issuer default rating was affirmed at F2.

The outlook is stable.

Fitch said the downgrade reflects its expectations that core volume driven growth will be modestly positive at best through the medium-term. Volumes have been in the negative 0.5% to negative 2.6% range on a consolidated basis in four of the past five years.

Further, U.S. Morning Foods (mainly ready to eat cereal) and U.S. snacks, which represent $6 billion in revenues and roughly 45% of the portfolio, has had negative organic growth over the past several years.

Positive growth in some categories such as the high single-digit levels for the Pringles brand with nearly $2 billion in revenues have been offset by negative organic growth trends in other brands, the agency said.

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