Kellogg strike underscores employee leverage in face of talent recruitment, supply chain challenges

The strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union comes at a time when many CPG companies and other businesses across industries are struggling with labor shortages – giving existing employees more leverage to negotiate for benefits.

In order to recruit employees many companies are offering higher wages, signing bonuses and other benefits that go above and beyond what they traditionally have offered – and yet some existing employees, including some striking against Kellogg in Battle Creek, Mich.; Omaha, Neb.; Lancaster, Pa.; and Memphis, Tenn.; feel the compensation doesn’t match the risks they are taking or the effort they are asked to give as the pandemic continues.

“For more than a year throughout the COVID-19 pandemic, Kellogg workers around the country have been working long, hard hours, day in and day out, to produce Kellogg ready-to-eat cereals for American families,”​ BCTGM union president Anthony Shelton said in a statement.

At the same time, he added, “Kellogg is making these demands as they rake in record profits, without regard for the well-being of the hardworking men and women who make the products that have created the company’s massive profits.”​

During nearly every quarterly earnings call since the pandemic began, Kellogg executives have acknowledged and thanked employees for the dedication and hard work producing food to meet a sustained increased demand for at-home consumption.

Against this backdrop, company spokesperson Kris Bahner said Kellogg is “disappointed by the union’s decision to strike,”​ after negotiations to finalize a master contract for the US Ready to Eat Cereal plants failed to find an agreement before the current contract expired Oct. 5.

“The majority of the employees working under this Master Contract enjoy a CPG industry-leading level of pay and benefits, which include above-market wages and pension or 401K. Most employees under this contract have unparalleled, no-cost comprehensive health insurance, while less senior employees have the same health insurance as our salaried employees, but with much lower employee contributions,”​ Bahner said.

“Our proposals not only maintain these industry-leading level of pay and benefits, but offer significant increases in wages, benefits and retirement,”​ Bahner added.

It is unclear how the strike will impact supply levels of popular Kellogg cereals, including Frosted Flakes, which has suffered shortages during the pandemic due to increased demand and supply chain and production challenges. Other potentially impacted cereals include Rice Krispies, Raisin Bran, Froot Loops and Corn Flakes.

Kellogg strike follows resolution at Mondelez facilities​

The strike against Kellogg comes less than a month after Mondelez International resolved​ a strike of more than 1,000 BCTGM union members at three of its bakeries and three of its sales distribution facilities across the country.

Union member complaints in that case were similar, and as in Kellogg’s case, negotiations dragged on long ahead of the strike – a lead up that allowed Mondelez to ramp up production of and stockpile foods made at the facilities where employees went on strike.

What steps Kellogg took in preparation for a potential strike are unknown.