Kellogg turned around the most problematic part of its business in just 3 months

Bowl of Cereal

(Flickr / musicfanatic29)
Breakfast is once again the most important meal of the day at Kellogg.

Kellogg announced Thursday that it had posted the first positive quarter in 2 1/2 years for sales of its morning food business, with growth of 1.5% in the fourth quarter aided by a 4% boost in the cereal category.

"I think if you asked me back on the third-quarter conference call, our expectations for US cereal, we would have defined flat sales in 2016 as success," CEO John Bryant said Thursday in an earnings call. "Given the strength of US cereal across 2015, we'd actually expect our US cereal business to grow slightly, a couple of percent in 2016.”

Kellogg's peppermint patty

(Kellogg's)

Bryant said the success was rooted in the company's investment in changing ingredients and revamping branding, with examples such as adding more berries to Special K red berries and introducing Raisin Bran with cranberries.

With cereal sales dropping 5% across the industry from 2009 to 2014, Kellogg has recently invested in snacks and international offerings. Still, cereal remains a crucial part of the company's business. And Thursday's news suggests Kellogg's iconic cereal brands found rock bottom in 2015 — and are finally rebounding.

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