Who We Are

Consumers inspire us.

To make today delicious, we begin with our consumers.
We listen, we watch and we learn.
We understand their joys and their challenges because we’re consumers too.

What we do.
We make delicious foods you can feel good about.
Whether watching your weight or preparing to celebrate, grabbing a quick bite or
sitting down to family night, we pour our hearts into creating foods that are
wholesome and delicious.

Our reach.
We believe we can make a delicious difference, everywhere.
We’re constantly looking for fresh ideas to improve our workplace, our
partnerships, our communities and our world.

How we behave.
We understand that actions speak louder than words, so at Kraft Foods:

• We inspire trust.
• We act like owners.
• We keep it simple.
• We are open and inclusive.
• We tell it like it is.
• We lead from the head and the heart.
• We discuss. We decide. We deliver.

How we grow.
We focus on creating sustainable, profitable growth. And our strategies guide our
efforts:

• Build a high performing organization

• Reframe our categories
• Exploit our sales capabilities
 • Drive down costs … without compromising quality

About our people.

It takes great people to make great brands. Our approximately 140,000 diverse
employees around the world are the reason we succeed.

Strategies

We’ve set our sights on becoming a global snacks powerhouse and unrivaled
portfolio of brands people love. The complementary nature of our portfolio is at
the heart of the three strategies that will drive our growth:

• Delight global snacks consumers. Consumers around the world are

pressed for time and are looking for on-the-go options. They’re also
looking for simple indulgences and healthier options. And there’s nothing
better than a delicious snack, like LU biscuits, Planters nuts, Tridentgums,
and Cadbury or Milka chocolates to satisfy those desires.

• Unleash the power of our iconic heritage brands. Our iconic heritage
brands are loved by consumers worldwide. Roughly 80 percent of these
heritage brands hold number one or number two positions in their
respective categories and are household names.

Whether it’s regional brands, like Philadelphia cream cheese in Europe

andTang powdered beverages in Asia Pacific; or local favorites like, A-
1 sauces in the US and Vegemite spread in Australia, we make delicious
products for billions of consumers every day.

• Create a performance-driven, values-led organization. To win in the

market, we need to win with our customers and consumers, and with our
colleagues, communities and suppliers. We’ll do this by living our values:
We inspire trust; We act like owners; We keep it simple; We are open and
inclusive; We tell it like it is; We lead from the head and the heart; We
discuss. We decide. We deliver.

Delivering on these strategies will put us in the top tier of our peer group and
provide our shareholders with top-tier returns on their investment:

• Organic revenues growth of 5 percent or more…

Mid- to high-teens margins…

Our Safety Policy

At Kraft Foods, we believe:

o All accidents and injuries are unacceptable and we will do our best
to eliminate all such incidents.
o Safety and health improvement is an individual and team
responsibility.
o Each of us must be dedicated to conducting all activities with the
highest concern for employee safety and health.
o Each of us should participate in a local safety program and actively
seek to achieve an accident/injury free work environment.

Accordingly, Kraft Foods is committed to:

o Meeting or exceeding all applicable safety and health regulations.

o Continuously improving the safety of our work environment by
investing in our people and our facilities.
o Creating and maintaining a world class safety culture to achieve an
accident-free work environment.

How are we doing?

The programs we put in place at our plants meet the Occupational Health and
Safety Assessment Series (OHSAS) 18001 Series, one of the only internationally
recognized safety management systems. And, we are proud to see
improvements in our safety performance every year.

Working to build a better World

through actions large and small, global and local, we’re doing what’s right and

holding ourselves accountable. by doing our part and acting with care today,

we’re helping to build a better world for tomorrow:

a world where there’s enough food for all. Where everyone has access to it.
and it’s nourishing, affordable and delicious.

a world where the air and water are cleaner. Where the land is managed wisely.

and where natural resources are treated with respect.

a world where ethics and profit are not mutually exclusive.

and where everyone is treated fairly.

We’re making good progress, but there is much more to be done. and we can’t

do it alone. this is a journey and we need your help. We invite you to read about

our efforts in the pages that follow and accompany us on our journey

i always tell our employees that regardless of your role, you must make a
positive difference.

that means the company must be better off for your having been there. i feel the
same about

our organization as a whole. as the world’s second largest food company, there
are many ways

we can make a difference. and we’re actively pursuing them. from increasing
sustainable

agriculture to reducing product packaging to providing affordable nutrition. We’re

doing

our part and leading the way.

as a public company, Kraft foods must delight our consumers and our customers
so that we can

deliver value for our shareholders. but successful companies, like Kraft foods and
Cadbury, makers
of brands people have loved for more than a hundred years, know it takes more
than delivering the

numbers, quarter after quarter—despite how important that is.

to build and sustain brands people love and trust, one must focus—not only on
today but also

on tomorrow. it’s not easy…but balancing the short and long term is key to
delivering sustainable,

profitable growth—growth that is good for our shareholders but also good for our
consumers,

our employees, our business partners, the communities where we live and work,
and the planet

we inhabit.

this report is designed to provide the core information we think you’d want to
know about the seven

key areas that embody our economic, social and environmental responsibility…
what we do, why we

do it and how we’re getting on.

you can print it if you’d like. but, to save trees and keep it relevant and timely,
we’re releasing it

online. We’ve also grouped the information in sections so that you can easily
search for exactly what

you want—whether it’s our progress on reducing waste or our position on

advertising to children.

at present, this report covers only our legacy Kraft foods business. but, following
our acquisition of

Cadbury in february, we’re working hard to integrate our businesses and

consolidate our information.
and we’ll update this report as we move along. so, keep checking back.

inspiring trust takes hard work. our track record has and will continue to
demonstrate

our commitment.

irene b. rosenfeld

Chairman and Chief executive officer, Kraft foods

april 2010
This chart shows the number of Lost Time Accidents per 100 full-time equivalent
Kraft Foods employees per year. A Lost Time Accident is when an employee is
injured to the point where they cannot return to their next regularly scheduled
day of work.

The chart depicts safety data at all Kraft Foods manufacturing sites worldwide.
It also includes safety data for corporate offices, sales and customer service field
offices and research and development centers in the United States and Canada.

•
• And EPS growth of 9 to 11 percent.

Cadbury to start producing Kraft Foods' Tang in

India
NEW DELHI: Cadbury India on Thursday said it will start local manufacturing of parent Kraft
Foods' orange drink Tang , while it will also embark on a capacity expansion for its confectionery
products.

"We will start local manufacturing of Tang in India. We are rejuvenating it and we will start
producing it within this fiscal," Cadbury India Managing Director Anand Kripalu told reporters in
Delhi on the sidelines of a CII event.

He said Tang, which has been imported from Thailand to serve the Indian market so far, will be
produced at Kraft's Hyderabad plant.

"It is a legacy plant of Kraft in Hyderabad, which has not been utilised. We will start manufacturing
there," he said.

Cadbury India came under the Kraft Foods fold after the US-based firm acquired British candy
maker, Cadbury Plc for $19.6 billion in January this year.

Asked if Cadbury India will be selling more products from Kraft portfolio, Kripalu said: "As of now
we are still focusing on our core confectionery business."

He, however, said integration process is still going on in terms of synergising distribution
channels of Cadbury and Kraft in India .
Commenting on the overall plans of Cadbury India, he said: "Capacity is a challenge for us, as we
look to drive up volumes. We need to expand it and we will be doing it significantly."

He said the expansions will take place at the company's existing six facilities in India but declined
to share details such as investments and envisaged additional output.
 Cadbury sells chocolate brands, including Cadbury Dairy
Milk, 5 Star and Perk, along with snacks Cadbury Bytes
and health drink Bournvita among others in India.

Kraft Foods can make it

big in the Indian
market
In developing markets, Kraft proposes to capitalize on population growth trends and
exploit scale to invest in infrastructure
The acquisition of Cadbury Plc by Kraft Foods Inc. is an important event in India’s packaged
food market. A decade ago, India would have been just a footnote in a mega acquisition such
as this; the market barely excited global food firms.

But that was then. India figured prominently in Kraft’s rationale for acquiring Cadbury and
even in the latter’s defence argument asking for a higher price.

The confectionery market can be broadly divided into chocolate, gum and sugar confections.
Cadbury had a share of about 32% of the Indian confectionery market in 2008 and a 70%
share of the chocolate market. Kraft has an insignificant presence in India compared with
Cadbury’s sales of £240 million (around Rs1,800 crore).

Graphics: Yogesh Kumar / Mint

In developing markets, Kraft proposes to capitalize on population growth trends and exploit
scale to invest in infrastructure. It also sees a long-term opportunity of consumers trading up
to its products. Kraft has a global portfolio of food brands—spanning categories such as
snacks, beverages, cheese, grocery and convenient meals—that it can add on top of Cadbury’s
existing portfolio.

A direct entry would have been expensive as it would have to build a marketing and
distribution network from scratch.

Its attempt to sell its orange drink Tang in India met with limited success.

The Cadbury acquisition gives it a ready revenue base and a large distribution network
reaching out to about one million outlets. The network of traditional grocery stores and
modern trade is an especially valuable one, though the small retailers such as corner shops
may not be of much use to Kraft.

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The environment is right, too, because Indian consumers are willing to buy premium products
and firms have in modern trade an effective platform to address this market. Many of Kraft’s
products would qualify as premium products in the Indian context.

What does this mean for other Indian companies? Kraft is bound to be a little more aggressive
than Cadbury due to cultural differences and also the need to prove to its shareholders that
the acquisition is indeed working. More clarity will emerge later, when the changes become
visible on the ground. But large food companies such as Britannia Industries Ltd, Nestle India
Ltd and even Hindustan Unilever Ltd could see some competitive pressures emerging in some
product segments.

While the tangible benefits of the acquisition are one aspect, Kraft’s ability to absorb
Cadbury’s insights on the Indian market is more crucial. Cadbury’s transformation from a
decade ago has been remarkable. It has become more aggressive, launching new products
and variants, operating at several price points and thereby raising consumption, expanding
distribution, tweaking its chocolates to withstand a hot climate and making a big play at
capturing the festival gifting market.

Kraft’s ability to customize its products and marketing strategy to suit the Indian marketplace
is crucial; otherwise the potential will remain only on paper.

India's biscuit market goes global; local &

international brands vie for market share
A few years ago a biscuit brand in India made headlines when it became the world’s largest
selling brand. But the story was a tad different—it stated the obvious. India, the world’s second
most populated nation, was also the largest biscuit consuming country in the whole world. So, the
recognition, rather obvious, perhaps came in a trifle late.

But that may not hold long enough. The biscuit market is buzzing with new players. At stake is a
Rs 10,000-crore business, which is still growing. And every year, big and small players are
queing up for a share of the bite.

In the last one-year, two international companies have made an entry—UK’s United Biscuits and
GlaxoSmithKline. A few more including Pepsi and Kraft Foods are planning to make a foray.

“Kraft has a wide basket of products across the world, including biscuits. Which of these will be
introduced formally in India is currently under dialogue,” says Anand Kripalu, managing director,
Cadbury India . Kraft had taken over Cadbury in a $19.5 billion deal in February 2010, creating
the world’s largest confectioner.

Industry sources though say that Kraft has already signed a deal with a local biscuit manufacturer
and its entry into the Indian biscuits market should happen much earlier. Pepsi, on the other
hand, is in the process of developing a low-cost nutritional food product, which could also be a
biscuit product. The company’s spokesperson, however, denied it.

The per capita consumption of biscuits in the country has grown from a paltry 400 grams about
ten years ago to 1.5-2 kg today. While this is a huge change, India still lags behind other
countries like the US and UK where it is more than 10 kg and even behind many South East
Asian countries where it is 4.25 kg. It is this gap that is the opportunity for new companies eying
the Indian market.

For United Biscuits, India was a key, high consumption market where it did not have a footprint.
“This is what made it a natural choice to enter,” says Jayant Kapre, president of United Biscuits
India , which entered the Indian market last year. What helped the company was also the fact that
here it was just not volume growth but also higher value growth.

Over the last few years, players like Parle, Britannia and ITC have moved into the cookie and
high value segment to capitalise on the high growth and higher margins. Even though glucose
biscuits still sell much more in terms of volumes than any other segment, its share in the overall
pie has gone down. The share of glucose biscuits has dropped from 70% to 50% in about five
years.

Kraft Foods to provide food to 10,000 children in India

New Delhi: US-based confectionery and beverage corporation Kraft Foods will provide cooked
meals to over 10,000 children in 15 locations across India as part of its "Delicious Difference
Week" campaign from Oct 4 to 9.

The company is running this campaign in more than 40 countries around the world. In India,
this is Kraft's first initiative post integration with Cadbury. The company has partnered with
non-profit Akshaya Patra Foundation, which provides meals to underprivileged school children,
for this programme.

"Making a small difference in the communities in which we operate is a key part of our culture.
Through our delicious difference week initiative in India, we're helping in our own small way,"
said Anand Kripalu, president, South Asia and Indo-China, Kraft Foods.

"This year's delicious difference week is particularly special for us because it marks our first
employee volunteer event post the integration."

Kraft will also organise various events this week in association with hundreds of NGOs across
the globe.

Pepsi joins Kraft, UB, Glaxo in Rs 11,000 cr

biscuits market
NEW DELHI: Forget cola war, PepsiCo now wants to battle it out in the Rs 11,000-crore Indian
biscuits market that is getting chock-a-block with new entrants. The American food and
beverages maker, which launched Aliva baked crackers in 2009, will start test-marketing oats-
based premium cookies under its Quaker brand next month, two officials directly involved with the
development said.

PepsiCo India is among a slew of domestic and international companies rushing to the fastest-
growing processed food segment in the country, growing 20% a year, faster than noodles and
potato chips. “The category will explode this decade,” says Nikhil Sen, biscuits industry veteran
and MD of Bangalore-based biscuit maker Unibic India. American major Kraft Foods is expected
to kick off its India foray with biscuits some time this year.

Domestic company Marico too is reportedly planning a foray into the segment by acquiring Unibic
India, a subsidiary of Unibic Australia and makers of ANZAC Oatmeal cookies and Bradman
Chocolate Chip cookies. Speculation is rife that Marico, which makes Parachute hair oil and
Saffola cooking oil, will buy a 51% stake in Unibic for Rs 130 crore, though neither Marico nor
Unibic have confirmed the move.

Last year, Glaxo Smithkline Consumer Healthcare extended its milk foods drink brand Horlicks to
cream biscuits and cookies, while UK’s United Biscuits launched McVities digestives biscuits in
the country. Already, the two companies that dominate the Indian biscuit market — Parle
Products and Britannia Industries — is facing stiff competition from the Sunfeast brand of
cigarettes-tohotels firm ITC and smaller brands such as Priya Gold and Cremica.

The per capita consumption of biscuits in India is said to be 2 kg a year, while its 8 kg in the US
and 12 kg in the UK. “What’s unique to biscuits is that it’s perhaps the only packaged food
product that has universal acceptance; biscuits start at a very affordable price and are easily
available,” says Richa Arora, founder and chief strategy officer of consultancy firm Five by Six
Consulting.

While almost all biscuit companies have been pushing the Rs 2, 5 and Rs 10 price points through
glucose and salt biscuits to capture volumes , most of them also have a presence in the premium
segment – because they can make more profit and the demand is on the rise.

Kraft revamps developing markets strategy after

Cadbury
According to Reuters, Kraft Foods Co. is revising the brands and countries it will focus on in
developing markets as a result of its acquisition earlier this year of Cadbury Plc.
July 2, 2010
According to Reuters, Kraft Foods Co. is revising the brands and countries it will focus on in
developing markets as a result of its acquisition earlier this year of Cadbury Plc. Cadbury Dairy
Milk chocolates, Halls lozenges, and Tridentgum, three Cadbury brands, make the list of 10 “power”
brands getting the bulk of the marketing money in developing markets, said Sanjay Khosla, Kraft’s
President, Developing Markets and Global Categories. They
join Oreo cookies,Milka chocolate, Lacta chocolate, Jacobs coffee, Tang drink mix, Club
Social/TUC crackers, Biskuat/Tiger biscuits, Khosla said.
Kraft already had a strategy in place in which it focused on 10 “power” brands that could be grown
globally, 10 key developing markets, and five categories. But the $18.4 billion acquisition of Cadbury
meant the members of that template had to change.
The new top 10 brands account for more than 40% of the $12 billion in revenue Kraft gets from
developing markets like China and Mexico. Developing markets make up about 26 of Kraft’s total
business.
As Kraft changes its brand focus, its focus markets are changing as well. One of the key benefits of
buying Cadbury was its distribution infrastructure in the vast India market, and Khosla said India is now
one of the 10 focus markets. Other focus markets under his purview are Brazil, Australia, Russia,
Mexico, China, Ukraine, Poland, South Africa, and Indonesia. Markets that are out of the top 10
include the Czech Republic, the Philippines, and the Middle East.

Cadbury Acquisition Should Sweeten

Kraft's Stock
Kraft Foods (KFT), the world’s second largest food & beverage company after Nestlé,
completed its acquisition of the confectionery giant Cadbury early this year for the
whopping sum of $19.5 billion. Many criticized Kraft’s management for this deal,
given that the company had to sell its lucrative North American pizza business to
Nestlé in order to generate sufficient cash.

We expect the Cadbury acquisition to add a net $4 billion to Kraft’s market cap.
Below we discuss the importance of the confectionery business (chocolate, candy
and gum) to Kraft’s stock, and how Cadbury brings additional value to this business.

Chocolate, Candy and Gum constitute 32% of Kraft’s stock

Going forward, we estimate that chocolate, candy and gum sales will account for
around 32% of the $35.64 Trefis price estimate for Kraft’s stock. Much of this
contribution can be attributed to the Cadbury acquisition.

Here’s what Cadbury does for Kraft’s confectionery market share:

1. Kraft’s triples its share of global chocolate and candy sales

Before the Cadbury merger, Kraft was a bit player in the global chocolate and candy
market, with a total share of around 5.5%-6%. Its primary offerings were Milka and
Toblerone chocolates.

With the addition of leading Cadbury brands such as Dairy Milk, Creme Egg, Eclairs
and Halls, Kraft is expected to gobble 15% of the global chocolate and candy market
in 2010.

2. Kraft’s becomes the #2 global gum manufacturer

Cadbury’s strong gum portfolio includes popular brands such as Trident, Chiclets,
Stimorol and Dentyne. As a result, Kraft’s share in the global gum market has soared
from 0.1% in 2009 to around 27% in 2010. Kraft is now second only to Wrigley
(WWY), which controls 35% of the market.

In addition, Kraft can leverage Cadbury’s strong distribution channels and retailer
partnerships in emerging markets such as India to promote its other products.

Cadbury Boosts Kraft’s Market Cap

We estimate that the Cadbury acquisition adds a net $4 billion to Kraft’s market cap,
after subtracting the $19.5 billion cash purchase price. You can modify our forecast
for Kraft’s share in the chocolate/candy and gum markets in the charts above to see
the impact on the Trefis forecast of $35.64 for Kraft’s stock price.
Kraft Growth Plan: Better Late Than Never
Kraft Foods (KFT), even before buying Cadbury earlier this year for $19.6 billion, had
a great portfolio of processed food brands. And well before being fully spun off from
Altria (MO) in 2007, Kraft had embarked on a five-year restructuring plan – taking
about $3 billion in charges and aiming to ax some 18,600 workers – to wring more
value and growth out of those brands, which include Oreo, Nabisco, Kraft Cheese and
Oscar Mayer meats.

If you’re a shareholder, sadly, the results have not been impressive.

KFT Stock Chart

The basic problem, of course, is growth. Kraft already has dominant market shares in
many of its product lines. And human beings – even us gluttonous Americans — can
eat only so many sugary, salty or fatty snacks. Procter & Gamble (PG) and other
packaged goods makers suffer from the same syndrome of being so big in many
markets that growth is limited.
Poor Irene Rosenfeld, Kraft’s CEO, suffered the added humiliation of having Warren
Buffett, whose Berkshire Hathaway (BRK.B) is her largest institutional shareholder,
with a roughly 8% stake, publicly call her Cadbury acquisition “a bad deal.” Buffett
doesn’t frequently trash the moves of CEOs at companies in which he’s a holder. He
also questioned Rosenfeld’s move to sell Kraft’s frozen pizza business for $3.7 billion
to help finance the Cadbury deal.
Even with the pizza sale, the Cadbury deal pushed long-term debt way up at Kraft.
KFT Stock Chart
That gives the company somewhat less financial flexibility, especially since it has in
recent years paid out nearly 60% of its profits in dividends.
KFT Stock Chart

So, Rosenfeld didn’t waste much time in announcing, on September 15, that Kraft
had a new global growth strategy. Maybe that would get the Old Boy in Omaha off
her back.

The plan actually sounds more like a set of financial promises – 5% “organic” revenue
growth, meaning excluding acquisitions; margins in the mid-to-high teens; and per
share net growth of 9-to-11%. Squeezing out costs to boost margins seems doable,
and Kraft can certainly get closer to its EPS goals with the aid of share buybacks, if
need be. Kraft spent about $7 billion on buybacks during the years 2004-2008,
watching the stock slide sideways, but reducing shares outstanding and thus
boosting EPS.

The growth part will be trickier, and Kraft seems to be counting on poorer countries
to scarf up more Oreos and such. Developing countries should account for one third
of sales by 2013, Kraft said, vs. about one fourth now. Everyone likes an Oreo, but
Kraft may find that pricing gets tougher as it pushes deeper into developing
economies, and that could make hitting its goal on profit margins more difficult.
The early going in 2010 isn’t entirely encouraging. Kraft had been predicting revenue
growth without acquisitions (“organic”) of 4% for this year. But by August 5,
management had apparently lost confidence in even that meager improvement,
adjusting the projection to a range of 3-to-4% growth.

Perhaps the five-year restructuring plan, completed in 2008, was just a warm-up for
what’s to come. Rosenfeld, in announcing her new growth plan, spoke of
“establishing a world-class cost structure.” To workers who spent years waving
goodbye to those 18,600 colleagues, Rosenfeld’s goal might sound a little
frightening. Of course Rosenfeld didn’t rejoin Kraft and become CEO until June 2006 –
with Kraft well into the earlier restructuring — and every boss deserves her own
swing of the ax.

Kraft said its four key strategies are to rewire its organization for growth, make its categories more relevant
to consumers, exploit its sales capabilities and drive down costs.

Kraft plans India foray with confectionery

The Kraft-Cadbury combine is likely to herald its presence in India with confectionery products. The reasons
are evident.

For one, this February, when shareholders of British candy maker Cadbury Plc approved Kraft Foods' $19.5-
billion takeover, it created the world's largest confectioner. Second, industry sources aver that Kraft is
betting on the confectionery segment since, globally, 29 per cent (highest contributor) of its revenues in
2009 came from this division.

Third, in India, the confectionery market is Rs 4,500 crore in size -- double that of the chocolate market,
which is closer to Rs 2,000 crore, estimate industry observers. Confectionery, too, is growing at a steady clip
of about 15 per cent, which Kraft would want to capitalise on.

Confectionery is definitely an area that requires beefing, say persons familiar with the development.

Though Cadbury has an over 35 per cent share in confectionery with two candies — Halls and Eclairs —
and one gum called Bubbaloo, there is more that can be done.

Kraft, they add, may leverage Cadbury's international portfolio to expand the confectionery side of the
business.

Anand Kripalu, managing director, Cadbury India, and president, South Asia and Indo-China, for the
combined Kraft Foods entity (which is yet to be christened), declined to divulge any details or give any
timeline for launch of the products. "I cannot comment on the integration and how it will pan out. Kraft in
India is small. Three products are being distributed -- Tang, Toblerone and Oreo. At some stage in the
future, the operations of this will be routed through the merged entity. It is too early to speak about the
integration at this stage."
However, an executive of a rival FMCG firm says: "The purpose of the Cadbury acquisition was to give Kraft
a strong presence in chocolates and confectionery — two areas they see as high-growth and high-margin. It
makes sense to give the confectionery business a boost. It's in line with their global strategy."

Kraft, however, will not leave the chocolate segment unattended. It has Toblerone, which is already
distributed in India through distributors Universal Corporation and Barakat Foods & Tobacco. This will be
routed through the merged entity. Cadbury remains the dominant player in the chocolate category, with an
over 70 per cent share in the country. Toblerone, say industry sources, will sit at the premium end of the
merged entity's chocolate portfolio.

This strategy of identifying premium products, they say, is likely to drive Kraft through the categories it marks
its presence in. "I am not surprised if the company is looking to do that," says Shirish Pardeshi, senior
FMCG analyst at brokerage firm Anand Rathi. "Barring chocolates, where Cadbury is present, attempting to
enter allied food categories from the lower end is not going to be easy. You have strong incumbents sitting
there, plus regional and unorganised players. The premium end is a bit less crowded in that sense. You are
also not dependent on pricing alone, which you are at the lower end of the market," he says.

Once chocolates and confectionery are taken care of, Kraft is likely to devote its attention to biscuits -- a
segment where it already has a strong brand, Oreo, distributed by Universal and Barakat. Kraft is likely to
restrict itself to the premium end -- something that rival Britannia [ Get Quote ] has been doing over the last
few years. Says Pardeshi, "In biscuits, value-for-money is driven by the glucose platform, dominated by
Parle. If you have to make a difference, you have to move up, which is what Britannia, even ITC, have been
doing," he says. "Kraft would probably have to play the same game whether it is with Oreo, which is a
cookie, or Nabisco, which rides on the health platform."

After biscuits will follow Kraft's much-awaited dairy foray. People in India are already familiar with the blue-
coloured circular box that has the picture of a cow on it. Kraft cheese has been circulating in India through
grey channels for long. The company, say industry sources, is likely to leverage this familiarity that Indians
have for the product by formally launching it in India. Though Kraft is known for its cheese, in 2009, it
derived only 14 per cent of its revenues from this business.

Even as it gears up for a likely foray into these segments, Kraft is said to be looking at a debut in foods as
well. "This will be interesting to watch," says the managing director of a rival FMCG firm. That is because
Kraft takes on a whole host of established players in the segment — from arch rival Nestle [ Get Quote ] to
Hindustan Unilever to ITC Foods. Globally, Kraft derived 10 per cent and 8 per cent of its revenues from
convenient meals and grocery, respectively.

Cadbury India, meanwhile, has effected management changes to head the Kraft Foods and Cadbury
combine in Indo-China and South Asia. The new team is headed by managing director Anand Kripalu, who
is president, South Asia and Indio-China, Kraft, while Chandramouli Venkatesan, earlier in charge of HR, will
now manage the chocolate portfolio, besides heading strategy, and Narayan Sundararaman, an internal
candidate, has been put in charge of powdered beverages, gum and candy.

SWOT ANALYSIS ON Kraft Foods - November 25th, 2010

Kraft Foods Inc. is the largest confectionery, food, and beverage corporation headquartered in the
United States.[4] It markets many brands in more than 155 countries. 11 of its brands annually
earn more than $1 Billion worldwide: Kraft, Cadbury, Oscar Mayer, Maxwell House, Nabisco, Oreo,
Philadelphia Creme Cheese, Jacobs, Milka, LU, and Trident. 40 of its brands are at least 100 years
old.

The company is headquartered in Northfield, Illinois, a Chicago suburb. Its European headquarters
are just outside Zürich, Switzerland.

Kraft is an independent public company, it is listed on the New York Stock Exchange and became a
component of the Dow Jones Industrial Average on September 22, 2008, replacing the American
International Group.

Strengths

* Scale & positioning in key food categories

* Financial strength and business scale
* Diverse range of leading brands
* World%u2019s second-largest food company
* Approximately $50 billion in revenues
* Sales in approximately 160 countries
* 25% of global revenue from emerging markets
* #1 in global confectionery
* #1 in global biscuits
* More than 50% of global revenue from snacks and confectionery

[*]has high quality of products

Weaknesses

* Difficulty launching new brands

* Most of growth is dependent on acquisitions or expanding into new markets
* Poor stock performance
* Low growth in United States Market
* Strong competition from Nestle, Hershey, etc.

Opportunities

* Dog food
* Operates in many fast growing categories
* International markets
* New categories, products (i.e., organic, health-focused)
* Value in leading brands
* Cadbury acquisition opens up new markets
* Cadbury acquisition provides new products

Threats

* Competition from Mars Inc, Nestle SA

* Lower consumer discretionary spending
* Volatile resource costs, i.e. sugar, corn
* Store branded products
* Difficulty expanding into new markets
* Poor implementation of Cadbury acquisition
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Cadbury acquisition eats into Kraft Foods' profit

11 February 2011 179 Views

The costs stemming from its acquisition of UK confectionary business Cadbury have prompted a 24 per cent
drop in fourth-quarter profits for Kraft Foods.

Rising ingredient prices for commodities such as corn, sugar and cocoa, also ate into the US food giant's
earnings, with net income falling to $540 million (£335 million) in the final three months of 2010.

However, revenues across the entire Kraft Foods business increased by 30 per cent, to $13.8 billion, with a
26.2 percentage point contribution from Cadbury, which the firm purchased last February for £11.5 billion.

Chief executive Irene Rosenfeld said the company's 2010 results represented solid progress and Kraft had
ended the year with strong momentum.

"Looking ahead, we expect the operating environment to remain challenging, with significant input cost
inflation and persistent consumer weakness in many markets," she added.

Earlier this week, meat and beverage producer Sara Lee announced that company profits had more than
doubled in its second quarter, despite the soaring cost of ingredients.

Kraft Foods lays out new global

growth strategy
Kraft Foods Inc. presented its new global growth strategy at a meeting of analysts
and investors in New York on September 15. The comprehensive review of the
company's power brands, global categories and regional business units detailed the
plan by which Kraft Foods will deliver organic revenue growth of 5 percent or more,
margins in the mid- to high-teens and earnings per share (EPS) growth of 9 to 11
percent, making it a top-tier performer in the global food industry.

"Today's Kraft Foods is a global snacks powerhouse with an unrivaled portfolio of

leading regional and local brands," said Irene Rosenfeld, chairman and CEO. "This
unique and complementary combination, together with our significant presence in
high-growth developing markets, will deliver consistent growth in the top tier of our
peer group.
"At Kraft Foods, we're hitting our sweet spot," she added. "We've built a solid
foundation for growth. By leveraging our scale, making strategic investments in
marketing, sales and innovation and establishing a world-class cost structure, we will
take our performance to the next level."

Unique Combination of Snacks and Heritage Brands

With the acquisition of Cadbury earlier this year, Kraft Foods became the undisputed
world leader in Snacks, a high-growth, high-margin category that now accounts for
more than half of the company's total revenue.

The company has an exceptional portfolio of global Snacks power brands – led by
Milka and Cadbury chocolates, Oreo and LU biscuits and Trident gum – with leading
market shares in every major region, a full pipeline of innovation and a clear
opportunity to grow its presence in the point-of-purchase "hot zone."

Kraft Foods now offers dozens of brands of chocolate, gum, candy, and snack-size
cookies, crackers and nuts through multiple distribution channels, from traditional
groceries to convenience stores.

Complementing the company's Snacks portfolio are well-loved iconic regional and
local brands in the beverage, grocery, cheese and convenient meals categories.
Roughly 80 percent of these "heritage" brands hold No. 1 or No. 2 positions in their
respective categories and are household names among consumers who tend to be
extremely brand-loyal. They also carry high margins and generate strong cash flow.

Kraft Foods will continue to invest in marketing and innovation for the larger regional
"power brands," including Oscar Mayer meats, Jacobs coffee and Tang powdered
beverages. At the same time, the company will cultivate local brands, such as A-1
steak sauce in North America, Dairylea cheese in the United Kingdom and Vegemite
spreads in Australia, through flexible business models and nimble marketing.

This combination of global powerhouse snacks brands and iconic heritage brands
provides Kraft Foods with a unique capability to invest profit from stable cash-
generating businesses into high-margin categories and fast-growing Developing
Markets.

Financial Transformation
The combination of Kraft Foods and Cadbury provides the scale necessary to grow
sales and distribution in new and existing markets, delivering $1 billion in
incremental revenue synergies - in addition to $750 million in cost synergies - by
2013.

More than half of Kraft Foods' revenue now comes from markets outside of North
America, such as Brazil, China, India and Mexico, where GDP and demand growth
are strongest. Accordingly, by 2013, the proportion of business in Developing
Markets will increase from a quarter of total revenue to roughly one-third.

Additional savings over the next three years from procurement, manufacturing and
logistics will drive productivity gains in excess of 4 percent of cost of goods sold.
These productivity gains, combined with flat overhead growth and pricing to offset
input costs, will contribute to the expansion of gross margin.

"This combination of factors gives us great confidence that our company will
generate organic revenue growth of 5 percent or more, margins in the mid- to high-
teens and EPS growth of 9 to 11 percent," said Tim McLevish, chief financial officer.
"Delivering on these commitments will make Kraft Foods a sustainable top-tier
performer in the global food industry."

About Kraft Foods

Kraft Foods is building a global snacks powerhouse and an unrivaled portfolio of
brands people love. With annual revenues of approximately $48 billion, the company
is the world's second largest food company, making delicious products for billions of
consumers in approximately 170 countries. The portfolio includes 11 iconic brands
with revenues exceeding $1 billion – Oreo, Nabisco and LU biscuits; Milka and
Cadbury chocolates; Trident gum; Jacobs and Maxwell House coffees; Philadelphia
cream cheeses; Kraft cheeses, dinners and dressings; and Oscar Mayer meats.
Approximately 70 brands generate annual revenues of more than $100 million. Kraft
Foods is a member of the Dow Jones Industrial Average, Standard & Poor's 500, Dow
Jones Sustainability Index and Ethibel Sustainability Index.