Sustainability as a Business Strategygy

October 7, 2010

We’ll discuss our…

Approach Projects&Approach Projects&

d i bili… around sustainability

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Our Structure

In 2006 CEO & Board made Sustainability i it t K ft F da priority at Kraft Foods

We moved sustainability out of Public Affairsy

Created small, global team at center to set strategicdi ection and p o ide g idance into the b siness nitsdirection and provide guidance into the business units

Focused efforts into six core areas

Established measurable goals

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We’re leveraging sustainability as a business strategy

E i

Economic

EnvironmentSociety

Economic

Sustainability Sustainability LensLens

Social Environmental

Manage costs/deliver savings Drive growth Risk Management

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Driving productivity & growth through sustainability-related projects

A focused approach has us on the path for positive change

The Sustainability Wheel

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The Sustainability Wheel

Our goals keep us on track…

GoalsGoals TargetsTargets ActualsActuals (thru ’09)(thru ’09)

Energy Reduce by 25% Down 15%

Energy-related carbon dioxide emissions Reduce by 25% Down 17%

WaterReduce by 15%

Reset goal to 35% Down 32%

Waste Reduce by 15%

Reset goal to 35% Down 30%

Reset goal to 35%

PackagingEliminate 150MM pounds

Reset to 225 MM pounds174MM pounds out

6Base Year: 2005All Goals to be achieved by year end 2011

All of this is helping us leave aBetter World behind…

We’re integrating g gsustainability into our

businessbusiness…

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Consumer demand helpsfuel the fire...By understanding the “green” consumer

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All of this is helping us leave aBetter World behind…

www kraftfoodscompany comwww.kraftfoodscompany.com

www.kraftfoodsbetterworld.com

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Responsibility Report

Agricultural Commodities

Kraft Foods is a major supporter of twop og ams in Af ica fo cocoa and cashe s programs in Africa for cocoa and cashews Co-funded by the Bill & Melinda Gates FoundationHelp increase farmer incomes by improving:

Productivity & yield at the farm level Supply chain efficiencyCrop selection, marketing & added value

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Agricultural Commodities

Since 2003, we’ve collaborated with the Rainforest Alliance to provide coffee consumers with high-quality coffee that has been farmed in a coffee consumers with high quality coffee that has been farmed in a sustainable way

In 2009, we were the largest buyer of Rainforest Alliancecoffee and cocoa beans worldwide

Committed to expand to all of Cote d’Or and Marabouh l t d t

~34,000MT coffee in ‘09 7 100MT cocoa in ‘09

chocolate products

~ 7,100MT cocoa in ‘09

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Agricultural Commodities

In 2009 Cadbury Fairtrade launched FairtradeIn 2009 Cadbury Fairtrade launched FairtradeCadbury Dairy Milk in the UK and has expanded to Australia, New Zealand, Canada, and South Africa

Recent public commitment to expand to Recent public commitment to expand to Green & Black’s, which is already organic

Combined Rainforest Alliance & FairTrade: Products in more than 15 brands in the Kraft Foods family currently use these seals

Packaging

1MM lb Reduction More Efficient Design

.7MM lb ReductionSourcing Sustainably

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TerraCycle takes non-recyclable packaging & finds a new use for it

• Kraft is the largest sponsor of TerraCycle brigades– Nearly 40,000 brigade locations and millions of people collecting

Swaste across USA– Kraft Foods is supporting in Canada, Brazil, Mexico and UK.

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Energy

Turning Wastewater into EnergyAnaerobic digestion at our Campbell and Lowville NY Anaerobic digestion at our Campbell and Lowville, NY facilities produces bio-gas

Replaces 30% of the facilities’ fossil fuel needs

Lowville, NY

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Campbell, NY

Reducing our energy use

Distribution Center

• Underground warehouse leverages geothermal

Springfield, MO

• Underground warehouse leverages geothermal

• 65% less energy than conventional warehouse

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Transportation & Distribution

Eliminates 4MM lbs of CO2!!

Delivering wheat by ships24 ships/yr

1.7MM lbs CO2

Delivering wheat by shipsinstead of trucks

10,200 trucks/yr5.7MM lbs CO2

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Supply-Chain Related Projects

• We are a member of PROGRESS (Programme for Responsible So cing)Responsible Sourcing)– A forum of leading brand producers of Fast Moving Consumer

Goods (FMCG) companies who wish to develop and implement th d f l ti th CSR f f th i common methods of evaluating the CSR performance of their

suppliers – Evaluates suppliers on 4 pillars:

E i t• Environment• Health & Safety• Labor Standards• Business Integrity• Business Integrity

– Each member of PROGRESS independently evaluates questionnaire and audit results

Recognition

• Dow Jones– North America Index for the sixth year in a rowNorth America Index for the sixth year in a row– World Index for fifth year in a row– 2010:

• Food industry’s leading scores in operational eco efficiency for a • Food industry s leading scores in operational eco-efficiency for a third year in a row

• Leading scores in innovation management, codes of conduct/compliance and corporate citizenship/philanthropyp p p p py

• Carbon Disclosure Project– Since 2005 have participated, when started reporting Scope 1

d S 2 i i and Scope 2 emissions – In 2009, started reporting on a portion of Scope 3, getting

more refinement each year– In 2010, made the Carbon Disclosure Leadership Index for the

first time