Working to
Build a Better
World
Kraft Foods Responsibility Report
Kraft Foods Responsibility Report
Every day,
around the world…
a 2 b
Kraft Foods Responsibility Report
we’re working to make a
delicious difference.
a 3 b
Kraft Foods Responsibility Report
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.
a 4 b
a 5 b
Kraft Foods Responsibility Report
Message from
Our Chairman and
Chief Executive Officer
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.
Kraft Foods Chairman and CEO Irene
Rosenfeld rolls up her sleeves at the
Community FoodBank of New Jersey,
U.S., alongside employee Mark Barash
and more than 12,000 other employee
volunteers worldwide during Make A
Delicious Difference Week in 2009.
Irene B. Rosenfeld
Chairman and Chief Executive Officer, Kraft Foods
April 2010
Message from Our Chairman and Chief Executive Officer
Index
a 6 b
Kraft Foods Responsibility Report
Our efforts and results are captured under
the following seven headings:
Sustainability
Hunger and affordable nutrition
Health and well-being
Food safety and quality
Workplace and culture
Compliance and integrity
Corporate governance
7
8
23
28
33
Seven areas of concentration
At-a-Glance
Sustainability
Hunger and affordable nutrition
Health and well-being
Food safety and quality
37
41
44
46
Workplace and culture
Compliance and integrity
Corporate governance
Assurance Statement
Index
a 7 b
Kraft Foods Responsibility Report
At-a-Glance
We’re the largest purchaser of coffee and cacao
beans from Rainforest Alliance Certified™ farms.
34,055
Kraft Foods
coffee and cacao
bean buying
volumes
(metric tons)
• coffee
• cacao
We’ve cut our
packaging by over
174 million
pounds
*
7,100
2005
2006
2007
2008
We’ve reduced water
consumption by
p 32%
*
In the U.S. alone, between 1999
and 2009, we’ve provided over
1 billion servings
of food.
2009
(nearly 79,000 metric tons)
We’ve reduced
our waste by
We’ve cut greenhouse gas emissions
and energy use, respectively, by
p 17% p 15%
*
greenhouse
gases
*
energy
use
We’ve cut
p 30%
*
50 million miles
*
(80 million kilometers) from our
global transportation network.
Women make up
35% of management
worldwide.
Over 5,000 better-for-you
products launched
since 2005.
Currently, 43% of our salaried
employees are women.
Roughly 30% of our portfolio.
*Statistics regarding waste, packaging, greenhouse gases, energy, water use, and transportation are indexed to net sales and based on a 2005 baseline.
At-a-glance
This section was last updated JANUARY 2010.
Index
a 8 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Making
Sustainability
a Way of
Doing Business
“Development that meets the needs of the
present without compromising the ability of
future generations to meet their own needs.”
United Nations–sponsored Brundtland Commission Report
SUSTAINABILITY
Workplace
and culture
compliance and
integrity
corporate
governance
Sustainability is about “meeting the needs of
the present without compromising the ability
of future generations to meet their own needs.”
It’s about conducting business in a way that
is environmentally, socially and economically
responsible. It’s about living today, while being
mindful of tomorrow.
As a food company, we’re especially dependent
on the earth for the raw materials we use every
day to make quality products for our consumers.
And we need to do our part to ensure that the
earth’s resources are properly managed.
The demands being placed on the planet
are growing. Experts project that the world’s
population is going to reach 9.0 billion by
2050. And standards of living are expanding
in much of the developing world. This all puts
incremental strain on the planet. In some
areas, experts find that natural resources
are being depleted faster than the earth can
replenish them. Clean water and arable land
are becoming more and more scarce.
Change is necessary. And we realize we have
a role to play. We are changing the way we
conduct our business both directly and
indirectly to become more sustainable.
This section was last updated January 2010.
Index
a 9 b
Kraft Foods Responsibility Report
Hunger and
Affordable
Nutrition
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
The environmental, societal and economic
challenges that face our planet require
collaboration and cooperation. So we’re working
with peer companies, governments,
nongovernmental organizations, farmers,
suppliers, consumers and others to find
innovative solutions.
Six areas of focus
c
ti
on
nuou
s i m p rove
TRANSPORTATION/
DISTRIBUTION
nt
AGRICULTURAL
COMMODITIES
design
WASTE
me
WATER
PACKAGING
ENERGY
Sustainability Wheel
• Six areas of focus
• Design sustainability in upfront
• Continuously improve going forward
SUSTAINABILITY
Sustainability is a companywide priority. To
guide us, we’ve developed the “Sustainability
Wheel.” It represents our focus areas and serves
as the framework and our intention for building
sustainability into everything we do. We’re con­
centrating on the issues most relevant to our
business and the areas where our support can
make a difference: agricultural commodities,
packaging, energy, water, waste, and transportation
and distribution. We use the wheel to measure
and reward improvement, and to continually
advance our efforts throughout our system.
To keep us on track, we set aggressive goals.
Measuring against total production and using
2005 as our base year, by year-end 2011,
we plan to:
• Reduce energy use in our manufacturing
plants by 25 percent
compliance and
integrity
corporate
governance
• Reduce energy-related carbon dioxide
emissions in our manufacturing plants
by 25 percent
• Reduce water consumption in our
manufacturing plants by 15 percent
• Reduce waste at our manufacturing
plants by 15 percent
• Eliminate 150 million pounds
(68,000 metric tons) of packaging material.
As we’ve increased our sustainability efforts,
we’ve become more transparent. Measuring our
impact on the environment helps us evaluate
our progress and determine where to consider
improvements and adjustments. That’s why we
ask independent, third-party companies to
verify our progress.
Our environmental performance indicators
(EPIs) for our manufacturing facilities are
verified by Environmental Resources
Management (ERM), a global environmental
management and technical consulting firm.
We also use environmental management
systems in our facilities worldwide. These
systems comport with widely recognized
standards and guidelines issued by the U.S.
Environmental Protection Agency and the ISO
14001 Environmental Management standard.
This section was last updated January 2010.
Index
a 10 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Agricultural
Commodities
“We are all responsible for
ensuring the long-term health
of our planet. As the leading
purchaser of coffee and cocoa
from Rainforest Alliance
Certified™ farms, Kraft Foods
is doing its part by helping
farmers earn a good living as
they conserve wildlife habitats
and the vital natural resources
on which we all depend.”
Tensie Whelan
President, The Rainforest Alliance
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
In 2009, the environmental management
systems for 134 of Kraft Foods’ manufacturing
facilities around the world met the requirements
of ISO 14001, and we’re working toward
100 percent compliance throughout our
network. The ISO 14001 standard is a premier
benchmark for management tools to help
minimize negative environmental impacts.
ISO 14001 certification goes beyond
compliance, aligning locations to the same
overall sustainability goals and sets the stage
for their continuous improvement.
Growing our commitment to
sustainable agriculture
For Kraft Foods, sustainability starts at the
farm. Sustainable agriculture promotes the
long-term viability of crops, the preservation
of fertile soil, the economic well-being of
farmers and farming communities, and the
health of ecosystems. We’re working with
partners around the world to increase our
support of sustainable farming.
compliance and
integrity
corporate
governance
One of our principal collaborators is the
Rainforest Alliance. We started working with
the Rainforest Alliance in 2003 on coffee and
that year purchased nearly 2,500 metric tons
(more than 5.5 million pounds). Since then we
have increased our purchases twelvefold.
In 2009, we bought more than 34,000 metric tons (more than 75 million pounds) of coffee
from Rainforest Alliance Certified™ farms.
That’s a 15 percent increase over 2008. The
Rainforest Alliance Certified coffee we bought
in 2009 helped support 300,000 farm workers
tending 60,000 hectares (148,000 acres) in
12 countries in Africa, Central America, South
America and Southeast Asia.
We currently have nine coffee brands in North
America and Europe that carry the Rainforest
Alliance Certified seal, and customers have
responded enthusiastically. In the UK, our
Kenco brand generated double-digit revenue
growth. And in Sweden, sales of instant and
espresso coffee doubled for one of our “away
from home” customers.
This section was last updated January 2010.
Index
a 11 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Agricultural
Commodities
Fourteen Kraft Foods brands carry the
Rainforest Alliance Certified Seal.
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
In 2005, we expanded our work with Rainforest
Alliance to cocoa. In 2007, we purchased our
first certified beans to use in a portion of our
Côte d’Or premium chocolate line. We launched
Côte d’Or products carrying the Rainforest
Alliance Certified seal in 2009. We’re working
toward using Rainforest Alliance Certified beans
across our Côte d’Or and Marabou lines—equal
to 30,000 metric tons (over 66 million pounds)
annually—by 2012. In 2009, we increased our
purchased volume by 110 percent versus 2008,
to 7,100 metric tons (16 million pounds).
compliance and
integrity
corporate
governance
World Cocoa Foundation with $40 million
in cash and related support to increase the
incomes of small-scale farmers in Cameroon,
Côte d’Ivoire, Ghana, Liberia and Nigeria.
Today, we are the largest buyer of coffee and
cacao beans from Rainforest Alliance Certified
farms. To earn certification, farms must meet
rigorous standards set by the Sustainable
Agriculture Network, an international coalition
of leading conservation groups. The standards
address water pollution, soil erosion, pesticide
use, wages and conditions for workers, wildlife
and more.
The African Cashew Initiative is managed
by Deutsche Gesellschaft für Technische
Zusammenarbeit GmbH (GTZ) and provides
around $50 million in cash and related support
to train producers and link them with local
processing facilities in Benin, Burkina Faso,
Côte d’Ivoire, Ghana and Mozambique.
The program also promotes the value of byproducts and builds incentives for local African
processing capacity. Through both the cocoa
and cashew initiatives, we hope to help break
the cycle of poverty for 200,000 cacao farmers
and 150,000 cashew farmers. And the results
are starting to materialize. In 2009, we purchased
32 container loads (1.1 million pounds/
500 metric tons) of cashews that were grown
and processed in Sub-Saharan Africa.
In early 2009, we joined other industry,
government and nongovernmental partners
in two Bill & Melinda Gates Foundation
initiatives that will invest $90 million over five
years to advance sustainable production of
cocoa and cashews in West Africa—and improve
the lives of farmers in the process. The Cocoa
Livelihoods Program is managed by the
Since 2004, we’ve been an active member of
the World Cocoa Foundation, a membershipbased, nonprofit foundation. With nearly
70 members, the World Cocoa Foundation
promotes a sustainable cocoa economy through
socioeconomic development and environmental
stewardship in cacao-growing communities in
Latin America, Southeast Asia and West Africa.
This section was last updated January 2010.
Index
a 12 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Agricultural
Commodities
“Soon, 9 billion people will seek
to improve their lives in the
context of a single planet.
And every business in every
industry will be forced to
grapple with finding ways
to meet their needs while
using less water, carbon
and land. We work with
companies like Kraft Foods
that are willing and able to
influence the future of the
planet by working to positively
advance the way agricultural
commodities are produced,
bought and sold.”
Carter Roberts
President and CEO,
World Wildlife Fund, U.S.
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
We’re also one of several companies that have
joined the World Cocoa Foundation and United
States Agency for International Development
(USAID) in creating a program called ECHOES—
an acronym for Empowering Cocoa Households
with Opportunities and Education Solutions.
ECHOES strengthens cacao-growing com­
munities in Côte d’Ivoire and Ghana by training
young people in vocational agriculture. Students
learn sustainable farming methods as well as
life and leadership skills. Many of the young
adults go on to start new, modern farms.
The ultimate goal of the program is to serve
as a replicable model throughout West Africa.
As part of the ECHOES program, we’ve helped
train more than 5,200 students and more
than 7,100 teachers to promote sustainable
cacao farming.
In addition to the initiatives outlined above,
we’re helping to make farming more sustainable
by engaging with our partners in a variety
of ways.
compliance and
integrity
corporate
governance
agriculture and to providing nutritional
and affordable foods. The New Vision for
Agriculture reflects a shared belief that
sustainable agriculture is a critical factor in
solving multiple problems—including hunger,
poverty and environmental degradation.
Partners in the initiative intend to release
recommendations in early 2011 that will
identify regions of concentration, opportunities
for investment of public funds, and a shift
toward helping the people in the countries
that receive such funds to help themselves.
• We’re also working with nongovernmental
organizations like the World Wildlife Fund
and Conservation International to assess
the sustainability of certain raw materials
such as coffee, cacao and cashews. They’re
looking at Africa, Asia and Latin America,
where we buy most of our ingredients. Based
on the assessments, we’re evaluating options
for sustainable product sourcing.
• In 2009, we joined other members of the
World Economic Forum in an initiative called
the New Vision for Agriculture. The initiative’s
objective is to address the historical underinvestment in agriculture. It seeks to expand
the public-private collaboration that is crucial
to accelerating growth in sustainable
This section was last updated January 2010.
Index
a 13 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Agricultural
Commodities
“CARE is pleased to be working
alongside Kraft Foods to
improve the lives of people
living in poor communities.
Through savings, education,
entrepreneurship and
innovative technologies,
thousands of cocoa farmers
are benefiting from more
sustainable cocoa farming
systems. Together, Kraft Foods
and CARE are making a real
difference in the lives of
many rural families around
the globe.”
Helene D. Gayle MD, MPH
President and CEO, CARE
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
• We partner with CARE, one of the world’s
• We’re a member of the Sustainable
leading humanitarian agencies, to create new
Agriculture Initiative (SAI) Platform created
opportunities for cacao farmers in Brazil and
by the food industry to advance sustainable
Ghana. In Brazil, the program is targeting
farming for a variety of commodities. SAI
over 220 cacao-farming families with training
Platform has harmonized the definition
and education for improving cacao
of sustainable agriculture in a clear set of
production. The program is also fostering
principles and advises, informs and trains
farmers’ entrepreneurial skills and helping
personnel of member companies to promote
them diversify their sources of income. In
knowledge sharing and use of best practices.
Ghana, the partnership is helping 2,500
• We are a founding member and financial
young farmers increase their cacao yields—
supporter of 4C Association, originally
thereby increasing their household incomes—
known as the Common Code for the Coffee
as well as reducing children’s responsibilities
Community. This coalition of producers,
on cacao farms so they can go to school and
trade, industry and nongovernmental
thrive. Together, we are helping to provide
organizations aims to help farmers lower
opportunities for cacao-growing families—
their costs, improve quality and efficiency,
opportunities that will help to lift them, and
and gain access to markets and credit.
their communities, out of poverty.
• In Europe and the United States, we’re
• We contribute to a World Wildlife Fund
developing ways to source wheat for our
program that preserves biodiversity and
biscuit and snack businesses in a more
protects wildlife while improving the incomes
integrated way that aims to reduce
of farmers in regions of Sumatra, Indonesia,
environmental impact.
where we source some of our coffee.
• We support the World Cocoa Foundation’s
Sustainable Tree Crops Program of the
International Institute of Tropical Agriculture,
which encourages the use of fewer pesticides,
improves farm conditions and productivity,
and promotes socially responsible production
methods.
This section was last updated January 2010.
Index
a 14 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Agricultural
Commodities
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Addressing key issues in
the supply chain
Cocoa labor issues Kraft Foods is involved
in substantial efforts to address forced labor
and the worst forms of child labor in cacao
farming. While we don’t own or control any
farms, we remain committed to working with
others to address this issue.
Since 2001, we’ve worked with U.S. government
officials, the governments of Côte d’Ivoire and
Ghana, and our peer companies. Our efforts are
focused on economic development, promoting
responsible labor practices and education.
In 2002, to further our commitment, we cofounded the International Cocoa Initiative (ICI),
an independent foundation aimed at ending
abusive labor practices on cacao farms.
Engaging with cacao-farming communities
about child labor and hazardous work practices
to develop a change in attitude is a slow
process, especially in places where poverty is
prevalent. This dialogue is central to getting
cacao communities to commit to a long-lasting
change. By working community by community,
the ICI is raising awareness and seeing a
reduction of hazardous child labor in cacao
farming in Côte d’Ivoire and Ghana.
SUSTAINABILITY
compliance and
integrity
corporate
governance
By working together with our partners, we
are improving the quality of life for thousands
of children and adults in cacao-farming
communities in West Africa; providing greater
access to education; boosting farm family
incomes; encouraging responsible labor
practices; and helping at-risk and potentially
exploited children.
Palm oil and deforestation Palm oil is
used in a large variety of products worldwide,
and demand is growing. This is contributing
to deforestation in the tropics given current
general practices. Constructively addressing
the issue requires cooperation from producers
(including farmers, cooperatives and postharvest processors), the food industry,
governments and civil society.
For our part, we purchase only the fats derived
from palm oil. Our suppliers primarily source
from Indonesia and Malaysia, with smaller
quantities coming from Brazil, Colombia,
Mexico and West Africa. Our purchases amount
to less than 0.5 percent of worldwide production.
This section was last updated January 2010.
Index
a 15 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Agricultural
Commodities
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Following serious allegations concerning the
environmental practices of one of our palm
oil suppliers, we suspended direct purchases
from the supplier. This decision will stay in
effect until the supplier and any affiliates clearly
demonstrate they sustainably source palm oil
and comply with local laws.
We support the goals and efforts of the
Roundtable for Sustainable Palm Oil (RSPO),
and we buy from its members. However, we
believe more needs to be done to enforce
guidelines and address deforestation. The
RSPO needs to reach broad consensus on
its certification standards, in particular with
regard to climate change impacts of palm
oil production.
compliance and
integrity
corporate
governance
Animal welfare A growing concern,
especially in European Union (EU) countries
and the U.S., is animal welfare. In the EU and
the U.S., we require our facilities and those of
our direct suppliers that manage live animals
to meet industry standards and government
regulations on animal welfare. In Canada and
the U.S., we adhere to species-appropriate
standards developed by trade organizations for
beef, pork, chicken, eggs and turkeys. Suppliers
must demonstrate compliance through annual
audits conducted by a third party. In the EU,
our suppliers have to comply with established
animal welfare regulations as a condition of
exporting goods to EU countries.
We continue to discuss options with our
suppliers to purchase palm oil that meets
the standards and principles of responsible
production. We are also working with the World
Wildlife Fund to gain a better understanding
of the issue and our options. We will begin to
purchase certified palm oil through GreenPalm
certificates in 2010. As certification advances,
we will continue to review our purchasing
strategies.
SUSTAINABILITY
This section was last updated January 2010.
Index
a 16 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Packaging
Examples of our products
that have reduced packaging:
Kenco coffee refill pouch 97 percent
less packaging compared to the glass jar,
formerly the product’s sole container.
Oscar Mayer Deli Creations 30 percent
less paperboard; 1.2 million fewer pounds
(544 metric tons) of packaging.
Milka chocolate bars 60 percent less
packaging weight from fewer layers;
5.7 million fewer pounds (2,600 metric tons) in Europe and rolling out the
process in Latin America.
Kraft Mayo New shape reduced plastic
by 20 percent. And because the new
jar is stronger, less corrugated board is
necessary for transport.
Maxwell House, Yuban and Nabob coffees
Coffee cans went from steel to composite
paperboard that weighs 30 percent less,
uses 50 percent recycled content and is
expected to eliminate 8.5 million pounds
(3.9 million kilograms) of packaging.
SUSTAINABILITY
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
Packaging
Besides improving our designs, we’re also using
more sustainable materials. In North America,
Packaging is one of the first and last experiences the majority of people can recycle more than
consumers have with our products. Smarter
70 percent of our packaging (by weight). Most
packaging cuts waste, conserves natural
is made from renewable paper. We’re also
resources and gives users a more satisfying
printing some packaging using soy- and other
experience. Our decisions about sourcing,
vegetable-based inks.
design and end of life for our packaging have
a direct impact on how our consumers interact For consumers, governments and trading
with our packaging—from cart to can.
partners, having a universally accepted definition
Focus and collective effort across our global
business units allowed us to exceed our goal
of reducing packaging by 150 million pounds
(68,000 metric tons) two years ahead of our
commitment to do so by 2011 versus a base
year of 2005. By the end of 2009, we had
cut more than 174 million pounds (nearly
79,000 metric tons) of packaging from our
supply chain.
Key to our results is our Packaging Eco-Calculator™.
It’s a tool we provide our packaging developers
to help them create more efficient, sustainable
solutions, using data from the U.S. Environmental
Protection Agency, Department of Energy and
packaging industry groups. The Eco-Calculator
measures the percentage of postconsumer
recycled material, the amount of energy and
carbon dioxide emissions required to create the
package, and the efficient use of material and
void space in the package.
for sustainable packaging—along with metrics
to measure progress—is important. That’s why
we’re co-leading the Global Packaging Project
sponsored by the Consumer Goods Forum—with
the goal to define sustainable packaging and
align the industry on consistent metrics and
measures.
Global Packaging Reduction with Weight
Eliminated since 2005 (mm/lbs)
-174 mm/lbs
2005
2006
2007
2008
2009
This section was last updated January 2010.
Index
a 17 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Packaging
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Reusing and recycling Recyclable
packaging has little benefit if consumers don’t
recycle. We’re helping to increase recycling
rates around the world.
In 2008 and 2009, we partnered as the official
food sponsor with RecycleBank®, a company
that rewards consumers for recycling. At the
end of 2009, RecycleBank had saved more
than 420,000 metric tons (9.3 million pounds)
of material—the equivalent of 4.3 million trees
and 280,000 gallons (over 1 million liters) of oil
from which plastic is made. In addition to our
work with RecycleBank, we’re also collaborating
with industry packaging organizations in
Australia, Europe, Latin America and elsewhere
to boost recycling rates.
compliance and
integrity
corporate
governance
The system works through a series of collection
brigades. The brigades are typically run out of
community centers, schools and youth groups.
The collection teams are compensated by
Kraft Foods for each package they collect and
send in. The money the organization receives
is used to buy equipment and supplies for the
collecting organization or is donated to their
charity of choice. We’re the largest sponsor of
TerraCycle collection brigades around the U.S.,
with more than 39,000 Kraft Foods-sponsored
locations and 7 million people estimated to be
collecting waste.
Encouraged by that success, we’ve expanded
the program to include Brazil, Canada, Mexico
and the UK, making us the largest sponsor of
TerraCycle collection brigades in the world.
Turning trash into useful products
Globally, 12 Kraft Foods brands have
partnered with TerraCycle to help turn
nonrecyclable packaging into fun,
usable goods.
SUSTAINABILITY
Seventy percent of our North American
packaging is recyclable. For the remaining
30 percent that can’t be recycled, we’re working
to find alternatives to address the end of life
of the packaging. One alternative is to use
it a second time, or “upcycle.” In 2007, we
partnered with TerraCycle™, a company that
collects postconsumer packaging and turns the
waste into merchandise. So far, we’ve diverted
over 2,700 metric tons (6 million pounds) of
materials from landfills.
This section was last updated January 2010.
Index
a 18 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Energy
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Reducing energy to help combat
climate change
Kraft Foods faces an increasingly complex
landscape related to climate issues. As a food
company, we are concerned about potential
effects climate change may have.
Better World
Snapshot
Our manufacturing plants account
for 92 percent of our electrical
consumption. By reducing
electricity use, we save fossil fuel
burned to generate power and the
resulting greenhouse gases.
SUSTAINABILITY
So, we’re looking across our supply chain at
both direct and indirect impacts. For direct
impacts, we are focusing on our manufacturing
and transportation operations. For indirect
impacts, we are focusing on our agricultural
commodity purchases.
compliance and
integrity
corporate
governance
between 2005 and the end of 2009—substantial
progress toward our goal of achieving a
25 percent reduction by 2011. We did so by
implementing changes in our operations on
a global basis, physical changes through
investment, and behavior modifications of time
and effort. We are investing in new technologies
for lighting, heating, refrigeration, processing
and packaging, and it’s paying off.
We are also looking to reduce our consumption
of fossil fuels by tapping into alternate sources.
Sometimes we have a viable alternate energy
source right in our factories. At our plants in
Lowville and Campbell, New York, we identified
Our focused and pragmatic approach allows
a new fuel source and solved the perennial
us to concentrate on where we can be most
problem of how to dispose of the whey that is
effective. We actively participate in the Carbon
a by-product of our cheese making. By treating
Disclosure Project (CDP) and have done so
the whey in an anaerobic “digester,” we produce
since 2005. Since the beginning of our
enough methane to replace about 30 percent
participation, we have formally reported Scope 1 of the natural gas our plants use annually.
and Scope 2 emissions. In 2009, we started
(That’s enough bio-methane to heat 1,000
reporting on a portion of Scope 3. You can view homes in the Northeast.) Using the whey also
our carbon-emissions profile at the CDP website. eliminates the need to truck it for disposal,
saving diesel fuel and carbon dioxide emissions.
Our goal is to cut energy use in manufacturing An additional benefit of reclaiming the whey
plants by 25 percent by 2011. We’ve reduced it is cleaner wastewater. We’re exploring ways
by 15 percent by the end of 2009. And we’ve
to convert whey to energy across our dairyreduced energy-related emissions by 17 percent products network.
This section was last updated January 2010.
Index
a 19 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Energy
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
At other plants, we’re using coffee grounds
to generate energy. We’re also reclaiming heat
from ovens to heat water, experimenting with
wind turbines on factory roofs, and simply
remembering to turn out the lights. And we
have a goal to eliminate chlorofluorocarbons
in manufacturing by end-of-year 2010 and
hydrofluorocarbons by 2020.
We invest in energy savings in our office
buildings, too. Our corporate headquarters
campus in Northfield, Illinois, U.S., recently
earned the Energy Star rating from the
U.S. Environmental Protection Agency. It is
ranked in the top 8 percent among office
buildings in the U.S. and uses 33 percent less
energy than similar commercial buildings.
Known as the Lightcube, our building
in Zurich is one of our most energyefficient facilities.
SUSTAINABILITY
The Kraft Foods building in Zurich, Switzerland,
is known as the Lightcube, for its use of glass,
automated shades and its weather station.
This building uses 50 percent less energy for
lighting and 60 percent less for ventilation than
comparable facilities. Buildings in Australia,
Brazil and the Philippines also have strong
efficiency records.
compliance and
integrity
corporate
governance
Kraft Foods is one of the signatories to
The Copenhagen Communiqué on Climate
Change. The Communiqué aligns directly
with our view that the United Nations climate
framework agreement makes sense for
society generally and will ultimately benefit
our business.
Through measures large and small, we are
closing in on our goal of cutting a quarter of
our energy use.
Global Manufacturing Energy
Consumption (gj/ton) with % Change
since 2005
-15%
2005
2006
2007
2008
2009
This section was last updated January 2010.
Index
a 20 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Water
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Watching our water use
More people making more demands on the
planet’s water supply have made water a focus
around the world. We’re doing our part to treat
water as the limited resource it is.
We’ve reduced water consumption in our
manufacturing facilities by 32 percent since
2005, surpassing our goal of cutting 15 percent
by 2011. We met our goal by reusing water,
improving processes, maintaining equipment
and educating employees. And we’re not
stopping there—we’re continuing to identify
new opportunities for reducing our water use.
Our plant in Port Melbourne, Australia, where we
make our Vegemite spread, is a great example.
Over a four-year period, we consolidated
Vegemite manufacturing processes and made
innovative changes to our production processes,
resulting in a 58 percent reduction in water use.
We also reduced wastewater discharge by more
than 65 percent. (Energy consumption dropped
by 52 percent, too.) Wastewater streams from
the production of Vegemite spread are now
recovered, treated and used in local road
building, saving about 1 million liters
SUSTAINABILITY
compliance and
integrity
corporate
governance
(264,200 gallons) of potable water per month.
New initiatives at the plant aim to cut water
consumption by another 39 percent, diminish
wastewater by an additional 55 percent, and
reduce carbon dioxide emissions by 1,450 metric tons (3.2 million pounds).
At our Cieszyn, Poland, chocolate facility, we
reduced water use by 39 percent compared to
2005 through continuous improvement efforts.
And in Germany, we reduced water at our
Hemelingen coffee plant in 2009 by 19 percent
compared with the previous year through
improvements to the cleaning process.
Global Manufacturing Water
Consumption (m3/ton) with % Change
since 2005
-32%
2005
2006
2007
2008
2009
This section was last updated January 2010.
Index
a 21 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Waste
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
corporate
governance
Cutting waste
Philadelphia and Lehigh, Pennsylvania, as
well as our distribution center in Bethlehem,
We’ve reduced net waste from our manufacturing Pennsylvania. There, employees separate
plants by 30 percent from 2005 levels, exceeding recyclables, organics and waste. They strive to
our goal of a 15 percent reduction by 2011. Our recycle or reuse what would otherwise go to
strategy is simple: Generate less and find new
landfill; residual waste goes to an energy facility
uses for the waste that is produced. Solid waste where it is burned as fuel. We’re looking at
generated from manufacturing accounts for
ways to replicate these successes at our
more than 99 percent of total waste generated facilities worldwide.
by Kraft Foods. We currently recycle or reuse
about 90 percent of all our manufacturing waste.
In some cases, we’re using manufacturing
by-products as energy sources.
Global Manufacturing Waste
In 2007, we launched a pilot program with
Sonoco, a global packaging and recycling
company, to substantially reduce waste in our
plants. Our ultimate objective: To send zero
waste to landfills. Six of our North American
facilities have achieved this goal so far.
They include our plants in Mississauga and
Scarborough, Ontario, Canada; and several
in the United States—New Ulm, Minnesota;
SUSTAINABILITY
compliance and
integrity
Generation (kg/ton) with % Change
since 2005
-30%
2005
2006
2007
2008
2009
This section was last updated January 2010.
Index
a 22 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Transportation/
Distribution
Better World
Snapshot
As members of the U.S.
Environmental Protection
Agency’s SmartWaySM Transport
Partnership, we’ve reduced truck
idling, lowered our corporate
speed limit, equipped our trucks
with fuel-saving technology and
adopted other strategies that
enable our trucking operations
and those of our freight carriers
to use less fuel and emit fewer
greenhouse gases. In 2009, we
were one of just five consumer
products companies to earn the
SmartWay Excellence Award.
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
corporate
governance
Shipping and storing
product more efficiently
10,000 truck shipments and cut nearly
2,000 metric tons (4 million pounds) of
emissions by shipping wheat to our Toledo,
Improving our global transportation and
Ohio, flour mill by waterway rather than road.
distribution network so that we move products
In Brazil, in just six months of shipping by
and raw materials more efficiently saves truck
water we reduced 125 truck shipments—nearly
fuel, cuts carbon dioxide emissions and reduces 250,000 miles (390,000 kilometers) and
traffic. Since 2005, improved internal processes 300 metric tons (more than 600,000 pounds)
along with our collaborations with customers
of carbon dioxide emissions.
and suppliers have saved more than 50 million
road miles (80 million kilometers)—the
The right technology can make a difference,
equivalent of driving from Madrid to Beijing
too. Using the Oracle® Transportation Manage­
more than 8,500 times.
ment system to manage and optimize truck
movements and minimize “empty miles” in our
Sometimes the answer is right under our
U.S. operations saved us more than 500,000
feet. Like our underground refrigerated-storage miles (800,000 kilometers) in 2009.
facility built into the natural limestone caves
at Springfield, Missouri, U.S. Not only do
the naturally cool caves require 65 percent
less energy than conventional storage facilities,
their large size and central location enable
us to consolidate inventory and transport our
products to our customers more efficiently.
Better World
Annual savings: 180,000 gallons (680,000
Snapshot
liters) of fuel, 4 million pounds (1,800 metric Since 1993, we’ve shipped coffee beans to
tons) of carbon dioxide emissions, and more
our Berlin, Germany, roasting plant by rail rather
than 1 million miles (1.6 million kilometers) of
than truck. That’s reduced fuel consumption by
truck travel.
60 percent, eliminated 100,000 truck transports,
Another solution is to use other, more efficient
modes of transportation. In North America,
we’ve saved more than 1 million miles, replaced
SUSTAINABILITY
compliance and
integrity
cut 1.8 million miles (2.8 million kilometers) and
eliminated carbon dioxide emissions by two-thirds,
or 2,300 tons (2,000 metric tons)
This section was last updated January 2010.
Index
a 23 b
Kraft Foods Responsibility Report
SUSTAINABILITY
hunger and
affordable
nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Fighting hunger
and promoting
affordable
nutrition
Workplace
and culture
compliance and
integrity
corporate
governance
As a food company, we believe we can make
the greatest difference by sticking to our core
competency and focusing our giving and efforts
on food and nutrition. Our giving worldwide
primarily falls into one of three areas: fighting
hunger and malnutrition, promoting healthy
lifestyles and responding to disasters.
In order to maximize the impact of our
efforts around the world, we work collaboratively
with peer companies, governments and
nongovernmental organizations to help improve
the lives of those in need. As a member of the
global community, we’re committed to real,
measurable change.
Working to end hunger
and malnutrition
Our four-pronged approach
to addressing hunger and
improving nutrition
1.Providing direct aid
2.Developing/marketing affordable nutrition products
3.Supporting sustainable agriculture
4.Advocating effective policy
Hunger and Affordable Nutrition
Hunger is the world’s leading health threat.* One
in six people worldwide—more than 1 billion—
don’t have enough to eat. As one of the world’s
largest food companies, we’re in a unique
position to help.
*World Food Programme, http://www.wfp.org/hunger
This section was last updated MAY 2010.
Index
a 24 b
Kraft Foods Responsibility Report
SUSTAINABILITY
hunger and
affordable
nutrition
Better World
Snapshot
Whether it’s a hard-to-reach
rural area or an urban neighbor­
hood without a grocery store,
the Kraft Foods Mobile Pantry
program is making a difference
for families living in our country’s
food deserts. In 2009, our
company and Foundation pledged
$4.5 million over three years to
Feeding America, and the mobile
pantry program is bringing more
food—and better nutrition—to
children and families who need it
most. The fleet of up to 25 trucks
brings fresh produce, protein and
dairy products into communities
where access to food is challenging.
They’ll deliver up to 50 million
meals over three years.
www.feedingamerica.org
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
We’re fighting hunger and malnutrition
in 10 countries. We do so by offering aid,
developing products that make good nutrition
affordable, supporting sustainable agriculture,
and advocating for sound public policy. Kraft
Foods and the Kraft Foods Foundation team
with leading humanitarian organizations that
can best use what we bring to the table: food
and financial resources, expertise in food
technology and production, nutrition, and
an efficient global supply chain.
Providing Aid We have a long history of
providing aid to hunger-relief organizations
worldwide. Kraft Foods* has donated
nearly $1 billion in cash and food to select
organizations since 1990. And, in the U.S.
alone, between 1999 and 2009, we’ve
provided over 1 billion servings of food.
In the U.S., our partner is Feeding America.
We’ve helped Feeding America increase the
amount of fresh, nutritious food dispensed
by its 200 food banks nationwide. We’ve
supported nutrition classes for families in
need, donated millions of pounds of food, and
provided refrigerated food trucks. Most recently,
we* funded mobile pantries that help deliver
food to neighbor­hoods without easy access
to grocery stores.
compliance and
integrity
corporate
governance
Fresh food—notably fruits, vegetables, proteins
and dairy products—is the number one category
distributed by the nation’s food banks today,
thanks to leadership from Kraft Foods and its
Foundation. Fresh food had been absent from
the diets of the working poor, due to cost, despite
its help in overcoming disease complicated by
calorie-dense, nutrient-poor diets. Seeing an
opportunity, we* worked in partnership with
Feeding America to build the capacity of food
banks to ensure these communities would
receive more fresh, nutritious food. In addition,
our executive vice president of operations and
business services now serves as chairman of
Feeding America’s board to help set its strategy.
And, our employees provide supply chain
consulting in hopes of yielding substantial
productivity savings.
Outside of North America, our partners include
CARE, the Charities Aid Foundation, the
European Federation of Food Banks, INMED
Partnerships for Children, International
Federation of Red Cross, Save the Children
and the World Food Programme, among others.
*Some contributions were made by the Kraft Foods Foundation.
Hunger and Affordable Nutrition
This section was last updated MAY 2010.
Index
a 25 b
Kraft Foods Responsibility Report
SUSTAINABILITY
hunger and
affordable
nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
In 2009, the Foundation committed to provide
$3 million to Save the Children’s meal distribution
and nutrition education programs in Indonesia
and the Philippines.
In 2010, our Foundation began partnering with
INMED Partnerships for Children to launch a
school-based nutrition program for children in
Brazil. It will provide $2.25 million over three
years to help children ages 5 to 14 learn about
good nutrition, physical activity, basic hygiene
and sanitation. Children will also tend gardens
to grow fresh produce for their schools and
the surrounding community. Additionally, the
program will train school food workers in food
safety and nutritious cooking; teach mothers
of schoolchildren the basics of nutrition and
gardening; implement low-cost, low-tech water
purification; and screen and treat children for
intestinal parasites and anemia.
Biskuat biscuits are enriched with
nine vitamins and six minerals,
wheat and milk to give children
of Indonesia energy to win the
challenges of the day.
compliance and
integrity
corporate
governance
Making nutrition affordable Sometimes
solutions to hunger lie in innovative products.
In 2009, just over 14 percent of our revenue in
developing countries (excluding coffee sales)
came from fortified products sold at an
affordable price.
In Indonesia, for example, our Biskuat (“strong
biscuits” in Bahasa) brand of biscuits enables
parents to provide essential nutrients to their
children at an affordable price. Biskuat biscuits
are fortified with nine vitamins and six minerals,
and sell for about 4 cents (USD) for a full
serving of five biscuits—an affordable sum in
a place where most people live on less than
$4 per day. The biscuits are available at
roadside stands and easily fit in a typical pocket.
We sell a similar biscuit in Malaysia under the
Tiger brand and, in China, we sell our Jia Gai
biscuits. In Asia and Latin America, our Tang
orange-flavored drink is fortified based on
In 2009, 10 disaster zones received human­itarian regional needs. And Eden-brand cheese sold
aid, including the victims of Typhoon Ketsana in in the Philippines provides micronutrients
appropriate for residents there.
the Philippines, flooding in the U.S. states of
Georgia and North Dakota, wildfires in Australia
and Canada, and earthquakes in Costa Rica, Italy
and, in 2010, Haiti. The Foundation also supported
disaster relief efforts in Chile. In total, we* have
contributed nearly $12 million in cash and
products for global humanitarian aid since 2000.
*Some contributions were made by the Kraft Foods Foundation.
Hunger and Affordable Nutrition
This section was last updated MAY 2010.
Index
a 26 b
Kraft Foods Responsibility Report
SUSTAINABILITY
hunger and
affordable
nutrition
Better World
Snapshot
Acting locally as well as globally.
In addition to major global
initiatives, we’re also working to
make a difference neighborhoodby-neighborhood. During our
“Make a Delicious Difference
Week” in 2009, over 12,000 of
our employees in 33 countries
volunteered in their communities.
They helped feed families facing
hunger, promoted healthier
lifestyles and touched the lives of
about 600,000 people in need.
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Because consumers who don’t have a lot of
money need food that lasts, many of our products
in developing markets are nonperishable and
shelf-stable. One example is the Tang drink,
which has a shelf life of two years. We’re
exploring how we can give more of our products
longer shelf lives without relying on processing
and preservatives.
In addition to the nutritional products we
already market, we’re developing and sharing
technologies for new ones. Among them: tasty,
affordable, everyday foods that can reduce
the risk of parasitic infection, a risk faced by
upwards of 2 billion people worldwide. Through
a long-term partnership, we have developed
proprietary technology that is more effective
than current solutions. We hope it will be a
powerful new tool in the fight against hunger
and malnutrition.
Advocating for effective policy We
support public policy that ensures changes
intended to end hunger and malnutrition are
lasting and comprehensive. For example, we
advocate for consistent use of nutritional
panel information to better educate consumers.
We support basic nutrition education for “at
Hunger and Affordable Nutrition
compliance and
integrity
corporate
governance
risk” groups. And as a supporter of the Friends
of the World Food Program, we advocate for a
series of policy and funding changes intended
to build food-producing capacity in developing
nations.
In addition, we support an approach to biofuels
that values food and fuel equally. And we
encourage public investment in an agricultural
food supply chain that produces better yields,
less waste and more calories per hectare.
Connecting hunger and sustainable
agriculture According to the United
Nations, 70 percent of the world’s hungry
people are engaged in agriculture. Poverty,
government instability, lack of infrastructure
and natural disasters are underlying factors in
struggling agricultural economies. So it’s not
surprising that the countries with the most
success in reducing hunger are those who’ve
made the greatest investments in agriculture.
The link between hunger and agricultural
practices is just one reason why we are
increasing our support of sustainable
agriculture. Read more about our commitment
in the Sustainability section of this report.
This section was last updated MAY 2010.
Index
a 27 b
Kraft Foods Responsibility Report
SUSTAINABILITY
hunger and
affordable
nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
The project will research and identify local
nutritional needs and cultural preferences. It will
four founding partners in Project Laser Beam,
also consider such underlying causes of hunger
a five-year (2009–2014), multimillion dollar
and malnutrition as income distribution, access
project, which is intended to speed the eradi­
to markets, behavior and food accessibility.
cation of child hunger and malnutrition by
Once the research is complete, we’ll work with
addressing underlying social and economic
our partners and others to implement shortcauses. Project Laser Beam is a unique collabora­ term interventions and identify long-term
tive initiative with the World Food Programme,
sustainable solutions to the problems.
the Global Alliance for Improved Nutrition,
national and local governments, and industry.
The company and Foundation will contribute
cash to the project, as well as our employees’
expertise on affordable nutrition, sustainable
agriculture, manufacturing and distribution.
Applying laserlike focus to child
hunger and malnutrition We are one of
“As the numbers of the
hungry increase, we need
private companies like Kraft
Foods to join us in the fight
against hunger. It’s a fight
too big for any one player,
but together we can find new
ways to dramatically reduce
malnutrition.”
Josette Sheeran
Executive Director,
World Food Programme
Hunger and Affordable Nutrition
Project Laser Beam’s primary goal is to create
a sustainable, scalable and replicable model for
ending hunger and malnutrition. Beginning in
Bangladesh and Eastern Indonesia, the project
will address five root causes of hunger and
malnutrition among children by seeking to:
1. Increase micronutrient intake
2.Increase treatment of severe acute
malnutrition
3.Improve hygiene and parasite control
4.Strengthen household food security
5.Promote exclusive breastfeeding and
complementary feeding.
This section was last updated MAY 2010.
Index
a 28 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
HELPING PEOPLE
MAKE BETTER
CHOICES
Workplace
and culture
compliance and
integrity
corporate
governance
We’re here to help people achieve health and
well-being through everyday foods they love—
foods that taste delicious and support their
desire for healthy lifestyles.
We follow four simple principles:
1. Offer better-for-you options
2.Provide consumers clear nutrition
information to make better choices
3.Advertise responsibly to children
4.Promote physical activity and healthy
lifestyles.
Our approach is in line with our commitment to
the World Health Organization and our goal to
create foods that are wholesome and delicious.
We’re listening to consumers, and creating
better choices—for example, we reduced sugar
in Capri Sun by 25%, eliminating more than
120 billion calories from our portfolio.
Health AND WELL-BEING
In all of our health and wellness initiatives, our
advisory council of globally recognized experts
provides perspective on best practices and
emerging science to help guide our efforts.
This section was last updated MAY 2010.
Index
a 29 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
Making it better for you
Some better-for-you
choices available around
the world
100 Calorie Packs for
multiple products
U.S., Canada and Europe
Each serving comes in
easy-to-manage portions.
Jai Gai biscuits
China One serving provides
10 percent of daily calcium.
Express crackers
Argentina Popular product comes
in made-without-salt version.
Pacific whole-grain biscuits
China One serving provides
10 percent of daily dietary fiber.
PHILADELPHIA Cream for Cooking
Australia Dairy-based cooking
product has 60 percent less fat than
regular cooking cream.
As of 2007, we had eliminated or substantially
reduced trans fats across our entire product
People around the world are telling us they want line. In 2008, we signed onto the Pan American
to eat healthier. So we’re developing products
Health Organization’s Trans Fat Free Americas
that provide them with more choices. Whether
Agreement—a regionwide commitment among
it’s managing calories, limiting fats, increasing
stakeholders to reduce the amount of trans fat
the intake of key nutrients or adding more
in foods.
whole grains to their diets—we offer choices
to fit a person’s needs at various life stages.
We’ve also been reducing sodium for a number
Since 2005, we’ve reformulated or launched
more than 5,000 better-for-you products
around the world, roughly 30 percent of our
portfolio. We’re always working to make our
food more nutritious without compromising
deliciousness. Our nutrition standards help
guide our reformulation efforts. In some
products, we’ve increased nutrients like fiber
and calcium. In others, we’ve cut fat, sugar
and salt. In the U.S., we reduced the amount
of sugar in our Capri Sun beverages by
25 percent, eliminating more than 120 billion
calories. We’re using healthier oils, low-fat
dairy, whole grains, and fruits and vegetables.
of years and will continue those efforts. In
Europe, for example, we reduced sodium across
our Dairlylea brand by nearly 30 percent since
2002. And our popular Vegemite brand has
reduced sodium levels by 20 percent since
1977. Starting in 2010, we plan to reduce
sodium in our North American products—our
largest portfolio—by an average of 10 percent
over the next two years.
BelVita Breakfast biscuits
Europe Made with whole-grain
cereals, provides fiber and a selection
of vitamins and minerals.
Tiger Biskuat biscuits
Indonesia Biscuits enriched with
nine vitamins and six minerals.
Health AND WELL-BEING
This section was last updated MAY 2010.
Index
a 30 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Better World
Snapshot
We launched our “Health 4
Schools” nutrition and exercise
program for schoolchildren in
the UK in 2004. In 2009, our
Foundation expanded this
program to Russia by partnering
with CAF Russia and CAFAmerica.
By granting $1.3 million over three
years, we will reach more than
10,000 Russian families. The
Foundation is exploring similar
programs in Australia, China
and five countries in Europe.
Health AND WELL-BEING
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
We continue to invest in health and wellness
research and technology. Over the years, we
have expanded research efforts through
partnerships with leading institutions, including
Baylor University, University of Toronto, Tufts
University and Technical University of Munich.
In Europe, we participate in a number of
research framework programs sponsored by
the European Commission, like Diogenes,
EATWELL, EuroPrevall and HEALTHGRAIN.
To date, we have more than 100 patents
covering products and the technology to make
foods healthier. In 2009, we spent $477 million
on research and development, with a portion of
that spend going to health and wellness product
and technology development.
Promoting healthy lifestyles
Around the world, we support organizations
and initiatives that encourage food literacy and
physical activity. In the barrios of Caracas and
Barquisimeto, Venezuela, we work with the
nonprofit CEDEINTEGRAL to offer Kraft Foods
“academies,” where professional chefs teach
residents interested in restaurant work how to
prepare food safely and nutritiously. Students
leave the academies with skills enabling them
to open their own businesses or find work in the
restaurant industry. The academies have served
more than 150 people since 2008.
compliance and
integrity
corporate
governance
Since 2005, Kraft Foods and Boys and Girls
Clubs of Canada, through its Cool Moves
program, have helped thousands of children
and youth across Canada realize the benefits
of a nutritious diet and regular, healthy activity.
And in the U.S., we teamed with the National
Latino Children’s Institute to develop Salsa,
Sabor y Salud, the nation’s first healthy lifestyle
program designed specifically for Latino
families. In 2010, our Foundation renewed its
commitment to this program. Since 2002,
more than 100 community organizations have
offered the program, reaching nearly 32,000
people. Through a national partner, the program
is expanding to reach even more families. We
also support the Fuel Up to Play 60 initiative
that encourages kids to be more active and
make better food choices.
We are a founding member of the Healthy
Weight Commitment Foundation, a multiyear
effort to help reduce obesity—especially
childhood obesity—in the U.S. Launched in
2009, the focus is on helping people achieve
energy balance in three critical areas: marketplace,
workplace and schools.
This section was last updated MAY 2010.
Index
a 31 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
Providing clear nutrition information
We’re committed to front-of-pack labeling
that delivers meaningful information at a glance
To make informed decisions, people need the
and fits local needs. In Australia and Europe,
right information delivered clearly and simply.
our products include energy front-of-pack
With the exception of single-ingredient
information based on GDAs. In the U.S., we are
products like coffee, we provide nutrition
actively engaged in government and industry
labeling on all products in all markets
efforts to create standardized front-of-pack
worldwide—even where it’s not required.
labeling systems. Overall, we support efforts
among the industry to develop common
Following the recommendations of the Codex
nutrition criteria that will help consumers
Alimentarius, a set of globally recognized, widely make better choices.
used food standards, we provide information
on eight key nutrients—energy (calories), protein, We also provide nutrition information online
carbohydrates, sugars, fat, saturated fat, fiber
and via toll-free consumer call centers. Our
and sodium—where space permits. In Europe,
Healthy Living websites in several countries
for example, we’ve implemented Guideline Daily offer lifestyle tips and recipes. And in the U.S.,
Amounts (GDAs) nutrition labeling on our
our Good Eating, Good Living diabetes website
packages. This system shows how much of a
helps people who care about this condition.
particular nutrient is contained in a portion,
as well as how much of a person’s total daily
requirements it represents.
Health AND WELL-BEING
This section was last updated MAY 2010.
Index
a 32 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
Advertising responsibly to children
How we market our products is just as
important as the products themselves. In 2005,
we became the first company to announce
global principles for advertising to children:
• We don’t advertise to children under age 6
(a longstanding policy).
• For children 6 through 11, we advertise only
better-for-you products that meet stringent
nutritional criteria.
• We don’t advertise in primary or secondary
schools.
“Market
responsibly.”
Kraft Foods Code of Conduct, Rule 2
Health AND WELL-BEING
Our practices have been the model for several
voluntary advertising-to-children efforts. We
work with groups around the world to improve
advertising-to-children practices. As a founding
member of the International Food & Beverage
Alliance, we made a global commitment to the
World Health Organization to advertise only
products that meet specific nutrition criteria
to children under age 12. We’ve made similar
pledges in the U.S., Australia, Brazil, Canada,
Mexico, Russia, South Africa and Europe.
This section was last updated MAY 2010.
Index
a 33 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and quality
Setting new
standards
for safety
and quality
“Make food that is safe to eat.”
Kraft Foods Code of Conduct, Rule 1
FOOD SAFETY AND QUALITY
Workplace
and culture
compliance and
integrity
corporate
governance
Ensuring the safety and quality of our food
is our number one priority. It is at the core
of our heritage; and it is part of our culture.
Consumers have trusted our brands for more
than 100 years. Maintaining that trust starts with
quality foods that people can feel good about
serving to their families. And we need to make
sure we earn that trust each and every day.
Adhering to strict standards
We employ a comprehensive quality-chain
manage­ment system to ensure that our
food is safe and high-quality. It’s based on
ISO 9001:2000, an internationally recognized
family of strict quality management standards.
In addition, we supplement the ISO standards
with safety and quality standards developed
specifically for our business. We also work with
governments and industry partners around
the world, sharing learnings and best practices.
For example, in 2001, we announced a new
ingredient technology that helped inhibit the
growth of Listeria in processed meats. To
expedite industry knowledge and use of this
food safety innovation, we shared the ingredient
technology with the entire meat industry.
This section was last updated January 2010.
Index
a 34 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and quality
Workplace
and culture
Our quality management system ensures that
employees, suppliers and distributors around
the world know our standards and expectations—
and meet them. We’ve developed 72 employee
education programs covering everything from
sanitation to allergen control to packaging design.
Before we buy ingredients or raw materials from
any supplier, anywhere in the world, we conduct
an audit of their facilities to make sure they
meet our Supplier Quality Expectations (SQE).
Better World
Snapshot
Driven by our philosophy of
“continuous improvement,”
we regularly look at ways we can
improve our supply chain to
strengthen food safety. Recently,
we began screening for potential
chemical contaminants in raw
materials across the supply chain
worldwide. Ingredient samples
are tested on a scheduled basis
and analyzed by a Kraft Foodsapproved lab. Suppliers cannot
ship the ingredients to our
facilities until test results confirm
they meet our specifications
for safety.
FOOD SAFETY AND QUALITY
Suppliers are regularly audited thereafter—
every 18 months for suppliers handling cheeses,
ready-to-eat meats, fruit and vegetables, and
at least every three years for all suppliers.
Where suppliers handle food at high risk for
contamination, or where quality control is more
challenging, we conduct the audits ourselves. In
other cases, we work with third-party auditors.
Regardless of who performs the audit, it’s
critical that they be properly trained, managed
and adhere to common criteria. Suppliers that
fall short of our standards must take prompt,
verified corrective action. If they don’t, we stop
doing business with them.
compliance and
integrity
corporate
governance
is 100 percent perfect. That’s why we are driven
by a philosophy of continuous improvement.
Equally as important as audits are our tools
and programs for helping suppliers improve
their food safety and quality systems. We hold
“lessons-learned” sessions, offer food safety
and quality forums, and provide on-site quality
consultations.
In 2009, we hosted five Supplier Quality and
Food Safety forums covering Asia, Central
and Eastern Europe, European Union, Middle
East and Africa, and North America.
Taking action when needed
Despite our vigilance, threats to safety and
quality may arise. When something goes wrong,
we respond quickly and decisively. We’ve trained
our Special Situations Management teams—
senior-level managers from across the company
who are experienced in handling these types of
situations—to take immediate steps to protect
consumers when there is a food safety issue.
We have a real-time, automated early-alert
system and processes to fast-track information
to our internal quality and consumer managers
as well as our Special Situations Management
As a global leader on food safety, we have
well-defined safety and quality expectations for teams. We’ve also trained employees in our
our suppliers. We also recognize that no system manufacturing plants so they know exactly what
steps to take in a time of crisis.
This section was last updated January 2010.
Index
a 35 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Better World
Snapshot
We’ve helped build better
food-production infrastructure
in Kyrgyzstan and developed
products sold by an organization
in Benin. We’ve expanded the
offerings at a Vietnam cooking
school for low-income residents,
helped to improve and extend
safe distribution in Vanuatu, and
helped an Ecuadorian charity
raise money by selling artisan
chocolates. Since 2001, we’ve
sent more than 160 of our inhouse scientists, engineers and
other experts on 56 “missions”
with the United Nations Volunteer
Program. Our employees share
their expertise with nonprofits
and small businesses focused
on sustainable agriculture, food
production and community
development. The result? A
difference that’s both delicious
and lasting.
HEALTH AND
WELL-BEING
food SAFETY
and quality
Workplace
and culture
Alerting consumers to allergens
Many consumers have food allergies—some
of them quite serious. When managing food
allergens, we address concerns at critical points
throughout our production and our supply
chain. We account for all the possible sources
of major food allergens and clearly identify
them on our labels in common terms.
Responding to our consumers
It is important that consumers have multiple
ways to contact us about our products. That’s
why we have consumer contact points in all
countries where our products are sold, including
10 major global contact centers. Contact details
are on all websites through Frequently Asked
Questions (FAQs) and Contact Us functionality.
compliance and
integrity
corporate
governance
with us in these increasingly important contact
channels. We have nearly 90,000 fans of our
Facebook page, over 5,800 Twitter followers,
and more than 3 million views of videos on our
YouTube Kraft Foods channel.
Our consumer information analysts represent
the voice of the consumer to the organization.
In Europe, Latin America and North America,
they provide over 1,000 monthly and quarterly
analyses of consumer input to all brands and
across multiple functions (e.g., Marketing,
Quality, Research & Development). This
valuable information helps us better deliver
on consumer needs.
We continue to make ourselves more accessible
to consumers by increasing our presence in
the social media consumer space. In 2009,
Kraft Foods Facebook and Twitter accounts were
created to enable consumers to communicate
www.unv.org
FOOD SAFETY AND QUALITY
This section was last updated January 2010.
Index
a 36 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and quality
Workplace
and culture
Weighing the use of genetically
modified ingredients
We believe genetically modified ingredients
can play a role in food production.
We also know consumers worldwide have
different points of view about genetically
modified ingredients. That’s why when we
choose to use genetically modified ingredients
in our products, we consider a number of
factors, including:
• Fact-based scientific consensus
about safety
• Consumer acceptance
• Local regulatory approval for use
• Our own strict safety and quality criteria.
compliance and
integrity
corporate
governance
We are confident that genetically modified
ingredients are safe based on the conclusions
reached by a majority of scientists and
regulatory organizations, including the
Food and Agriculture Organization of the
United Nations, the U.S. National Academy of
Sciences and the World Health Organization.
Though scientists have reached consensus,
consumers have not. For example, in the U.S.,
most consumers are not concerned about
genetically modified foods. So we use them
in most of the products we make there. But
in Europe, most people don’t want genetically
modified ingredients, so we don’t use them
there. In countries where we don’t use
genetically modified ingredients, we require
that our suppliers provide documentation on
the origin and preservation of all ingredients.
We follow all local regulatory requirements
regarding the use and labeling of genetically
modified ingredients. We also support
appropriate regulation of genetically modified
foods and ingredients to ensure the safety and
integrity of the food supply and the protection
of the environment.
FOOD SAFETY AND QUALITY
This section was last updated January 2010.
Index
a 37 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
A Great Place
to Work
food SAFETY
and Quality
workplace
and culture
compliance and
integrity
corporate
governance
They make our products. Drive our trucks.
Manage our company. And much more. Around
the world, more than 100,000 Kraft Foods
employees determine our success every day.
Treating them well is, above all, the right thing
to do. It’s also key to our long-term industry
leadership. Providing a workplace that is safe,
inclusive and rewarding is a proven strategy
for keeping good people and inspiring them
to do great things. And that’s the best way we
know to grow a great company.
Keeping workers safe
“Treat people fairly.”
Kraft Foods Code of Conduct, Rule 3
WORKPLACE and Culture
Safety is a top priority. We strive for zero accidents
in the workplace by addressing all causes of
injuries. We’ve made progress. We have reduced
our lost-time accident rate by 27 percent since
2005. We also expect employees to follow all
safety laws and guidelines (including reporting
injuries), operate equipment properly, and never
use alcohol or illegal drugs in the workplace.
In 2009, 27 plants worldwide completed a full
year of operation without a lost-time accident.
These facilities were presented with a plaque
for helping us fulfill our vision of being a “Safety
Perfect” organization. Facility managers made
the presentations at plantwide celebrations,
where all employees were recognized for
this achievement.
This section was last updated January 2010.
Index
a 38 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
workplace
and culture
Our Safety Policy sums up our position:
• Safety and health improvement are both
an individual and team responsibility.
• Each of us must be dedicated to conducting
all activities with the highest concern for
employee safety and health.
• Each of us should participate in a local
safety program and actively seek to achieve
an accident/injury-free work environment.
compliance and
integrity
corporate
governance
We regret to report that we lost four employees
to fatal accidents in 2009. Two Kraft Foods
sales representatives died in a commercial
airline crash near Buffalo, New York, U.S.; a
truck driver lost control of his vehicle while
on the road in South Carolina, U.S.; and a
manufacturing employee in Poland died
from injuries after falling from a ladder. We
thoroughly investigate all on-the-job accidents
to find the cause and to see if we need to
revise our safety procedures.
Accordingly, we’re committed to:
• Meeting or exceeding all applicable safety
and health regulations
Lost-Time Accident Reduction
since 2005.*
• Continuously improving the safety of
our work environment by investing in our
people and our facilities
• Creating and maintaining a world-class
safety culture to achieve an accident-free
work environment.
WORKPLACE and Culture
0.86
2005
2006
2007
2008
-27%
2009
*This chart shows the number of Lost Time Accidents per
100 full-time equivalent Kraft Foods employees per year.
This section was last updated January 2010.
Index
a 39 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
Better World
Snapshot
We’re working across our
company globally to hire,
develop and retain more women
who earn the same as their male
peers. Currently, 43 percent of
our salaried employees are
women, and women make up
more than 35 percent of our
management team.
WORKPLACE and Culture
HEALTH AND
WELL-BEING
food SAFETY
and Quality
workplace
and culture
compliance and
integrity
corporate
governance
Treating people with respect
Building great talent
We’re building an increasingly diverse workforce.
We won’t permit discrimination or harassment
based on age, race, disability, national origin,
religion, sex, sexual orientation or any other
legally protected status. Being inclusive is
critical to our success. It enables us to be the
employer of choice for talented people. By
mirroring consumers worldwide, we do a better
job of meeting their needs.
Like building great brands, building the skills
and talent of our people is a top priority at
Kraft Foods. Our performance management
process creates a clear connection between
employees’ development, our business
strategies and individual performance required
for the company’s success. It is funda­mental
to becoming a high-performing organization.
For 100 percent of employees, Kraft Foods
identifies skill gaps and manages the
development of its employees’ capabilities
through a formalized performance management
process entitled Managing and Appraising
Performance, or MAP.
Our Global Diversity and Inclusion Strategies
provide direction to our employees worldwide,
while helping each region make diversity
relevant to its own priorities and opportunities.
For example, hourly employees represent about
61 percent of our workforce and salaried
employees account for 39 percent.
Companywide, we require diversity and inclusion
training for every employee at key stages in
their careers. Eleven diversity-focused employee
councils around the world help us promote
diversity and drive business objectives. The
relationships we build through community
involvement connect us with a broad range of
consumers and attract diverse talent. In 2009,
we linked the representation goals of each
business unit to executive compensation to
make our leaders accountable for diversity
outcomes.
This section was last updated January 2010.
Index
a 40 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
workplace
and culture
Kraft Foods’ rigorous and consistent approach
to all elements of performance management—
goal setting, ongoing informal and formal
performance feedback, development and
assessment—provides a strong framework for
managers and employees as they translate
company strategies into the work they do
every day.
compliance and
integrity
corporate
governance
Through an annual global succession planning
process, we focus on differentiation, development,
diversity and depth. Our succession plan drives
consistency in the application and assessment
of employee development practices and
ensures that leaders accurately differentiate
talent in order to drive key development actions.
We are committed to providing a
performance management process that:
• Sets clear expectations
• Expects full accountability
• Engages employees and managers
in continuous feedback, both informal
and formal
• Fosters meaningful development.
We’re clear about what our employees need
to do to succeed—and we help them do it.
Our Leadership Competency Model, along
with our values and leadership behaviors,
provides the organization with a common
language that describes expectations of all
employees regardless of level, location, function
or business. We also provide employees with a
web-based toolkit (translated into 28 languages)
that helps them develop each competency.
WORKPLACE and Culture
This section was last updated January 2010.
Index
a 41 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
SUSTAINING A
LEGACY OF TRUST
Workplace
and culture
compliance and
integrity
corporate
governance
We take the public’s trust seriously. The
good faith of consumers, partners, regulators,
shareholders and suppliers is something we
renew daily, by doing what we say we’ll do.
Our Code of Conduct
In 2009, we updated our Code of Conduct,
the cornerstone of our commitment to doing
business with integrity. We revised the Code to
be concise, clear and unequivocal, and made it
available in 33 languages. By stating 10 simple
and wide-ranging rules, the Code links our
business performance with our core values and
draws strict ethical boundaries. It makes plain,
for everyone who works at Kraft Foods, what we
believe is the right and fair way to do business.
Every day.
Kraft Foods Code of Conduct, Introduction
Revising our Code of Conduct reflects our
belief that ensuring compliance and integrity
is a never-ending process. We’re continually
making sure our standards are high, expectations
are clear, and that we have the tools and
processes in place for meeting them. We
regularly perform assessments of key legal and
compliance risks across our entire company.
COMPLIANCE AND INTEGRITY
This section was last updated January 2010.
“One thing is certain—when gaining a business
advantage means violating the rules or ignoring
our Values, we don’t do it.”
Index
a 42 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
Helping employees do the
right thing
Our chief compliance officer and five regional
compliance officers—with support from other
members of the Compliance & Integrity and
Legal groups—help employees understand
our ethical standards. Training—in-person and
online—educates workers worldwide about our
ethics and compliance practices.
In 2010, we’re asking exempt employees at
all levels to take our Code of Conduct online
training and complete an acknowledgment
form. This is double the number from our
previous campaign in 2008.
If our Code of Conduct
doesn’t cover a specific
situation, our employees
draw on our Values to
guide them:
We
We
We
We
We
We
We
inspire trust.
act like owners.
keep it simple.
are open and inclusive.
tell it like it is.
lead from the head and the heart.
discuss. We decide. We deliver.
COMPLIANCE AND INTEGRITY
In addition, we offer in-depth courses to
employees based on their responsibilities.
Topics include food safety, antitrust issues,
antibribery issues and responsible marketing.
To support ongoing improvement, we
continuously measure and evaluate the
effectiveness of our ethics programs.
In 2009, we launched a new Ethics in Action
program to recognize employees who act with
ethical courage and lead with integrity. One
award went to an accounts payable manager
in Shanghai, China. When faced with what he
compliance and
integrity
corporate
governance
suspected to be fictitious invoices, improper
payments and fake premiums, he stood up for
what was right and protected our company. The
second award recipient was a quality supervisor
in our Champaign, Illinois, U.S., plant, who
consistently demonstrated ethical courage when
faced with a number of difficult challenges. He
is a role model among his coworkers.
Ensuring people feel safe
to speak up
Under our Speaking Up policy, we expect
employees to ask questions and raise concerns
about business practices when they see
something they think might be wrong. There
may be times when employees are not
comfortable speaking with their supervisors,
compliance officers or human resources
contacts, or simply wish to remain anonymous.
Consistent with applicable local law, we have
established a toll-free telephone HelpLine
operated by an independent company, as well
as a corresponding WebLine, so that our
employees can confidentially and, if they wish,
anonymously report instances of suspected
wrongdoing or ask questions about compliance
matters. The HelpLine and WebLine are
available globally and allow employees to
discuss their concerns in their own languages.
This section was last updated January 2010.
Index
a 43 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
compliance and
integrity
corporate
governance
Anyone outside of our company who suspects
wrongdoing by Kraft Foods employees or
involving Kraft Foods business can contact
the HelpLine, WebLine or our Compliance &
Integrity group at Kraft-Compliance@kraft.com.
Holding suppliers to high standards
We select suppliers and consultants around
the world based, in part, on whether their
ethical standards align with ours. Most major
companies have supplier requirements
regarding corporate responsibility. Yet most
companies are both suppliers and customers,
leading to a proliferation of codes of conduct
and assessment requests.
We helped create a far simpler and better
approach. Kraft Foods is a founding member
of the Program for Responsible Sourcing
(PROGRESS) sponsored by AIM in Europe
and the Grocery Manufacturers Association
in the United States (AIM-PROGRESS). This
industry initiative allows a supplier to provide
common information so each customer can
independently make business decisions in
accordance with its own corporate responsibility
standards. We are currently rolling out
PROGRESS to our suppliers and business
partners. This is an ambitious global effort
that will take several years to complete.
compliance and integrity
This section was last updated January 2010.
Index
a 44 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Ensuring
Accountability
Workplace
and culture
compliance and
integrity
corporate
governance
We’re a publicly held company. We strive to be
open and accountable to all of our stakeholders
everywhere. So we’ve put structures and
processes in place to ensure the ethical and
efficient governance of our company.
About our Board A 12-member Board of
Directors governs our company in a manner
consistent with Kraft Foods Corporate
Governance Guidelines. Eleven of our
12 directors are independent under the
New York Stock Exchange listing standards.
The Board of Directors has five standing
committees
1. Audit
2. Finance
3. Human Resources and Compensation
4. Nominating and Governance
5. Public Affairs
CORPORATE GOVERNANCE
In 2007, the Board determined that the chief
executive officer would be the only employee
director, and all Board committees will consist
entirely of independent directors. They also
established the lead director position —an
independent director who serves as the liaison
between the chief executive officer and other
directors—to increase the Board’s effectiveness,
promote open communication among
independent directors, provide independent
Board leadership on behalf of shareholders, and
chair meetings of the independent directors.
This section was last updated January 2010.
Index
a 45 b
Kraft Foods Responsibility Report
SUSTAINABILITY
Hunger and
Affordable
Nutrition
HEALTH AND
WELL-BEING
food SAFETY
and Quality
Workplace
and culture
While the Board does not have a written policy
regarding diversity when identifying nominees
for directors, it endeavors to assemble a Board
composed of individuals with diverse views,
backgrounds and professional experience. For
example, of the 12-member Board, 30 percent
are women, one of whom is a person of color.
The representation of women on our Board
exceeds the Fortune 500 average of 15.2 percent,
which was reported in 2009 by Catalyst.
All non-employee Board members are expected
to adhere to our Code of Business Conduct and
Ethics for Non-Employee Directors. This Code
addresses such issues as legal and regulatory
compliance and conflicts of interest.
Executive compensation Given the
increased focus on this topic in recent years,
in 2009 and early 2010, the Board’s Human
Resources and Compensation Committee
conducted a thorough analysis of compensation
practices and made several adjustments to
Kraft Foods executive compensation programs.
Beginning in 2010, the mix of grants to senior
management, including the named executive
officers, will be as follows: 50 percent
performance shares, 25 percent stock options,
and 25 percent restricted stock. This mix will
place more of an emphasis on performancebased compensation—performance shares and
stock options.
CORPORATE GOVERNANCE
compliance and
integrity
corporate
governance
SPEAKING UP Kraft Foods monitors public
policy and participates in the public discussion
on issues affecting our company. Some
examples of issues include food safety and
security, nutrition, biotechnology, environmental
responsibility, food labeling, marketing and
packaging. And, when we engage with
governments, we follow the rules and do it with
transparency. For example, we voluntarily publish
a list of all Kraft Foods’ U.S. political contributions
on our Corporate Governance website.
How to Report Financial Wrongdoing We encourage those outside our company
and our employees to report concerns about
our fiscal controls, auditing matters or anything
else that appears to involve malfeasance of
any kind. Please report such concerns to
Kraft-FinancialIntegrity@kraft.com.
This section was last updated January 2010.
Index
a 46 b
Kraft Foods Responsibility Report
Independent Assurance Statement by ERM
Kraft Foods, Working to Build a Better World, Responsibility Report
Environmental Resources Management (ERM) was retained by Kraft Foods to provide an independent review and
assurance statement for Kraft Foods’ 2009 Responsibility Report.
Scope of Work
Environmental
Resources
Management
One Continental Towers
1701 Golf Road, Suite 1000
Rolling Meadows, IL 60008
(847) 258 8900
http://www.erm.com
The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide moderate
level, Type 2 assurance, covering: evaluation of adherence to the AA1000AS (2008) principles of inclusivity, materiality
and responsiveness (the Principles), and the reliability of specified sustainability performance information.
Assurance Work Performed
We tested the effectiveness of processes used to adhere to the AA1000AS Principles through interviews with selected
senior management at executive and functional levels and of relevant management responsible for day-to-day
management of sustainability.
ERM interviewed key individuals who were responsible for the development and implementation of Kraft Foods’
response to the following topics:
Sustainability
Hunger and Affordable Nutrition
Health and Well Being
Food Safety and Quality
Work Place and Culture
Compliance and Integrity
Corporate Governance
In addition, ERM reviewed the corporate environmental performance indicator (EPI) datasets, visited a sample of
seven sites, and interviewed people at eight additional sites to review site data capture and reporting. The assurance
sites were selected from each business region to provide a representative sample of the significant contributors to the
six key EPIs and to include sites that were assessed to have the most significant year-on-year changes. The processes
were tested at site level by tracking samples of data from input and calculation to consolidation, internal checking,
and reporting.
EPI data was reviewed for the calendar year 2009 from manufacturing plants only and for the following six EPIs: water
consumption, water discharged, energy used in stationary sources, carbon dioxide emitted from stationary sources,
solid waste generated and waste recycling rates.
Assurance Statement
Index
Kraft Foods Responsibility Report
a 47 b
Responsibility and Methodology
ERM’s responsibility was to express our assurance conclusions within the agreed scope. We delivered our work in
accordance with ERM’s assurance methodology, which is based on AA1000AS, the Global Reporting Initiative (GRI)
Sustainability Reporting Standards and the International Standard on Assurance Engagements (ISAE) 3000. We
planned and performed our work to obtain all the information and explanations that we believe were necessary to
provide a basis for our assurance conclusions as to whether the reported information and data set out in our scope
of work was appropriately reported (moderate assurance).
The accuracy and completeness of this information is subject to inherent limitations given their nature and methods
for determining, calculating and estimating such data.
ERM Conclusions
On the basis of the moderate level of assurance work undertaken, we conclude that nothing came to our attention to
suggest that the Report does not properly describe Kraft Foods’ adherence to the AA1000AS Principles or its
performance.
In terms of data accuracy, nothing has come to our attention to suggest that data has not been properly collated from
information reported from manufacturing plants. We are not aware of any errors that would materially affect the
data reported.
Observations
Without affecting our assurance opinion, we also provide the following observation:
Kraft Foods has made good progress in integrating sustainability issues into their business processes and adopting a
life-cycle approach to sustainability issues. This life-cycle approach is being applied to focus future efforts to reduce
impacts associated with their products.
ERM Competence and Independence
ERM operates strict conflict of interest checks for the team members working on the matter and has confirmed our
member’s independence to work on this engagement with Kraft Foods. The members of the assurance team have
not provided consulting services to Kraft Foods outside the review of EPI data and the Responsibility Report. The
assurance team has the required combination of education, experience, training, and skills for this engagement.
Environmental Resources Management
Rolling Meadows, Illinois, USA
June 2010
Assurance Statement
Index
Help improve our reporting
We’re excited to share this report with you. Now
we’d like to hear from you. Tell us what you liked,
what you didn’t, and what else you’d like to see.
Please take this brief survey—it takes just a few
minutes, and your contribution will help us improve
our performance and how we report it.
www.kraftfoodscompany.com/responsibility