Master 2 – International Management – Exchanges with Asia
Corporate Social Responsibility of
Kraft Food Group, Inc.
“Make today delicious”
Mr. AMINATA
Tachrifa MAOULIDA – Herenui MARETTO – Khadija TAHIRI
2014-2015
Contents
Abstract ................................................................................................................................................ 3
I. Introduction: what is Corporate Social Responsibility (CSR)? ................................................... 4
a. Brief history of CSR ................................................................................................................ 4
b. Definitions of CSR .................................................................................................................. 4
II. An overview of Kraft Foods Group, Inc. ..................................................................................... 6
a. Company presentation ............................................................................................................. 6
b. Harmful impacts caused by Kraft Foods’ activities ................................................................ 7
III.
Kraft Foods’ current CSR engagements .................................................................................. 9
IV.
Potential CSR engagement for Kraft Foods .......................................................................... 10
V. Conclusion ................................................................................................................................. 11
References.......................................................................................................................................... 12
2 Abstract
CSR is the process of assessing an organization’s impact on society and evaluating their
responsibilities. Kraft Foods Group, Inc. is a grocery manufacturing and processing
conglomerate and is one of the largest consumer packaged food and beverage companies in
North America.
Kraft Foods respects some corporate social responsibility engagements, which allow the
company to have a competitive advantage. These engagements also enable the company to
contribute to the development of smaller communities and to the protection of the
environment. Despite the genetically modified organism problems, the company tries to
develop their products and make them safer and healthier. In fact, they want to invest in a
sustainable and green economy.
The project we would like to present is a scholarship that would be given to young
Indonesians who don’t have access to tertiary education. The principal goal of this project is
to give a chance to these students to build their future and promote their culinary culture.
3 I.
Introduction: what is Corporate Social Responsibility (CSR)?
a. Brief history of CSR
The CSR concept appears during the 1960s in the literature on business but does not take off
until 1990:
1976: OECD Guidelines for Multinational
1977: ILO Tripartite Declaration on Multinational Enterprises and Social Policy
1997: Global Reporting Initiative initiated by UNEP and Ceres (CERES)
2000: Global Compact / Global Compact launched by the UN (DH, labor standards, the
environment, the fight against corruption)
2001: Green Paper of the European Commission
2001: France: the obligation to non-financial reporting for listed companies in France
2007-2010: France: Environment Grenelle Process
2010: International standard ISO 26000 Social Responsibility of Organizations
2010: France: National Biodiversity Strategy
2011: European Commission communication of 25 October 2011 "Corporate Social
Responsibility: a new EU strategy for 2011-2014"
2013: France: national platform for CSR to the Prime Minister
b. Definitions of CSR
Definition of CSR by the European Commission (2011)
CSR is the process of assessing an organization’s impact on society and evaluating their
responsibilities. CSR begins with an assessment of a business and their:
!
!
!
!
!
Customers
Suppliers
Environment
Communities
Employees
Corporate social responsibility (CSR) refers to companies taking responsibility for their
impact on society. As evidence suggests, CSR is increasingly important to the
competitiveness of enterprises. It can bring benefits in terms of risk management, cost savings,
access to capital, customer relationships, human resource management, and innovation
capacity.
Definition of social responsibility of organizations with ISO 26000 (2010) standard
Responsibility of an organization vis-à-vis the impact of its decisions and activities on society
and the environment, through transparent and ethical behavior that:
! Contributes to sustainable development, including health and well being of society
! Take into account the expectations of stakeholders
! Comply with the laws in force and is consistent with international standards
! Is integrated throughout the organization and implemented in its relations
4 ! "To set the scope of its social responsibility, identifying relevant policy areas and set
priorities, it is that the organization treats [all]" core following questions ":
! The governance of the organization
! Human Rights
! Relations and Working Conditions
! Environment
! Fair practices
! The consumer issues
! Communities and local development. "
Why do we need CSR?
Consumers increasingly don't accept unethical business practices or organizations that act
irresponsibly. Advances in social media (giving everyone a voice) mean that negative or
destructive practices quickly fuel conversations online. Organizations are accountable for
their actions like never before.
The Business Benefits of CSR
CSR should not be viewed as a drain on resources, because carefully implemented CSR
policies can help your organization:
! Win new business
! Increase customer retention
! Develop and enhance relationships with customers, suppliers and networks
! Attract, retain and maintain a happy workforce and be an Employer of Choice
! Save money on energy and operating costs and manage risk
! Differentiate yourself from your competitors
! Generate innovation and learning and enhance your influence
! Improve your business reputation and standing
! Provide access to investment and funding opportunities
! Generate positive publicity and media opportunities due to media interest in ethical
business activities
More than Compliance
A successful CSR initiative takes organizations beyond compliance with legislation and leads
them to honor ethical values and respect people, communities and the natural environment.
CSR is sustainable - involving activities that your organization can maintain without
adversely affecting your business goals.
More than Being Green
CSR is about more than environmental responsibility or having a recycling policy. CSR is
about considering the whole picture, from your internal processes to your clients, taking in
every step that your business takes during day-to-day operations.
So CSR is a long-term approach to business that addresses the needs of communities, people
and their employers. CSR provides frameworks for successful enterprise that is harmonious
with its surroundings. CSR is an opportunity to generate honest, authentic good-news stories
that a business and its community can be proud of.
CSR must be sustainable - remaining a fundamental part of your business regardless of
changing fortunes.
5 II.
An overview of Kraft Foods Group, Inc.
a. Company presentation
Kraft Foods Group, Inc. is a North American grocery manufacturing and processing
conglomerate that is headquartered in the Chicago suburb of Northfield, Illinois. It was
founded in 1903 and was at first a wholesale door-to-door cheese business in Chicago. In
2012, the company split itself in two different entities, one being Kraft Food Group, Inc. and
the other being Mondelēz International, Inc.: the first one focusing on the North American
grocery business and the second being the bigger companies owning brands such as Oreo, LU,
Cadbury etc. Kraft Food Group, Inc. now serves a wide range of food products – from cheese
to juice – in more than 170 countries.
Today, Kraft Food is one of the largest consumer packaged food and beverage companies in
North America – with annual revenues of more than $18 billion. Its two principal markets are
the United States and Canada, with respectively 98% and 99% household penetration. The
company has more than 23000 employees working in 39 manufacturing facilities, and 3
research
and
development
centers.
Kraft Foods produces more than 30 different brands, including 10 brands that have more than
$500 million in sales. The most popular and successful brands owned and produced by Kraft
food being:
Philadelphia has been
founded on a belief
that truly delicious
cream cheese begins
with
a
story
of
freshness.
Revenues: $500+ million
Planters offer an array
of products to meet a
variety of different
tastes, occasions and
nutrition needs.
Revenues: $500+ million
Jell-O has delivered
delicious creations to
people
through
multiple offerings of
gelatin, pudding and
no-bake desserts.
Revenues: $500+ million
A
Kraft
Foods
salesman decided to
pair
grated-cheese
envelopes
together
with
packages
of
quick-cooking
macaroni .
Revenues: $500+ million
Known for its iconic
pouch, Capri
Sun offers a refreshing
line of juice drinks
made with no artificial
preservatives, colors or
flavors.
Oscar Mayer,
the
maker of hot dogs,
lunch meats and bacon,
is one of our billiondollar brands.
Revenues: $500+ million
Revenues: $1+ billion
6 Kraft Foods corporate mission statement:
"Our aim is to be North America's best food and beverage company, and we'll get there by
continuing to offer products consumers love, creating a performance-based culture that
motivates and excites employees and becoming the best investment in the industry."
b. Harmful impacts caused by Kraft Foods’ activities
Trust is really important to Kraft Foods Group, that’s why they work so hard to make quality
products that delight their consumers. They are also open to any critics or suggestions in order
to create great-tasting foods, but are they really interested in the composition of their products?
As a large manufacturer, Kraft affects the environment in many ways.
Kraft Foods has several harmful activities. Among those activities, Kraft uses genetically
modified organisms (GMO) in products such as Kraft Mac & Cheese, which is made with
genetically modified wheat. This may cause adverse effects on activity and attention in
children. So the GMO may engender allergy, produce toxic substance or may lead to a nonfunctioning of antibiotics in the body, which become weak in order to face up sickness.
Accordingly different countries such as UK and European countries where Kraft products are
imported, requires a warning label if products contain artificial food dyes or GMO.
7 There are also other Kraft products, which contain genetically engineered corn and soy (e.g.
Boca Burgers, Post Blueberry Morning Cereal, Stove Top Stuffing…).
Even though Kraft Foods would like to provide safe products to consumers, their products
still include some harmful ingredients, such as GMO, which are not allowed in some
countries as it is considered as dangerous ingredients. In more than 60 countries around the
world, including Australia, Japan, and all of the countries in the European Union, there are
significant restrictions or outright bans on the production and sale of GMO.
Kraft shows their consumers that the genetically modified (GM) products are safer for people
and for the planet. Moreover Kraft insists that according to some researches GMO has
important health benefits. These researches were made by organization such as: U.S Food &
Drug Administration, the World Health organization, Health Canada, the U.S. Department of
Agriculture and the National Academy of Sciences.
Despite all those arguments, Kraft has adapted their products according the country that is
importing Kraft Foods products. For example, Kraft has to remove GMO for some products,
which are exported in countries that don’t allow this ingredient.
Moreover, Kraft environment impact is also related to the use of solvent and chemicals for
printing boxes, which can pollute the air through evaporation and generate some dangerous
waste.
8 III.
Kraft Foods’ current CSR engagements
! Making a Difference in Our Communities
They are helping to fight hunger and promote healthy lifestyles.
At Kraft, we’re helping to fight hunger and promote healthy lifestyles. According to the
USDA, nearly one in six people in the U.S. are food insecure, and nearly one in five children.
As one of the largest consumer packaged food and beverage companies in North America, we
offer our food and nutrition expertise to create a winning recipe to help address these issues:
• Community Partnerships: Fighting Hunger & Encouraging Healthy Lifestyles
• Lending a Hand When Disaster Strikes: Humanitarian Aid
• Promoting Volunteer Service to Drive Change
! Making a Sustainable Difference
Kraft food is working to protect their greatest resources land, air, water and people.
Kraft is doing its part by focusing on those areas where we can have the greatest impact and
that mean the most to their business performance.
• Agricultural Supply Chain
Their business depends on a quality supply of farm products, today and in the future. That’s
why we support sustainable farming projects. It’s good for our business, helps the
environment and can improve the lives of local farmers.
• Environmental Policy
We only have one planet. So all of us need to work together and find ways to use less energy,
water and other resources and reduce the waste we generate. We’re working on our part.
• Climate Change
When it comes to climate change, there is no shortage of ideas on how to tackle the issue. We
have a point of view and we want to make a difference.
! Nutrition & Well-Being
They are supporting programs and partnerships that help educate and motivate people to make
healthful choices
• Making the Foods People Love Even Better
• Bringing Nutrition Resources and Education to Consumers
• Helping People Make Better Choices
9 IV.
Potential CSR engagement for Kraft Foods
Context:
The amount of young people enrolled in secondary education is about 75%, which shows that
a lot of students drop out of school after finishing their primary education (about 99%
students enrolled in primary education in 2011). We also noticed that only 25% (in 2011)
students continued their studies in tertiary education that is due to the fact that university
access is really expensive and not every student is able to attend university.
Indonesia is a country with very diverse cultures and some cultures stay isolated on some
islands.
Objectives:
-­‐ Give opportunities to young Indonesians, who don’t have access to tertiary education
and would like to share their culinary culture, to continue their studies in university
and make them more independent.
-­‐ Develop tourism and employment rate in remote islands of Indonesia thanks to these
students building new restaurants after completing their studies.
-­‐ Implement affordable Kraft products in all Indonesia to give people access to cheap
and healthy products.
-­‐ Improve Kraft Foods brand image.
Approach:
The winners will be given a scholarship to attend cooking class at a university level, learning
how to cook their daily meals in a healthy way. The students will also attend business classes
at a university level in order to be able to create their own restaurant.
Young students willing to receive the scholarship will have to submit a business project
related to catering and culture sharing though food.
Create partnership with universities that have cooking and business classes. Put Kraft
products in these universities.
Organize cooking contests every year among the university students to promote the student
skills and own food culture and create new potential products for Kraft that will be adapted to
Indonesian taste. This will also promote Kraft and the universities. Invite important people
working in the restaurant or hotel industries in order to show them the concept and make them
initiate their own program where they would employ interns. The contests will only use local
products and at least one Kraft product.
Contribution to the company performances
-­‐
-­‐
-­‐
Social and environmental benefits
-­‐
A better brand image
A better market coverage in Indonesia
A better accessibility to Kraft products in
Indonesia
-­‐
-­‐
-­‐
-­‐
-­‐
10 Increase the number of students going into
tertiary education
Enable young people to become more
independent and open their businesses
Increase tourism thanks to those new
businesses
Expand food culture from remote islands
Help local farmers by buying their crops
Promote health in Indonesia
V.
Conclusion
As a multinational company, Kraft Foods shows that you can be successful in business while
having a sustainable activity. The fact that such a big company takes in account corporate
social responsibility in their strategy shows that the CSR is an important factor to be flexible
in any environment. The CSR engagements that Kraft Foods follows improve the living
conditions of people around the world. It doesn’t only create new employment but also totally
change their daily lives by being part of their education, work…
“We should all be concerned about the future because we will have to
spend the rest of our lives their”.
Charles Franklin Kettering
11 References
“Changing landscape: Environmental issues for food firms”. Last read on 21/11/2014.
→ http://mobile.foodqualitynews.com/Regulation-and-safety/Changing-landscapeEnvironmental-issues-for-food-firms#.VG-TE0voY_N
Basta! Nanotechnologies: “Tous cobayes de la nano bouffe”. Last read on 21/11/2014.
→ http://www.bastamag.net/Nanotechnologies-tous-cobayes-de
Bipiz Website. Last read on 16/11/2014.
→ http://www.bipiz.org
CIA: World Fact Book. Last read on 17/11/2014.
→ https://www.cia.gov/
Convergence Alimentaire. Last read on 21/11/2014.
→ http://convergencealimentaire.info
Développement durable. Last read on 16/11/2014.
→ http://www.developpement-durable.gouv.fr/La-RSE-au-niveau-communautaire-et.html
Environmental Policy. Last read on 21/11/2014.
→ http://www.kraftfoodsgroup.com/DeliciousWorld/sustainability/environmental-policy.aspx
e-RSE Website. Last read on 16/11/2014.
→ http://e-rse.net/mondelez-kraft-food-journee-joie-campagne-joywashing-rse-3068/
Genetically Modified Ingredients. Last read on 21/11/2014.
→ http://www.kraftfoodsgroup.com/DeliciousWorld/food-safety-quality/biotech.aspx
GMO Facts. Last read on 21/11/2014.
→ http://www.nongmoproject.org/learn-more/
Illegal GMO Wheat in Kraft Mac & Cheese? Last read on 21/11/2014.
→ http://foodbabe.com/2013/05/30/illegal-gmo-wheat-in-kraft-mac-cheese/
Kraft Foods Group Website. Last read on 17/11/2014.
→ http://www.kraftfoodsgroup.com/
Kraft Foods on Wikipedia. Last read on 17/11/2014.
→ http://en.wikipedia.org/wiki/Kraft_Foods
Kraft Supplier Diversity Website. Last read on 17/11/2014.
→ http://kraftsupplierdiversity.com/overview/
L’état de l’environnement wallon. Last read on 21/11/2014.
→ http://environnement.wallonie.be/enviroentreprises/pages/etatenviindustrie.asp?doc=synpap-tec
LCA Center. Last read on 22/11/2014.
→ http://www.lcacenter.org/LCA9/presentations/Petit-Kraft.pdf
New York Times: “For Oreo, Cadbury and Ritz, a New Parent Company”. Last read on
17/11/2014.
→ http://www.nytimes.com/2012/05/24/business/mondelez-is-new-name-for-krafts-snackfoods-company.html?_r=0
UNESCAP: Online Statistical Base. Last read on 21/11/2014.
→ http://www.unescap.org/stat/data/statdb/DataExplorer.aspx
12