Grape Nuts

							                                                        Kraft Foods

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Company Snapshot

Mac & cheese if you please. Kraft Foods, the #1 food company in the US and #2 in the world (behind Nestlé), extricated
itself from the haze of second-hand tobacco smoke litigation when it was spun off from Altria in 2007. Kraft's North
America unit makes the world's largest cheese brand (Kraft) and the planet's largest cookie and cracker business
(Nabisco). The company's international business offers most of Kraft's US brands, plus national favorites. Seven of Kraft's
brands (Jacobs, Kraft, Milka, Nabisco, Oscar Mayer, Philadelphia, and Post) have revenues of $1 billion; more than 50 hit
the $100-million mark. In 2007 Kraft announced the sale of its Post Cereals business to Ralcorp.

Having edged toward splitting from its former parent company for years, the separation relieves the food maker of many
headaches. The spinoff freed Kraft from any tobacco-related liability that Altria may be found guilty of post-spinoff. It also
eliminated a significant layer of management, which makes it easier for Kraft to improve its recent sluggish sales. Kraft's
plan for boosting its fortune includes streamlining operations and introducing new products.

In order to improve its European operations, in 2007 Kraft announced it was moving its European headquarters to Zurich.
Currently the company has two headquarters in Europe, one in London and one in Vienna, Austria. To begin in the
summer of 2007, the move is expected to be completed sometime in 2008.

Focusing on sharpening its brand portfolio, Kraft sold off its hot cereals business in 2007. The $200-million-dollar sale to
B&G Foods included the old favorites, Cream of Wheat and Cream of Rice. It also sold its Fruit2O and Veryfine juice
brands and operations to Sunny Delight Beverages.

Later that year reports surfaced that Kraft planned to sell its slow-growing Post cereals business (Shredded Wheat, Raisin
Bran, Honeycomb, Grape-Nuts, Pebbles) to Ralcorp, a maker of private-label cereals and other foods. Kraft officially
announced the deal in November 2007. Ralcorp will pay some $1.6 billion in stock for the acquisition. Kraft plans either a
split-off or a spin-off transaction upon closing of the deal, with its shareholders owning 54% of Ralcorp and current
Ralcorp shareholders owning the rest. Post is the #3 cereal maker by sales, after #1, Kellogg, and #2, General Mills. Post
brought in more than $1 billion for Kraft in 2006 but sales for 2007 have been disappointing.

Also in 2007, as part of its plan to offer new product categories, Kraft entered the premade salad market with the test-
marketing of Fresh Creations -- kits containing Oscar Mayer meat, Planters nuts, Kraft cheese, and salad dressing. Its
South Beach Diet brand also began offering chicken-salad kits. Neither product includes lettuce or other salad greens.

Kraft announced that rather than use traditional media (television, magazines, radio), it is launching 70 new products via
the online world, at a virtual supermarket on the Web site, secondlife.com. Prospective buyers of Kraft's new products
can download product information to their cell phones, as well as trade recipes.

On the expansion front, Kraft bought the Spanish and Portuguese operations of United Biscuits; the deal returned to Kraft
the rights to Nabisco trademarks such as Oreo, Ritz, and Chips Ahoy! in Europe, the Middle East, and Africa.

Billionaire Warren Buffet (of Berkshire-Hathaway fame) acquired a small percentage (less than 5%) of Kraft in 2007,
joining the also famously rich and famous-on-Wall Street corporate raiders, Nelson Peltz (and estimated 3%) and Carl
Ichan (about 3%), in ownership of the Velveeta vendor. Peltz and Ichan are typically activist investors, making


All information gathered from Hoovers.
suggestions regarding company operations. Pelz has suggested that Kraft concentrate on its core brands, as well as
divestitures to fund expansion overseas.

Kraft further expanded its foreign operations with its 2007 purchase of the cookie business of Groupe Danone for some
$7.6 billion. The purchase gives the company brands such as Petit Ecolier and Crème Roulee, and makes biscuits the
company's largest global business, representing approximately 20% of total Kraft revenues.

Also in 2007 Kraft, in agreement with Peltz's investment operations, collectively known as Trian Partners, added two
directors (selected by the company and supported by Trian) to its board. Kraft also signed a "standstill" agreement with
Peltz's Trian Fund Management, agreeing to support the board's full list of nominees at Kraft's next two annual meetings.

Late in 2007 Kraft announced the re-re-branding of its South Beach products from South Beach Diet to South Beach
Living, saying that it wanted to capture a more positive image for the products.

Headquarters:         Northfield, IL
Employees:             103,000
2007 Sales:             $37.241 Billion
2007 NI:                 $2.590 Billion


Operating Segments

Snacks
Beverages
Cheese & Dairy
Convenient Meals
Grocery

Selected Brands
    Capri Sun (licensed)
    Cheez Whiz
    Chips Ahoy!
    Express
    Figaro
    Frisco
    Gallito
    Gevalia
    Jell-O
    Kool-Aid
    Kraft Macaroni & Cheese
    Lunchables
    Maxim
    Maxwell House
    Miracel Whip
    Oreo
    Philadelphia
    Planters
    Post
    Ritz
    Royal
    Splendid
    Tang
    Twist
    Velveeta
    A.1.
    Back to Nature


All information gathered from Hoovers.
        Boca
        Bull's-Eye
        Cheese Nips
        Cool Whip
        Cracker Barrel
        Crystal Light
        Easy Cheese
        Gevalia
        Grey Poupon
        Honey Maid
        Jack's Pizza
        Jet-Puffed
        Louis Rich
        Newtons
        Oscar Mayer
        Seattle's Best (licensed)
        SnackWell's
        Starbucks (licensed)
        Wheat Thins


Current News:

Kraft Highlights Alternative Energy Initiatives at Two New York Plants [PR Newswire]

09/17/2008 01:00:00 PM
PR Newswire

LOWVILLE, N.Y., Sept. 17 /PRNewswire-FirstCall/ -- With a vested interest in conducting business in a way that meets the needs
of the present without compromising the ability of future generations to meet their own needs, Kraft Foods (NYSE: KFT) has
placed sustainability at center stage. Two of its New York cheese plants took leading roles today, as Kraft announced completion
of waste-to-energy projects at manufacturing facilities in Lowville and Campbell.

Kraft Highlights Strategic and International Growth Progress at Lehman Brothers Back-to-School Consumer
Conference
2008 Guidance Updated to $1.88 EPS, Excluding Items, Reflecting Post Cereals Split-off
2009 Guidance of at Least $2.00 EPS (GAAP) Announced

BOSTON, Sept. 3 /PRNewswire-FirstCall/ -- Today, at the Lehman Brothers Back-to-School Consumer Conference, Kraft Foods
Inc. (NYSE: KFT) provided investors with an optimistic review of the company's progress at the midpoint of its three-year
turnaround plan. In particular, the company outlined advances at Kraft International, currently a $16 billion business and a key
driver of Kraft's growth plans. Management also updated financial guidance for 2008, reflecting the recent split-off of the Post
cereals business, and provided initial 2009 guidance.

Key People:
   Chairman and CEO                                                  Irene B. Rosenfeld
    EVP Operations and Business Services                             David (Dave) Brearton
    EVP and CFO                                                      Timothy R. (Tim) McLevish
    EVP and Chief Marketing Officer                                  Mary Beth West
    EVP Corporate and Legal Affairs and General Counsel Marc S. Firestone

Largest Competitors:

        ConAgra (2008 Sales: $11,605.7 million)



All information gathered from Hoovers.
        Nestlé (2006 Sales: $80,715.9 million)
        Sara Lee Food & Beverage (2005 Sales: $4,254.0 million)




All information gathered from Hoovers.