Best Corporate Steward - Finalist, Kraft Foods


Overview

Northfield, Ill.-based Kraft Foods Inc. (NYSE: KFT) is a global snacks powerhouse with an unrivaled portfolio of brands people love. Operating in approximately 170 countries, Kraft Foods had 2010 revenue of $49.2 billion, more than half of which was earned outside North America. 

A leader in innovation, marketing, health & wellness and sustainability, Kraft Foods is a member of the Dow Jones Industrial Average, Standard & Poor's 500, Dow Jones Sustainability Index and Ethibel Sustainability Index.

Doing Well and Doing Good

"Creating a more delicious world is our goal, and as one of the world’s leading food companies our global priorities are sustainability and health & well-being, including the underlying issues of obesity and malnutrition.

"Our strategy to solve these problems is rooted in business strategy, but leverages the best of our community investments to drive sustainable change. To that end, we take a three-pronged approach which leverages our partnerships, products and advocates for policies that align to four key objectives:

1) Accelerate our ability to meet community needs in impactful and sustainable ways
2) Align with key business markets and our core expertise in food and nutrition
3) Engage the intellectual capital of employees to deepen our impact
4) Build awareness for the social issues and the NGOs we support

"Given the size and complexity of the issues, we partner with others—peer companies, governments, NGOs, farmers, suppliers and consumers—to find innovative, scalable solutions. We focus these efforts in our key markets, including: US, UK, Germany, Spain, France, Italy, Indonesia, India, Brazil, China, Ghana, Philippines, Russia and Mexico."

Corporate Stewardship Highlights

With today’s fluctuating economies, concerns about climate change and political unrest, hunger and malnutrition now pose a significant threat to health and well-being around the world. Across the globe, one in six people don’t have enough to eat; more than 50 million in the U.S. alone.

Paradoxically, one in five people is overweight or obese.

As the largest food company in the U.S and the second-largest in the world, Kraft Foods is well positioned to raise people up—out of hunger, out of poverty, toward healthier lifestyles—through what we make and how we make it.

Recognizing this, the company, along with the Kraft Foods Foundation, works to address food insecurity and malnutrition through its Health & Wellness and Sustainability initiatives.

Health and Wellness through Nutrition

Since 2005, Kraft has Foods has reformulated or launched more than 5,500 products meeting these goals:

  • Reduced fat, sodium, sugar and/or calories
  • Added more beneficial ingredients, such as whole grains, fiber, healthier oils and micronutrients
  • Made products “simpler,” with easier-to-understand ingredient lines and fewer artificial ingredients

Kraft Foods is a founding member of the Healthy Weight Commitment Foundation—a multiyear effort launched in 2009 to help reduce obesity in the U.S., especially among children. As part of that commitment, Kraft Foods continues to develop and introduce lower calorie options for many of our brands.

To help address malnutrition in developing markets, the company offers foods fortified with micronutrients, priced affordably so they are well within reach for millions of consumers with limited disposable income.

For example, in Indonesia, Tiger and Biskuat biscuits, are fortified with nine vitamins and six minerals. Developed in collaboration with the United Nations World Food Programme and The Indonesian Association of Nutritionists, the biscuits supplement the daily nutritional requirements of a growing child, at an average cost of 100 to 500 Rupiah (between one and six cents U.S.) per pack.

Globally, Kraft Foods fortifies its Tang powdered beverage drink with Vitamin C and add other key nutrients specific to a country’s needs—such as iron in Southeast Asia, Vitamin B-12 and folic acid in China, iodine in the Middle East, and Vitamins A and E in Argentina and Uruguay.

Community Investment

From a community investment perspective, Kraft Foods and its Foundation have donated more than $1 billion in cash and food to community-based organizations.

In the U.S. alone, they've  provided more than 1 billion servings of food during the past 10 years. As an example, funding and employee expertise helped develop the research and distribution methods that enabled Feeding America to add fresh fruit, vegetables, protein and dairy products to its national food bank network and make it the #1 category distributed today.

Across the world, the company helps combat malnutrition and promote healthy lifestyles through grants and partnerships to achieve both short- and long-term goals:

Indonesia & Bangladesh (5th and 6th for chronic child malnutrition) - A five-year $50 million public-private partnership with the UN World Food Programme is the company's largest commitment on record. Project Laser Beam (PLB) helps establish women-operated rural farms that grow vegetables and raise livestock. It helps women establish retail carts that sell nutritious foods, soap and agricultural supplies. And it trains community leaders to deliver nutrition education at schools and other places where families gather.

United States –$4.5 million to Feeding America funds 25 mobile food pantries, bringing fresh, nutritious foods to “food deserts” with limited or no access to groceries or food pantries. Over three years, they’ll deliver 50 million meals.

Indonesia & Philippines–$3 million to Save the Children supports community-based meal distribution, urban gardens, nutrition supplements and health care reaching nearly 200,000 children and families.

Russia – $1.3 million to CAF Russia supports nutrition education, teaching fitness and smart food choices to more than 10,000 children and their families as part of our successful Health4Schools initiative, expanded from the UK.

Brazil –$2.3 million to INMED Partnerships for Children supports nutrition education, basic hygiene and active play for more than 675,000 students in six cities, as well as family gardens for fresh produce in our Health in Action initiative.

China – ¥5.5 million with China Youth Development Foundation to build Kraft Hope Kitchens in five Chinese provinces, providing hot meals for 50,000 rural school children, as well as teaching cooking skills and food hygiene to teachers.

United States - $1 million to The Food Trust to increase fresh food access in urban and rural communities across the US. The joint Food for Every Child effort in Illinois, which was a public/private partnership with community groups, government, and retailers, helped secure $10 million from the state legislature in 2010 to spur grocery store development in underserved communities. Kraft Foods is now expanding efforts to address food deserts in Georgia, Massachusetts, Minnesota and Texas.

Sustainability

The demands being placed on the planet are growing. Sustainability is a strategic business priority for Kraft Foods, with a focus on six areas where the company can make the biggest impact: packaging, transportation/distribution, energy consumption, greenhouse gas emissions, water, agricultural commodities and waste.

Since 2005, Kraft Foods has lessened its impact on the environment, cutting packaging by nearly 200 million pounds while reducing greenhouse gas emissions by 18%, energy consumption by 16%, water use by 30% and waste by 42%.

Sixty million miles have been cut from the company's global distribution network.

Kraft Foods is helping to improve the livelihoods of more than a million farmers through partnerships that support sustainable agriculture:

Efforts to help deliver social, environmental and economic benefits include a collaboration with the Rainforest Alliance, begun in 2003, and now the largest buyer of coffee and cocoa from Rainforest Alliance Certified farms. In 2010, the company's purchases of Rainforest Alliance Certified coffee helped support more than 430,000 workers tending more than 210,000 acres in 12 countries in Africa, Central America, South America and Southeast Asia.

The company also helps farmers through the Cocoa Partnership, the $72 million, 10-year commitment to cocoa farmers in the Dominican Republic, Ghana, India and Indonesia. An additional partnership with the Bill and Melinda Gates Foundation will ultimately help an estimated 1.6 million cocoa and cashew farmers in Africa. In Ghana, the company quadrupled the volume of cocoa sold under Fairtrade terms, resulting in $3.7 million in Fairtrade social premiums.

Communities have used the premiums to purchase mobile health clinics, farm equipment and farm-skills training. In the Daloa region of Côte d’Ivoire, one of the farm cooperatives used a portion of its premium from selling Rainforest Alliance Certified cocoa to build a small health-care facility staffed by government-assigned health professionals.

For the first time, farmers and their families can find local treatment for ailments, such as malaria, and mothers can deliver their babies close to home.

Corporate Leadership

Kraft Foods' stewardship values are driven both top-down and bottom-up. For example, employee engagement is a crucial part of the company’s culture. Via the UN Volunteer program, Kraft Foods sends teams of skilled experts to help solve food processing and manufacturing issues for small- to medium-size food companies in developing countries.

Whether helping Albanian coffee producers create the formula for producing a consistently perfect bean, or teaching temperature control to meat processors in West Africa, the focus is on sharing expertise where it’s needed most.

During Kraft Foods annual Delicious Difference Week, a global week of community service, thousands of employees dedicate their time and skills to serve communities where they live and work. In 2010, nearly 25,000 employees participated in 56 countries, including Chairman and CEO Irene Rosenfeld and 90% of top executives.

Executive participation cuts across the company and across the globe. Lorna Davis, Sr. Vice President, Global Biscuits, led staff volunteers at the inaugural Kraft Hope Kitchen schools in October 2009.

Eight months later in June 2010, Kraft Foods China employees from Beijing, Shanghai, Suzhou, Guangzhou, Jiangmen cities and Jilin, Hunan, Anhui provinces had provided more than 6,000 hours of volunteer service to the Kraft Hope Kitchen schools, benefitting more than 50,000 rural school kids with improved food supply and nutrition.

Executive Vice President and Chief Financial Officer David Brearton, through Feeding America, volunteers at food banks and serves as Feeding America Board Chair.

Brian Folkerts, Vice President, Government Affairs, serves on the Board of the Congressional Hunger Center.

In 2010 when Kraft Foods reached a milestone of donating a million kilograms of food to an Australian food bank, Kraft Foods executives from around the world converged on Melbourne to assist Rebecca Dee-Bradbury, President of Kraft Foods Australia & New Zealand, in packing food relief hampers. Executive volunteers included Kraft Foods President Asia Pacific Pradeep Pant; Vice President Marketing Asia Pacific, Shawn Warren; U.S.: Senior Vice President Timothy Cofer; Chief Marketing Officer Mary Beth West; and Executive Vice President Sanjay Khosla.

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