3

Kraft Foods Group, Inc.

Forward-Looking Statements

This

presentation

contains

a

number

of

forward-looking

statements.

The

words

“expect,”

“will,”

“make,”

“execute,”

“implementing,”

“growing,”

“driving”

and

similar

expressions

are

intended

to

identify

the

forward-

looking

statements.

Examples

of

forward-looking

statements

include,

but

are

not

limited

to,

statements

regarding

Kraft’s

growth,

commodities,

execution

of

its

plans,

employees,

Integrated

Business

Planning,

cash,

marketing,

innovation,

overhead

expenses

and

costs.

These

forward-looking

statements

are

not

guarantees

of

future

performance

and

are

subject

to

a

number

of

risks

and

uncertainties,

many

of

which

are

beyond

Kraft’s

control.

Important

factors

that

could

cause

actual

results

to

differ

materially

from

those

in

the forward-

looking

statements

include,

but

are

not

limited

to,

increased

competition;

continued

consumer

weakness;

weakness

in

economic

conditions;

Kraft’s

ability

to

differentiate

its

products

from

retailer

and

economy

brands;

Kraft’s

ability

to

maintain

its

reputation

and

brand

image;

continued

volatility

and

increases

in

commodity

and

other

input

costs;

pricing

actions;

increased

costs

of

sales;

regulatory

or

legal

changes,

restrictions

or

actions;

unanticipated

expenses

and

business

disruptions;

product

recalls

and

product

liability

claims;

unexpected

safety

or

manufacturing

issues;

Kraft’s

inability

to

protect

its

intellectual

property

rights;

tax

law

changes;

and

Kraft’s

ability

to

achieve

the

benefits

it

expects

to

achieve

from

the

spin-off

and

to

do

so

in

a

timely

and

cost-effective

manner.

For

additional

information

on

these

and

other

factors

that

could

affect

Kraft’s

forward-looking

statements,

see

Kraft’s

risk

factors,

as

they

may

be

amended

from

time

to

time,

set

forth

in

its

filings

with

the

Securities

and

Exchange

Commission,

including

its

Annual

Report

on

Form

10-K

for

the

year

ended

December

29,

2012.

Kraft

disclaims

and

does

not

undertake

any

obligation

to

update

or

revise

any

forward-looking

statement

in

this

presentation,

except

as

required

by

applicable

law

or

regulation.

4

Kraft Foods Group, Inc.

Cheese & Dairy is Critical to Kraft’s Success

Memo: Operating Income mix is total of BU’s, excluding corporate items

5

Kraft Foods Group, Inc.

George Zoghbi

•

Managing Kraft’s Cheese & Dairy

business since January

2010

•

Assumed responsibilities for Kraft’s

export business in January 2013

•

Joined Kraft in 2007 as VP and Area

Director, Australia/New Zealand

•

Spent 10 years prior to Kraft with

Fonterra Co-operative Group Limited,

the world’s largest dairy co-operative

Executive Vice President and President

Cheese & Dairy and Exports

7

Kraft Foods Group, Inc.

Facts You Should Know

8

Kraft Foods Group, Inc.

Facts You Should Know

9

Kraft Foods Group, Inc.

Kraft Cheese & Dairy Is a Strong,

Diversified Portfolio

•

Brands have 96% household

penetration in the U.S.

•

Kraft buys ~$2.8 billion or ~7% of

U.S. dairy output every year

–

Kraft “employs”

1 out of every 14 U.S.

dairy cows

•

Significant growth opportunity

–

28% share of total U.S. cheese market

–

But no store carries more than 25% of

Kraft Cheese & Dairy SKUs

Revenue Split

Natural

Cream

Cheese

Slices

Velveeta

Other

10

Kraft Foods Group, Inc.

We Have the Best Brands in Our Industry

11

Kraft Foods Group, Inc.

Our Position in the $17bn U.S. Cheese Market

is Unrivaled

Market

Position

Kraft Dollar

Share

RMS vs

Nearest

Branded

Competitor

Retailer

Brand

Dollar Share

Slices

1

#1

55%

6x

30%

Loaf

#1

90%

111x

9%

Cream Cheese

#1

63%

46x

32%

Natural Cheese

#1

18%

3x

45%

Grated

#1

41%

10x

39%

Feta

#1

49%

3x

16%

Snacking

#1

17%

1x

21%

Cultured

#2

19%

0.8x

33%

1

Excludes

natural

slices

Source:

U.S.

Nielsen

Consumption,

xAOC

Data,

YTD

Through

5/25/2013

12

Kraft Foods Group, Inc.

We Compete in a Very Dynamic Dairy Industry

•

Strict regulation established by Agricultural Marketing

Agreement Act of 1937 and Farm Acts of 1996, 2008

–

Import barriers and limited export subsidies

–

Federal & State marketing orders for raw milk pricing

–

Government purchases to support the farm price of milk

•

Complex and delayed dairy raw material pricing

–

Classified pricing system, revenue pooling, etc.

•

High raw material costs as percentage of COGS

•

Commodity prices trending above historical averages

•

Illiquid risk management market

13

Kraft Foods Group, Inc.

Cheese & Dairy Results Unpredictable Over Time

Year

Commodity Prices

Kraft C&D

Net Revenue

Kraft C&D

Operating

Income

2002

Lower

2003

Higher

2004

Higher

2005

Lower

2006

Lower

2007

Higher

2008

Higher

2009

Lower

Memo:

Excludes

restructuring,

divestitures

and

53

week

rd

14

Kraft Foods Group, Inc.

We’re Breaking the Trend vs Commodity Prices

•

Managed through ~30% increase in commodity markets

–

Represented ~$500 million cost headwind

•

Invested back into business,  A&C increased ~65% from 2009

Year

Commodity Prices

Kraft C&D

Net Revenue

Kraft C&D

Operating

Income

2010

Higher

2011

Higher

2012

Lower

2013 Q1

Higher

Memo:

Excludes

restructuring,

divestitures

and

53

week

rd

15

Kraft Foods Group, Inc.

Executing Our Plan

16

Kraft Foods Group, Inc.

Executing Our Plan

•

Organized for growth and efficiency

–

Empowered / accountable business teams

–

Formed Integrated Supply Chain (ISC)

–

Transformed Finance into a lean & efficient organization

•

Actively recruiting top talent

–

Over 60 new leaders joined the BU since 2012

•

Bolstered training programs

–

2,700 hours of training in 2012

17

Kraft Foods Group, Inc.

Executing Our Plan

•

Rolled out Integrated Business Planning

–

Pilot business unit for total Kraft Foods rollout

–

Organization focused on ONE number since 2012

–

Growing operating income

–

Reducing inventory levels

•

Innovating  through technology

–

Milk to cheese

–

Singles with no artificial flavors

Keys

to Success

Product

Management

Demand

Management

Supply

Management

©

Oliver Wight

•

Implementing

“Cash

is

King”

Initiatives

18

Kraft Foods Group, Inc.

Executing Our Plan

•

Growing behind the “Winning Through Brands”

strategy

•

Increasing share of voice behind world-class marketing

•

Enhanced innovation through new products and renovations

Source: Kraft Foods Group, Nielsen Homescan Panel, 2009 & 2012

Selected Awards

Selected Awards

2012 –

Media Idea, Gold: Approved

by Yiayia

2011 –

Media Idea, Gold:  Real Women

of Philadelphia

Worldwide Effie Awards

19

Kraft Foods Group, Inc.

Executing Our Plan

•

Reduced overhead expenses by 2pp of Net Revenue

since 2010

•

Streamlining the portfolio

–

Reduced net SKUs by more than 20% over past 15 months

•

Driving to lowest cost producer status

–

“Supply Chain of the Future”

investments

–

Lean Six Sigma initiatives

•

Modernizing assets

20

Kraft Foods Group, Inc.

Supporting the Kraft Foods Group Mission