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Kraft Foods Southern Africa www.kraftfoods.com

CORPORATE BROCHURE Kraft Foods Southern Africa Kraft Foods Southern Africa

raft Foods is renowned across every continent as Kthe powerhouse that punches with the tastiest and best-loved snacks. Forty of the 100 or so brands that Kraft holds in its global portfolio have been in existence for over a century and the company now ranks as the second largest food company in the world. Through a clutch of iconic brands that include , , , Oscar Mayer and Philadelphia, not forgetting Kraft itself of course, the company markets an eclectic mix of biscuits, confectionery, beverages, cheese, grocery products and convenient meals in over 170 countries. Last year, Kraft had revenues of $49.2 billion—more than half of which was earned outside North America. As disposable incomes rise across the developing world and instantly impact on food budgets, emerging markets are a priority and the company is eyeing the African continent with a new zeal. Kraft’s presence in Southern Africa received a major through its recent amalgamation with Cadbury. The Cadbury brand became part of Kraft in February 2010, with both companies already having an established presence in Southern Africa. The integration of the two companies into a single legal entity—Kraft Foods South Africa—was formally completed on March 1, 2011. Cadbury had the larger presence and the move dramatically and instantly gave Kraft a much more sizeable footprint in the region, particularly in confectionary markets. The company now manufactures and markets candy, Nampak Flexible ‘Krafts’ a strategic relationship with the world’s second largest food company

Kraft is well known as range, as well as quality packaging. This Allows Kraft to a company that pours their moulded and count line maintain its own unwavering quality, heart into creating foods that wrappers for Lunch Bar, environment and production process controls. are wholesome, delicious and chocolate, Perk and P.S. chocolate bars to Recently, Nampak Flexible also became the loved by people worldwide; it’s a company mention but a few. first South African company to gain Oliver that’s always been there with the brands that In getting consumers’ favourite brands ‘out Wight Class A accreditation for Integrated people know and trust. So when it comes there’, both Kraft and Nampak Flexible do not Business Planning (IBP). IBP can be described to something as inseparable from Kraft’s underestimate the value of their longstanding as advanced sales and operations planning products as packaging is, the supplier of that partnership and its advantage when it comes (S&OP), allowing Nampak Flexible to plan and on another new packaging needs to be just as dedicated. For to ongoing innovation, building on past manage their entire organisation over a 24 product launch in May of Kraft, one such packaging supplier is Nampak successes and developing better products month horizon or more, aligning the strategic this year which has seen the popular Flexible, whose take on packaging reads for the future; and because both food and and tactical plans each month, and allocating Perk chocolate product take supermarket much like Kraft’s own position on foods. packing supplier are on the same playing critical resources - people, equipment, shelves by storm. Prior to the launch of Perk, This is because Nampak Flexible is a field, the results are always impressive. inventory, materials, time and money - to Nampak Flexible supported the machine company that pours their heart into As a pivotal starting point, and of the satisfy customers in the most efficient commissioning and plant trials. creating the very best packaging highest importance to Kraft are the safety manner. The end result is significant reduction Another outstanding example of the solutions, ones that their and quality of the company’s products – in inventory levels, faster lead times and excellent partnership between Kraft and customers know and trust too. as are the trust and confidence of Kraft’s ultimately closer partnerships with clients, Nampak Flexible is the local manufacture of Being the World’s second consumers and customers. As such, which in turn reflects on Kraft’s own very high the new stick pack – a previously wholly largest food company, Nampak Flexible must meet all of the right standards of delivery down the line. imported product. With Nampak Flexible Kraft’s list of iconic certifications and accreditations - an area Ongoing innovation between the two upping their capability to print, apply heat brands is a long where the packaging supplier has not failed companies has also seen numerous seal, hot melt and varnish in one pass – a one, and as to deliver. innovative products successfully hit the process which has been extremely difficult Africa’s largest Amongst the company’s many market, including the likes of the Lunch Bar for competitors to emulate – the Halls stick flexible packaging certifications, Nampak Flexible is ‘Laduma’ limited edition World Cup pack no longer needs to be imported. This manufacturer, a ISO 14001 - one of the highest 2010 promotion achievement brings with it enormous supply Nampak Flexible’s international environmental and the re-launch chain benefits such as increased speed of the role in helping management standards - HACCP of the Bournville Halls product to local markets. maintain the (Hazard Analysis and Critical chocolate range. What the relationship between Kraft and reputation of many of Control Points), AIB (American More recently the Nampak Flexible ultimately proves is that these brands is crucial. Institute of Bakers) and BRC two partners put their quality and innovation are a result of working Currently Nampak Flexible supplies (British Retail Consortium) heads together and very closely together, with the overriding packaging for a range of Kraft’s leading certified supplier. This means introduced a water based goal being that of maintaining the heritage brands, including the Chappies wrappers, that Kraft receives and adhesive in 2010, as well and reputation of those brands that are such Royal Baking Powder sachets, laminated subsequently delivers as embarked favourites amongst consumers. bags for the Endearmints and Manhattans products with the highest Kraft Foods Southern Africa

The Southern African confectionary market is very comprehensive in that there is both a developed market and an undeveloped market chewing gum, biscuits, coffee and groceries. Foods Southern Africa. “This raises challenges Southern Africa, in keeping with its economic in ensuring that we have a comprehensive status, has the most keenly developed appetite premium portfolio to meet the needs of our more of all for snack foods. The region has been added developed market as well as having a number of to the roster of 10 priority developing markets products that offer value for money.” that will receive disproportionate investment One example is the launch last year of the from the company. Cadbury Perk bar. It is a premium product; but “The Southern African confectionary market Kraft managed to hit a R2 price point, making it is very comprehensive in that there is both a far more affordable for consumers. “It’s not about developed market and an undeveloped market,” making lower value, lower quality products—it’s explains Sean Murphy, managing director of Kraft about making the same premium Cadbury brands Kraft Foods Southern Africa

3D Marketing

3D Marketing and Field Support Services consumer goods (FMCG) industry. (FSS) have been proud sales and Optimal coverage and maximum exposure Kraft is set to invest US$150 million into merchandising partners to Cadbury SA (now of manufacturers’ brands are made possible Kraft Foods SA) for over 30 years. through fully-fledged sales offices based its African manufacturing operations Our winning team partnership has seen us throughout South Africa, servicing retail, achieve record growth over the years. We are wholesale and independent traders across over the next three years committed to the Kraft Foods strategy, which rural and urban areas. is to become a global snacks powerhouse 3D understands the value of lifetime available at lower price points,” Murphy comments. sweets; and Ghana for powdered beverages. and to have an unrivalled portfolio of brands partnerships and focuses on building these Today, Kraft has a headcount of 2,400 Kraft is set to invest US$150 million into its people love. with manufacturers rather than establishing employees in Southern Africa and operations are African manufacturing operations over the 3D Marketing Services was established principal-agent-based relationships. The guided by a head office situated in Johannesburg, next three years, targeting the operations that in 1978 and provides award winning team works closely with its partners to allow South Africa. The company has six manufacturing manufacture high-profile brands such as Stimorol comprehensive tailor-made sales and for successful and effective representation plants in Southern Africa: Port Elizabeth, South chewing gum and Cadbury Dairy Milk chocolate. merchandising solutions to manufacturers and of manufacturers’ brands on-shelf, therefore trade customers. 3D is South African owned supplying a vital link in the supply chain Africa for chocolate; Botswana for chewing gum; The company is also investing in increased and based, offering national merchandising, process, allowing manufacturers to effectively Swaziland for sweets; Tunney in Johannesburg, capabilities and capacity for its research and field marketing, sales representation and target and successfully communicate with South Africa for biscuits, sweets and royal baking development facilities in Johannesburg, which management services to the fast moving their end consumers. powder; Namibia for speciality chocolates; Kenya will serve as a centre of excellence throughout for powdered chocolate beverages; Nigeria for Africa. “Improving our cost base is of course Kraft Foods Southern Africa

our key objective, in addition to enhancing our people capability and being better able to Afripack meet our customers’ and consumers’ needs,” Afripack Consumer Flexibles has a long standing comments Murphy. relationship with Kraft Foods SA through its packaging The company’s Port Elizabeth site in particular of the Cadbury brands Tempo, , Tumbles, has been the beneficiary of targeted investment. Choc Eclairs and Hall’s. The company recently installed “We have had a large amount of new equipment Gravure printing technology as further commitment to and capability put into the plant over the last supplying both Kraft Foods and the African market with three years, which was really driven around the top end flexible packaging. For more information, please areas of automation and improved production see our ad and visit our website. and process control. We have reorganised the

workforce to enable us to better invest in the Woodlands Dairy development of skills sets and consequently provide a more sustainable cost base and Woodlands Dairy is the manufacturer of First Choice produce high quality products that meet dairy products and is also the co-packer for many consumers’ needs,” he states. blue-chip companies in South Africa. The production Of all the improvements that are currently plant is situated in Humansdorp which is right in the taking place, Murphy feels it is investment in heart of South Africa’s thriving dairy region. Partner relationships that will help Kraft Southern Africa with Woodlands Dairy and become a part of the most admired dairy company in Africa. to further cement its competitive advantage. Kraft Foods Southern Africa

“We need to work very hard on our relationships with our partners—both our suppliers and our We have reorganised the workforce customers. As a leadership team we believe we have lost some ground in this area over the last to enable us to better invest in the 18 months due to the fact that we have been development of skills sets quite internally focused as we worked through the mechanics of the integration and some internal reorganisations. So we now need to refocus and pillars. The project has been made possible in this enterprise development project, which rebuild our relationships, progressing them into with funding of R2.3 million from the Cadbury comprises skills training in baking, sewing, partnerships.” Foundation which provides annual funding to nappy-making and vegetable gardening And that focus on relationships extends to the Africa. The money will be used to empower enterprises. The funding will be used to company’s dealings with local communities. “As communities to become self-sustainable through purchase infrastructure—including equipment a global food company, our corporate social small and medium enterprise development.” and offices—as well as the provision of technical responsibility extends to three key areas—hunger The initiative will see income-generating skills and business skills training. Depending on and poverty alleviation, healthier lifestyles and being taught to unemployed community members the success of the pilot project, Kraft plans to sustainable agriculture,” explains Murphy. in the township of Tembisa, on Johannesburg’s replicate the concept at other sites in South Africa “We recently launched our flagship Enterprise East Rand. Around 30 unemployed community and other parts of Africa where it has operations. Development Project which speaks to all three members have been identified to participate www.kraftfoods.com BE Kraft Foods Southern Africa www.kraftfoods.com