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Kraft Foods – Cadbury Integration Discussion with Foodservice Customer XYZ Date:

Kraft Foods – Cadbury Integration Discussion with Foodservice Customer XYZ Date:. Overview. Kraft Foods - Cadbury Integration On September 25 th , Kraft Foods will migrate to an integrated Order to Cash and Supply Chain stance with

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Kraft Foods – Cadbury Integration Discussion with Foodservice Customer XYZ Date:

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  1. Kraft Foods – Cadbury Integration Discussion with Foodservice Customer XYZ Date:

  2. Overview Kraft Foods - Cadbury Integration On September 25th, Kraft Foods will migrate to an integrated Order to Cash and Supply Chain stance with all Customers in the U.S., across both it’s legacy Cadbury and legacy Kraft Foods businesses. This transition represents the culmination of business harmonization efforts that have been underway for many months. As you are likely aware, Kraft’s Board of Directors recently announced it’s intention to create two independent public companies: A high-growth global snacks business, and a high-margin North American grocery business. Much discussion has occurred internally at Kraft Foods regarding the planned September 25th transition date in light of the recent announcement. In the end, the clear benefits of integration for Customers and Kraft, as well as lack of clarity to the post split network environment, resulted in our decision to move forward as planned. As noted, the most compelling reason for moving forward was that many of these Business Process changes represent a migration to acknowledged industry best practices. A good example of a benefit Customers will see right away can be found in Order Cycle Time. While our Order Lead Time is moving from 24 hours to 72 hours for Cadbury, our Order Cycle Time (PO Date to Order Receipt) is actually improving (by 3-5 days in some cases) due to the proximity of Kraft’s Mixing Centers to our customer base. Customers may find this an opportunity to reduce Safety Stock on some items.

  3. Cadbury Integration Headlines Effective 9/25/11 • Cadbury Candy, Gum and Hall’s products will ship Kraft Foods 7 Dry Mixing Centers; • Bethlehem PA • Atlanta GA • Aurora IL • Ft. Worth TX • Ontario CA • In Q4, our recommendation is that separate legacy Cadbury and legacy Kraft Foods PO’s should be placed to ship together to achieve most favorable Bracket Pricing as of ship date 9/25/11 • Legacy Cadbury and legacy Kraft pricing will be fixed at a single Bracket Pricing level for Q4. Customers will be required to meet the requirements of that Bracket across all their business in Q4 to maintain that price in Q1 2012. • 2 PO’s • 1 Shipment/Truck • Note: In recognition of the late communication on integration, we will not consider the month of October in the audit of Q4 business versus Bracket requirements

  4. Cadbury Integration Headlines Effective 9/25/11 • Green & Black’s • Distributed from our Kane Distribution Center in Scranton, PA • Can be combined with the Toblerone business where applicable • Orders will be managed by Kraft Foods International team in Wilkes-Barre PA • Separate communication will be sent out to all G&B customers with their order changes and customer service contact information as the integration nears • If there are any questions, please contact Sue Spengler at 610-577-5656

  5. Cadbury Integration Business Process Changes Effective 9/25/11 Pricing and Terms

  6. Cadbury Integration Business Process Changes Effective 9/25/11 Ordering and Supply Chain

  7. Cadbury Integration Business Process Changes Effective 9/25/11 Other Changes

  8. Appendix Contents; • Temperature Condition Code • Post Audit Policy • Customer Pick Up Program • Customer Unload Allowance • Claims Process • Price List Policy

  9. Cadbury Integration Appendix – Temp Condition Codes Transportation Condition Codes – quality guideline for shipping • Temp Class • Unprotected/Ambient - No restrictions • Protected - 34-95 degrees Fahrenheit • Refrigerated - 34-40 degrees Fahrenheit • Frozen (-15) -zero degrees Fahrenheit • Conditioned - 50-70 degrees Fahrenheit

  10. Cadbury Integration Appendix – CPU Program • Must be a minimum 5,000 CAW per pick up on refrigerated loads; 21,000 on dry. • Application of terms for Backhaul is based on RDD. • Backhaul Allowances are paid off-invoice and are based on ordered CAW. • If a customer commits to CPU, we expect that they will consistently pick up.  Conversions will create service and cost challenges, particularly in the current market of constrained capacity. • A completed Backhaul agreement must be on file for all CPU customers Customer Pickup Program • The Kraft Foods Customer Backhaul Program pays a fair rate based on Kraft’s cost to deliver to Customers. • This program is available to all customers that meet program requirements to pick up ordered product from a Kraft Foods designated Distribution Center using their own carriers or equipment.

  11. Cadbury Integration Appendix - Unload Allowance • Kraft Foods Delivery Program • Kraft Foods provides an unloading allowance to customers for all delivered Efficiency Pricing and Bracket 1 & 2 shipments. The unload allowance is also paid on all Customer Backhaul/Pick-Up shipments • Program Requirements • Kraft Foods Customers that turn trucks in 2 hours or less will receive a $.045 per case unload allowance on qualified Kraft Foods invoiced cases, post-paid following each month • 7 base requirements customers must adhere to (please review Product Delivery Program for further information). • Qualifications: • 3 base qualification standards that must be met and maintained by the customer (please review Product Delivery Program for further information).

  12. Cadbury Integration Appendix - Claims • Claims • In the event of a load discrepancy you will need to note on the bill of ladings • Seal Condition - Intact or Not Intact • Seal Number(s) and signature of person breaking the seal • Notate the # of cases & specify discrepancy (over, short, damage) for each UPC • Call the National Claims Call Center within 24 hours of delivery at 1-800-238-6374 • Send delivery receipt, including all noted discrepancies to: • claims@kraft.com • Fax: 1-800-894-5854

  13. Cadbury Integration Appendix – Price Lists Price Lists • With the integration of Cadbury products into Kraft systems, all pricing will be available via the ezServ system and has been integrated into Kraft’s existing price lists • Contact Sales or Customer Service with any questions

  14. Cadbury Integration Key Contact Information Customer Service Contact Information For questions regarding the integration: • Insert name, title • Insert telephone number • Insert email

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