1. Miles Eddowes Open Innovation Champion Kraft Foods October 22, 2010 OPEN INNOVATION CASE STUDIES

2. 2 Impressive global reach World’s second-largest food company Approximately $48 billion in revenues Sales in approximately 170 countries 25%+ of revenue from emerging markets 50%+ of revenue from biscuits & confectionery,

3. Portfolio of Iconic Brands Eleven $1 billion+ brands 70+ $100 million+ brands 80% revenue from #1 share positions

4. More than half of our business is now outside North America* *2009 Pro Forma net revenues $48billion are based on the acquisition of Cadbury plc and the divestiture of the Pizza business

5. 5 Building a Global Powerhouse… in Snacks and Quick Meals

6. #1 in Global Confectionery

7. Confectionery and Snacks now make up the majority of the portfolio* *2009 Pro Forma net revenues $48billion are based on the acquisition of Cadbury plc and the divestiture of the Pizza business

8. Inventing Delicious Framework Strengthens How we innovate by integrating the competencies and best practices of Knowledge Management, Open Innovation and Intellectual Property into the technology development process

9. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 9 The Inventing Delicious Framework Helping you deliver better … faster. Ask three high-level questions: What do we know? 1 What do others know? 2 What is our IP strategy? 3 Corporate/ Business Unit Strategy Technical Challenges/Needs Intelligence Gathering IP & Technology Sourcing Strategy Development & Commercialization The “What”The “How”

10. Hub & Spoke Organization: Candy & Gum Research Centers (US & UK) Regional Centers RefreshmentBeverages Cheese & Dairy Coffee Biscuits Chocolate Kraft OI Corporate Hub Hub ► HUB Tools, Process, Culture – Build organizational capabilities and networks – Scouts for game changers and new business partnerships – Governance and metrics – Lead OI Community of Practice ► SPOKE Scout, Content, Collaborate – Identifies key business unit priorities – Scouts for opportunities (suppliers, innovation brokers, licensing, game-changers) – OI champion/change agent

11. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 11 What neither could do alone Joint Research Venture New products for new consumers

12. Game Changers Challenge: Identify Breakthrough Innovation to drive growth Lessons Learned Serendipity in open innovation Scouting non-food/beverage networks to identify breakthrough innovation Co-development agreement ensures success will be based on levering strengths of both partners

13. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 13 What neither could do alone Joint Research Venture New products for new consumers Problem solving Improved execution Fresh Ideas X

14. Supplier Challenge NPD Challenge: Identify Breakthrough Ideas to leapfrog the competition Lessons Learned: By leveraging the supplier challenge process, new products & packaging can be developed quickly while taking advantage of “end-to-end” thinking The business can access supplier creativity and optimize the design and commercialization efforts

15. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 15 What neither could do alone Joint Research Venture New products for new consumers Problem solving Improved execution Fresh Ideas X

16. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 16 Joint Development An answer today Accelerated Innovation New products for existing consumers

17. Joint Development Challenge: Create a platform technology Lessons Learned: Getting the right partner gets us to market first The right relationship and contract allows relationship to mature and diversify into other value creating opportunities

18. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 18 Joint Development An answer today Accelerated Innovation New products for existing consumers Near-Market Licensing Bolt-on benefit Product variants

19. Challenge: respond to competitive threat & key consumer dissatisfier Lessons Learned: Can turn a consumer dissatisfier into a growth enabler Proactive scouting for external technology enabled a get-to-market faster solution Can build off the licensed patent to deliver additional IP & value for Kraft Near Market Licensing

20. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 20 Joint Development An answer today Accelerated Innovation New products for existing consumers Near-Market Licensing Bolt-on benefit Product variants

21. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 21

22. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 22

23. Open Innovation Driving Value Creation VALUE CREATION Supplier & Coman Challenges Supplier Co - development Licensing In - Trademark Licensing In - Trademark Alliances / Partnerships DIFFICULTY & TIME Product In-bounding Licensing In - Technology Licensing In - Technology Searching inside your network Scouting for New Solutions

24. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 24

25. Business Process – Embed open innovation into strategy Cross-Functional BU Team Operations (Internal & Ext) OI Lead Consumer Needs 1. ~~~~~ 2. ~~~~~ 3. ~~~~~ Marketing NPD ProcurementLegal Sales R&D Possible Solutions ►Open innovation considered at onset of project ►Shared ownership & alignment ►One set of goals: BU owned; OI enables ►Created an Innovation Framework incorporating OI

26. FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10) PAGE 26