Kraft 2006 Annual Report Download - page 14

Other Matters
Customers
For the years ended December 31, 2006, 2005 and 2004, the Company's five largest customers accounted for approximately 29%, 26% and 28%,
respectively, of its net revenues, and the Company's ten largest customers accounted for approximately 40%, 37% and 38%, respectively, of its net revenues. One
of the Company's customers, Wal-Mart Stores, Inc., accounted for approximately 15%, 14% and 14% of net revenues for 2006, 2005 and 2004, respectively.
Employees
At December 31, 2006, the Company employed approximately 90,000 people worldwide. Approximately 30% of the Company's 41,000 employees in the
United States are represented by labor unions. Most of the unionized workers at the Company's domestic locations are represented under contracts with the
Bakery, Confectionery, Tobacco Workers and Grain Millers International Union; the United Food and Commercial Workers International Union; and the
International Brotherhood of Teamsters. These contracts expire at various times throughout the next several years. Outside the United States, labor unions or
workers' councils represent approximately 55% of the Company's 49,000 employees. The Company's business units are subject to a number of laws and
regulations relating to their relationships with their employees. These laws and regulations are specific to the location of each enterprise. In addition, in
accordance with European Union requirements, Kraft International Commercial has established European Works Councils composed of management and elected
members of its workforce. The Company believes that its relations with employees and their representative organizations are good.
In January 2004, the Company announced a three-year restructuring program. In January 2006, the Company announced plans to expand its restructuring
efforts through 2008. The entire restructuring program is expected to result in the elimination of approximately 14,000 positions. At December 31, 2006,
approximately 8,400 of these positions have been eliminated.
Research and Development
The Company pursues four objectives in research and development: product safety and quality; growth through new products; superior consumer
satisfaction; and reduced costs.
The Company's research and development resources include more than 2,000 food scientists, chemists and engineers, deployed primarily in five key
technology centers: East Hanover, New Jersey; Glenview, Illinois; Tarrytown, New York; Banbury, United Kingdom; and Munich, Germany. These technology
centers are equipped with pilot plants and state-of-the-art instruments. Research and development expense was $419 million in 2006, $385 million in 2005 and
$388 million in 2004.
Trademarks and Intellectual Property
Trademarks are of material importance to the Company's businesses and are protected by registration or otherwise in the United States and most other
markets where the related products are sold. The Company has from time to time granted various parties exclusive or non-exclusive licenses to use one or more
of its trademarks in particular locations. The Company does not believe that these licensing arrangements have had a material effect on the conduct of its
business or operating results.
Some of the Company's products are sold under brands that have been licensed from others on terms that are generally renewable at the Company's
discretion. These licensed brands includeStarbucks bagged coffee,Seattle's Best coffee, andTorrefazione Italia coffee for sale in United States grocery stores and
other distribution channels,Capri Sun aseptic juice drinks for sale in the United States and Canada,Taco Bell Home Originals Mexican style food products for
sale in United States grocery stores,California Pizza Kitchen frozen pizzas for sale in grocery stores in the United States and
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Source: KRAFT FOODS INC, 10-K, March 01, 2007