Kraft 2012 Annual Report Download - page 5

Products which contributed 10% or more to consolidated net revenues for the years ended December 29,
2012, December 31, 2011, or December 31, 2010, were:
For the Years Ended
December 29,
2012
December 31,
2011
December 31,
2010
Cheese and dairy 31% 30% 29%
Meat and meat alternatives 15% 15% 14%
Meals 11% 10% 10%
Enhancers 10% 10% 10%
Refreshment beverages 10% 11% 10%
Coffee 8% 9% 11%
See Note 16, Segment Reporting, to the consolidated financial statements for net revenues, earnings from continuing
operations before income taxes, and total assets by segment.
Significant Divestitures
Pizza Divestiture:
On March 1, 2010, we completed the sale of the assets of our North American frozen pizza business (“Frozen Pizza”) to
Nestlé USA, Inc. (“Nestlé”) for $3.7 billion. The Frozen Pizza business was a component of our Refrigerated Meals and
International & Foodservice segments. The sale included the DiGiorno,Tombstone, and Jack’s brands in the U.S., the
Delissio brand in Canada and the California Pizza Kitchen trademark license. It also included two Wisconsin
manufacturing facilities (Medford and Little Chute) and the leases for the pizza depots and delivery trucks. Approximately
3,600 of our employees transferred with the business to Nestlé. As a result of the divestiture, we recorded a gain on
discontinued operations of $1,596 million, net of taxes, in 2010.
See Note 2, Divestitures, to our consolidated financial statements for additional information on these transactions.
Customers
We sell our products primarily to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers,
distributors, convenience stores, drug stores, value stores, and other retail food outlets in the United States and Canada.
Our five largest customers accounted for approximately 42% of our net revenues in 2012, while our ten largest customers
accounted for approximately 55%. One of our customers, Wal-Mart Stores, Inc., accounted for approximately 25% of our
combined net revenues in 2012.
Sales
Our direct customer teams work with the headquarter operations of our customers and manage our customer
relationships. These teams collaborate with customers on developing strategies for new item introduction, category and
assortment management, shopper insights, shopper marketing, trade and promotional planning, and retail pricing
solutions. We have a dedicated headquarter customer team covering all of our product lines for many of our largest
customers, and we pool resources across our product lines to provide support to regional retailers. We also provide many
of our retail partners with strategic advice regarding product categories.
Our breadth of product lines and scale throughout the retail environment are supported by two sales agencies within our
customers’ stores. Acosta Sales & Marketing supports our grocery and mass channel customers, while CROSSMARK
supports our convenience store retail partners. Both Acosta and CROSSMARK are extensions of our direct customer
teams and are managed by our sales leadership. Both sales agencies provide in-store support of product placement,
distribution and promotional execution.
We also utilize sales agencies, distributors, or other similar arrangements to sell our products in Puerto Rico and in
markets outside of the United States and Canada.
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