Supplier Webinar

1. Supplier Webinar • March 26, 2014

2. Agenda • Welcome • Why we’re here • 2013 in Review • 2014 People, Priorities and Project K • Supplier Relationship Management • Supplier Measurement Enhancements • What’s next Kellogg Confidential

3. Why We’re Here • 2013-2014: Period of significant Change • Global Procurement Transformation • Project K • People and Leadership • Change in Supplier Engagements • Supplier Day shift to later in year • Find a more frequent/effective way to engage with our suppliers Kellogg Confidential

4. 2013 in Review Success! Kellogg Confidential

5. 2013 in Review • Great Results • Delivered the budget – forecast accuracy • Met Direct materials savings targets • Significantly exceeded Indirect savings targets • Supplier Diversity spend • Exceeded goal • 15 consecutive years of growth • Diversity & Inclusion • Partners and relationships • Capability and leadership All in the midst of tremendous changes in our function and across our business Kellogg Confidential

6. 2013 in Review • Global Procurement Transformation • Year 1 of 3 year journey • Wave Approach – Capability building • Org Effectiveness • Org Design Kellogg Confidential

7. What is Global Procurement Transformation? • Goals: • Deliver 1.5X(50%) improvement in negotiated cost savings over 3 years1 • Make savings long-term sustainable • Re-imagine operating model to: • Best people, best process, best insights • Maximize global spend leverage • Minimize duplication of effort • Operationalize Procurement best practices with Kellogg Work Systems (KWS) • Be Relentless in our application of Best Practice & Continuous Improvement • Go Bigger, Go Bolder & Highlight Different Strategic Approaches 1 Compared to historical 09-12 average cost savings Kellogg Confidential

8. 2 3 4 6 5 1 Key structural changes – sustainable change and results Key changes Rationale • Drive single vision for procurement globally • Deliver 1.5x savings using new procurement tools & standard techniques globally Change reporting structure of Regional CPOs to report directly to Global CPO • Leverage global spend and volume to improve savings capture • Ensure categories are managed at right value creation level, e.g. global vs. regional vs. local • Enable development of strategic supply base to support Kellogg globally Establish global category managers that drive strategic sourcing of key categories globally • Ensure category managers focus on key value added activities • Identify clear roles and responsibilities and escalation paths to manage day to day operational activities Establish regional procurement operations group to segregate tactical and strategic activities • Establish an entry level position for procurement to attract talent • Develop capability to conduct market analysis, spend analytics and provide analytical horse power to support category managers Develop in-house analytical capability • Standardize processes globally and implement advanced procurement tools (clean sheet, fact based negotiations etc.) • Invest in capability building Establish Procurement Knowledge Center • Program management of transformation wave activities globally • Manage key procurement initiatives and special projects Establish Procurement Management Office Kellogg Confidential

9. We have designed the future Procurement organization to be much more global in the way strategies are developed and executed Current strategic sourcing matrix Future strategic sourcing matrix • % of total spend • % of total spend Global Global 6 19 Regional Strategy Execution 66 2 Regional Strategy Execution 34 43 0 Local Local 4 22 1 1 2 Local Regional Global Local Regional Global Strategy Development Strategy Development Organizational changes to improve focus on strategic sourcing • All operational activities will be transferred to a newly formed procurement operations function to refocus 30-40% of category managers’ time • Global and lead category manager structure enables strategy setting at global level and allows procurement to pull a more holistic set of levers and capture synergies globally Kellogg Confidential

10. Results are grounded in a fundamentally different approach • Approach • Outcome Category transformations • Next-generation sourcing levers (e.g., best-in-class cleansheets / RFPs, component based pricing) • Leverage of global purchase volume • Assessment of demand and process levers (e.g., spec optimization, contractor management) • Waves 1-4 procurement savings at or above target • Additional impact from continuous improvement and reformulation opportunities Capability building • Reinforcement of KSS 2.0 through regional boot camps • Cross functional engagement (e.g., with RQT and Engineering) • Side-by-side working model to sustain change • Energized and motivated procurement organization • 75+ leads trained in KNA, KEU, KLA • Responsible sourcing introduced • Best practices introduced Organization • Continued design and implementation of the new Procurement organization • Global category managementwent “live” with Cocoa and Capital Kellogg Confidential

11. Global Procurement Global Leadership Team Contractor/ 3rd Party Global Category Manager Open Position Debasis Chanda Brenda Brenner Procurement IT BP CoMan BP Kellogg Confidential

12. Kellogg Confidential Global Procurement KNA Leadership Team Contractor/ 3rd Party Global Category Manager Open Position 12

13. 2014 KNA Procurement Priorities Deliver Results • Align and/or improve (as appropriate) the 4 SC Foundations: • People Safety • Food Safety and Quality • Customer Service • Financial Performance and Cost Savings • Deploy, Align and/or Execute Project K initiatives: • Network Optimization • Global Business Services • Functional Transformations - Global Procurement, Regional CLS Initiatives, Global Engineering Strengthen the Organization • Support S&OP, KIMM, and DTV across the Business Units delivering improved supply management, pipeline of savings and initiatives through partnering and engagement. • Align KSS 2.0 capability training, playbooks, and rollout to KWS principles • Develop KNA/global Procurement organization talent and bench strength through regular talent review, PDP, PMP, coaching and mentoring programs and cadence. • Visibly support diversity and inclusion, and improve on D&I metrics. Create the Future • Support and enable Global Growth Categories, deliver the day to day business, enable Responsible Sourcing and execute the business growth and innovation objectives. Kellogg Confidential 13

14. Project K Supply Chain Town Hall | Feb. 13, 2014 14 Kellogg Confidential

15. Vision & Purpose Our Vision To enrich and delight the world through foods and brands that matter Our Purpose Nourishing families so they can flourish and thrive Supply Chain Town Hall | GBS Update | Feb. 13, 2014 15 Kellogg Confidential

16. 16 16 Kellogg Confidential

17. Catalyst for Growth Supply Chain Town Hall | GBS Update |Feb. 13, 2014 17 Kellogg Confidential

18. Catalyst for Growth Supply Chain Town Hall | GBS Update |Feb. 13, 2014 Kellogg Confidential 18

19. Project K Update Project K Update: Investing in Growth Global Business Services • Global Business Services • Global • Regional • Local Supply Chain Town Hall | GBS Update |Feb. 13, 2014 19 Kellogg Confidential

20. 20 Kellogg Confidential

21. The New and Improved Supplier Measurement System (SMS) 21 Kellogg Confidential

22. Improving – Team Effort • 1. Met with Focus Group of Suppliers • 5 Suppliers - GPI, Chaucer, Kerry, Exopack and Bunge • 2. Met with Statistician at WKKI • 3. Met with Focus Group of Internal Surveyors • 5 Plants - Battle Creek, Grand Rapids, Lancaster, Omahaand Zanesville • 4. Conducted 2 Pilots • Plant Pilot - 5 Plants above • CoMan Pilot – Entirety of Mid-Year 2013 Ratings • 5. Multiple Training Webinars and Training Documentation 22 Kellogg Confidential

23. Comparison • The Old SMS • Surveyor chose suppliers to rate • Surveyor had to navigate to SMS site • We could not track compliance • Manual Reminders AFTER • Numbers-based ratings • Once submitted, survey was not viewable/editable • No view into historic ratings • The New SMS • We know who should rate who • We PUSH the surveys to the surveyor • We have visibility - ALL surveys • Automatic reminders round • Descriptor-based ratings • Surveyor can view/edit surveys until due • Surveyor can see historic ratings 23 Kellogg Confidential

24. The New SMS: The Survey • Brief Descriptors • Rating Buttons – no numbers • In Depth Descriptors • Comments • Historicals 24 Kellogg Confidential

25. The New SMS: The Rating Scale • New 7-point scale • Focus on Color • No Numbers – only descriptors • HARD ANCHORS Kellogg Confidential 25

26. The New SMS: The Descriptors • Detailed and specific GUIDELINES • Aids all surveyors – old and NEW • Removes subjectivity Kellogg Confidential 26

27. The New SMS: The Comments • Unlimited comment length • Ability to attach documents as evidence of rating • Ability to see last round’s rating for this supplier 27 Kellogg Confidential

28. What’s Next? • Questions? (SupplierCommunications@kellogg.com) • Feedback please! • Engagement target June 2014. • Supplier Day/Supplier Diversity Event in November 2014. Thank you! Kellogg Confidential