Donation of cereal to help fight hunger among highlights of Shareowner's Meeting

Those who attended Kellogg's 87th Annual Meeting of Shareowners in Battle Creek on April 24 were among the first to hear about Kellogg's plans to make a major donation of cereal to help fight hunger in the United States.

"Today, the availability of food at food banks across the country is at an all-time low," President and CEO David Mackay told the audience of more than 1,700 shareowners who packed the W.K. Kellogg Auditorium. "At the same time, more than 35.5 million Americans are struggling to put food on the table. To help answer this overwhelming need, Kellogg is announcing today that we will donate an entire day's worth of cereal production to Feeding America."

Consumers, employees being asked to support 'unprecedented' donation Kellogg encouraged consumers to join us in fighting hunger in a press release issued Friday announcing Kellogg's donation to Feeding America Beginning June 17, consumers can visit Kelloggs.com/ FeedingAmerica to help feed a family in need while helping to fill their own pantries. For donations of $5 or more, we will give them $5 in coupons toward their next purchase of Kellogg's cereal. "This is an unprecedented donation for Kellogg Company," David Mackay said in the release. "We wanted to dig a little deeper to help those Americans struggling to put food on their tables during these tough economic times and encourage others to give if they can as well."

Summing up Kellogg's 2008 performance, President and CEO David Mackay noted, "We either met or exceeded all of our sustainable growth targets. It's a real credit to the efforts of our 32,000 employees around the world that we delivered our seventh consecutive year of growth." Read David Mackay's message to retirees

Feeding America, formerly known as America's Second Harvest, is the nation's leading food-bank network. Kellogg has long partnered with the organization to help support its national hunger-relief efforts.

Kellogg donation critical

The donation will provide critical sustenance for food banks across the country as they are challenged to keep up with rising demand. Network agencies report seeing an average increase of 30 percent in the need for food assistance.

As David pointed out, cereal is a type of food that's particularly needed at food banks because it's convenient, shelf-stable and nutritious.

"Kellogg's donation of 3.5 million pounds of cereal, worth approximately $10 million, builds on the company's longstanding commitment to Feeding America and to helping fight hunger around the world."

He continued, "We are pleased to contribute to such an important effort in a significant way. We encourage each of you to help fight hunger as well and give what you can to Feeding America, or volunteer your time at your local food bank or pantry."

Kellogg typically contributes nearly 25 million pounds of product to food banks each year. This donation will be above and beyond that amount.

Sustainable growth key

The Feeding America announcement was among the highlights of the Annual Meeting, which was hosted by David and Chairman of the Board Jim Jenness. The pair reiterated their confidence in Kellogg's ability to deliver another year of sustainable, dependable growth in 2009 despite the continuing global recession and economic uncertainty.

"Through it all, our focused strategy has not changed," David said. "We are the global leader in ready-to-eat cereal, which makes up more than 50 percent of our sales globally. We are committed to this great category and driving its long-term growth. In addition, our snacks business makes up approximately 40 percent of our global sales, and we continue to expand in both the U.S. and globally."

David added that Kellogg has an advantage in that we do business in three of 10 largest retail categories: cold cereal, cookies and crackers.

"We continue to remain confident in our ability to grow these categories through investment in consumer communication, innovation and renovation, and by their inherent value to consumers in today's environment," he said, stressing that strong innovation and renovation are crucial to maintaining the relevance of our brands.

"In these challenging times, we have a greater resolve to drive fewer, bigger, better innovations and renovations to enhance and strengthen our business and the businesses of our customers," David said. "We believe this is the right approach, especially today when consumers are even more risk-averse."

While cost control has always been a key part of Kellogg's business model, the current economic environment has increased the company's emphasis on savings, David noted. He explained that cost savings not only allow us to keep pace with inflation, but also to invest in the innovation/renovation and brand-building efforts that have been central to our ongoing success.

"We have set a goal of achieving $1 billion in cost savings over the next three years, from 2009 to 2011. To be clear, come the end of 2011, we expect to have
$1 billion of annual savings that we don't have today. We'll find these savings by simplifying and streamlining our manufacturing processes, improving our procurement efforts, and applying even more rigor and discipline to our operations," David said.

To learn more, you can listen to a replay or download an MP3 audio podcast of the meeting at the Kellogg's Investor Relations site.