Kraft Foods Announces Equity Investment in Ethnicgrocer.Com, Inc.

NORTHFIELD, IL, August 22, 2000 -- Kraft Foods, the nation's largest packaged foods company, announced today that it has made an equity investment in EthnicGrocer.com, Inc., the privately held Internet-based retailer targeting ethnic communities.

"Kraft's new strategic partnership with EthnicGrocer.com provides exciting opportunities for both companies," said Alene Korby, Senior Vice President of Procurement for Kraft, who will join EthnicGrocer.com's board of directors. "We will gain insights into an Internet-based food company's operations, while sharing our supply chain and quality systems expertise with EthnicGrocer.com."

"EthnicGrocer.com is a leader in the procurement, distribution and online retailing of ethnic consumer products from across the globe using our proprietary technology and supply chain platforms," said Parry Singh, President and CEO of EthnicGrocer.com, Inc. "Leveraging this expertise on top of Kraft's existing systems knowledge, EthnicGrocer.com is well-positioned for future growth."

"This e-partnership - along with others like Food.com -- further expands our participation in online food solutions," noted Paula Sneed, President of Kraft's E-Commerce Division. "We will continue to explore joint strategic initiatives that offer synergies and growth potential for Kraft."

About EthnicGrocer.com, Inc.

EthnicGrocer.com, Inc. has engineered a technology-centered global supply chain that sources the largest selection of ethnic foods and products from around the world for consumers and businesses. The virtual ethnic marketplace offers thousands of high-quality, affordable, ethnic products from all over the world, as well as easy-to-follow recipes and interesting information about different cultures. The company developed and launched the following four Web store fronts on top of its technology and supply chain infrastructure: www.Namaste.com targeting the Asian-Indian market, www.GongShee.com serving the Chinese market, www.QueRico.com targeting the Latin American market and www.EthnicGrocer.com marketing to cooking enthusiasts. These virtual ethnic stores provide the widest range of products used by consumers in each culture. One-stop shopping at Namaste.com, GongShee.com or QueRico.com for groceries, cooking utensils, music, movies, health and beauty aids, as well as religious products and traditional cultural merchandise offers new convenience and valuable benefit to the respective ethnic populations. EthnicGrocer.com Inc. is a private company headquartered in Chicago. For more information, please visit www.EthnicGrocer.com or call (312) 762-2600.

About Kraft Foods, Inc.

Kraft Foods, headquartered in Northfield, IL, is the North American food business of Philip Morris Companies Inc. Of all the food companies offering meal solutions via the Internet, Kraft's web site (www.kraftfoods.com) has the highest number of individual visitors, according to PCData On-line.