DEAR FELLOW SHAREHOLDERS:
For the past year I have looked forward to the time when I could say that: “we have for several months now been producing at record volumes.” There, I’ve said it. After the troubles of last year, it feels good to finally blurt it out.
I want to thank all of our plant personnel for their efforts in getting things fixed. It has been a lot of work and the benefits have come not only in productivity but also in overall product quality and general ease of operation.
Most of our focus in both the U.S. and Canada over the past couple of months has been on opening up a channel that is new and exciting for us: health foods. As the majority of our products are healthful and our product development efforts are concentrated on natural, GMO-free offerings, it is probably past the time that we jump into the health foods arena with purpose.
We have for several months been exploring cost-effective ways to expand distribution beyond our traditional convenience, grocery and mass-merchandiser outlets. Although it is a fast growing segment, when compared to traditional grocery, the route to market for health foods is significantly more complex and less established.
For Leading Brands, this means building a whole new set of relationships to supplement those we presently sell through. A product like Soy2O™ is a natural lead into that arena. It also puts our moving on from the Little Debbie’s® snack cake business in some perspective, particularly in light of the recent ‘high carb backlash’ experienced by many doughnut and pasta producers. With that in mind, one of our fall initiatives will focus on our substantial cracker business, highlighting those products as ‘lower carb alternatives’ to traditional breads and bakery products.
On another note, we have been extremely impressed by the sell through of our traditional TREK® package at Costco Canada and are looking for ways to expand on that success. Our new TREK® 946ml (32 oz) package is now in stores across Western Canada. We have also introduced Soy2O™ in a wide variety of convenience chains across Canada. In the US we continue to focus on our key markets, assuring that brand awareness is built in a sustainable and intelligent way.
We are also considering international markets for TREK® and Soy2O™. Those are the two brands in respect of which we most consistently receive inquiries about distribution abroad. Our likely targets are select markets in South East Asia and Europe.
Product development continues across a broad front of natural carbonated and non-carbonated beverages; ones that will allow us to capitalize on our plant investments and properly exploit our Integrated Distribution System (IDS).
Pray for a hot summer!
Thank you for your continued support.
LEADING BRANDS, INC.
Ralph D. McRae
Chairman & CEO
Certain information contained in this press release includes forward-looking statements. Words such as “believe”, “expect,” “will,” or comparable terms, are intended to identify forward-looking statements concerning the Company’s expectations, beliefs, intentions, plans, objectives, future events or performance and other developments. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. Such statements speak only as of the date hereof. Important factors that could cause actual results to differ materially from the Company’s estimations and projections are disclosed in the Company’s securities filings and include, but are not limited to, the following: general economic conditions, weather conditions, changing beverage consumption trends, pricing, availability of raw materials, economic uncertainties (including currency exchange rates), government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other risk factors described from time to time in securities reports filed by Leading Brands, Inc.