DEAR FELLOW SHAREHOLDERS:
September was a very robust month. We continue to dramatically increase sales of branded products in both Canada and the United States.
Our recent listing of TrueBlue® in Safeway US now places that brand in two of the three largest supermarket chains in the country. TrueBlue® is now available in 33 out of 50 states and we are committed to bringing it to every major US market before the end of 2006. In totaling our confirmed listings, TrueBlue® is either on the shelf, or should soon be available, in almost 8,000 major grocery stores. That is quite an accomplishment in less than one year.
Another goal of ours is to introduce TrueBlue® into the school system. Why shouldn't our children be able to drink a healthy product without HFCS and with fewer calories with their lunches each day? California has just eliminated carbonated soft drinks from their secondary school system in a trend that will be very helpful to our products.
We are often asked by our shareholders if there is anything they might do to assist our cause. Many of them have initially been drawn to buy shares in our company because they first enjoyed one of our brands. Invariably we suggest that when they are shopping and don't see our products in a particular outlet to tell the store manager that they want them to carry one or more of our brands. Also, if you are in a store that carries only a few flavors of TrueBlue®, for example, ask the manager to bring in the other flavors. You can even go to www.trueblueberry.com and find a form there that you can print off, fill out and leave behind at your local grocery, asking them to list that brand. If there is a store in your hometown that you believe would be a good showcase for our products, please drop us a line at [email protected] and we will let our salespeople know. Some times we will be authorized in an account but haven't been able to physically get into the store to make sure the product is there, so every little bit helps a lot and we very much appreciate that kind of support.
I surely wasn't the only one riveted to the television over the past month watching the devastating effect of hurricanes Katrina and Rita on the Gulf Coast states. I have also watched as a stream of companies have used the impacts of those storms as explanations for rising costs and disruptions to their operations. We were very fortunate to be spared any direct hit from those tragic events, but the resultant impact they have had on energy prices brings home how pervasively most business – including ours - rely upon oil, natural gas and their derivatives. Virtually everything that we as a company do is somehow impacted by higher energy prices: inbound freight for raw materials, outbound freight for finished goods, plastic bottles and caps derived from oil, glass bottles that are formed under high heat and bottling plants driven by boilers fueled with natural gas. In some cases, these recent hurricanes have made it difficult for both us and our customers to even source bottles because of a shortage of petroleum resins and long haul trucks diverted to FEMA.
In the main, though, our brands are unique, providing us with greater pricing power than others who sell private label or lower margin commodity products. Our domestic Canadian business has been to a greater degree sheltered from that impact by the rising Canadian dollar (which today hit a 14 year high against the US dollar) as most of our raw materials are denominated in US currency. We are constantly reviewing our pricing structures to keep abreast of these increases and generally we are finding ourselves able to keep pace.
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.