Shareholder Newsletter

August 1, 2006 - Issue No. 33

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DEAR FELLOW SHAREHOLDERS:

LBIX MONTHLY NEWSLETTER

If you jump to the end of this newsletter you will see a copy of the approximately 8" x 11" ad and coupon for TrueBlue® that will shortly appear in the LA Times, San Francisco Chronicle, Orange County Register and soon thereafter, a couple of Fall editions of the los angeles magazine.  For those of you not residing in California, the coupon will, within a week or two, be available for you to print and use at grocery stores in your area on the www.trueblueberry.com website.  Enjoy!

It has been a pretty warm summer so far across North America and that bodes well for the beverage industry.  Our sales have remained strong with continuing new listings and impressive levels of repeat orders.

We have taken some time to add bench strength to our management team.  Next week Bill Franklin joins us as Senior Vice-President of Operations.  A professional engineer and MBA, Bill brings diverse and extensive experience in plant management and operations to our company.  That will allow Dave Read to focus his efforts on new business development and special projects.

The initial reception to TREK® Natural Sports Drinks and NITRO™ Energy Drinks has been very good.  There seems to be an unquenchable thirst for innovative energy drinks and TREK® has made a big splash in the health food channel.  More on that in the next newsletter.

I personally believe that Caesar® Cocktails are a real 'sleeper' brand for us.  There is no significant competition to Mott's Clamato® in the US in a brand category that is growing significantly, particularly in the southern states.  There are very few plants in North America with the capabilities to bottle this type of product and our Vancouver plant happens to be one of them.  On top of that, Caesar® simply tastes better.

We are also in the process of 're-branding' Soy₂o®.  We have a great product, with wonderful health benefits.  Because it hasn't caught fire with consumers we are going to make some adjustments to the formulation and name and I hope to have some more particular information for you by Labor Day.  Part of my reason for letting you know this now is to explain the ongoing process of brand development that we go through here at Leading Brands.  We want to make sure that our brands are unique and that they provide our customers and consumers with a great-tasting beverage incorporating marked and identifiable health benefits in a well-designed package at a reasonable price.  Please stay tuned.  I think you'll be impressed.

There will not be another newsletter until October 1, 2006.  I hope you all have a great balance of the Summer.  Our Q2 results should be released before the end of next month.

Thank you for your continued support.

Sincerely,
LEADING BRANDS, INC.

Per:

Ralph D. McRae
Chairman & CEO

Disclaimer:
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.