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CONTACT: Ralph D. McRae
Chairman and CEO
Leading Brands, Inc.
Toll Free: 1-800-729-2746 ext. 238
[email protected]


VANCOUVER, CANADA, December 13, 1999 LEADING BRANDS, INC. (NASDAQ:LBIX), Canada's largest independent, fully integrated brand management company, is pleased to announce that it has acquired, Inc., and with it the domain name , for a combination of cash, stock and future consideration., Inc. will initially focus its business on the local delivery of name brand, non-perishable grocery and related products, purchased via a unique, easy to use web site. It is the Company's intention to roll out this service in major population centers across North America., Inc. will execute the fulfillment of its orders in conjunction with the established local delivery network of its parent company, Leading Brands, Inc., and other select distributors in the United States and Canada. The principal focus of the, Inc.'s future growth will be the United States.

The North American grocery market is approximately $500 Billion1. Non-perishable products account for approximately 90% of supermarket sales2. Concentrating on non-perishable products allows, Inc. to avoid the substantial costs associated with refrigerated storage and delivery and the higher spoilage costs associated with those types of products. Groceries are shopped for on a regular and frequent basis, thereby allowing, Inc. to more readily take advantage of buying patterns and habits established in its customers. According to Forrester Research, US online grocery purchases presently account for $150 million, or only 0.03% of the total market, which amount should increase to $4.5 billion US by 2003.

The vast majority of grocery and related items are not conducive to centralized delivery systems such as Fed-Ex™ or UPS™. They require local warehousing and delivery infrastructure for cost-effective handling., Inc. will provide this much needed real time local delivery direct to the customer, employing highly automated distribution centers and a city-by-city "hub and spoke" delivery system. Deliveries will be made within 24 hours of receipt of order, during a time window designated by the customer.

The Company believes that its fulfillment strategy is superior to that of other grocery e-tailers due to its ability to achieve higher profit margins through vertical integration and its access to an established and dedicated local delivery infrastructure. This is a proven model for the Company that is being extended to the Internet. The Company's competitors must instead rely upon expensive and ineffective third party couriers or invest in their own capital intensive dedicated warehousing and delivery systems., Inc. will also provide a venue for third party distributors to market and sell products to their retail customers, through the® portal. This service will allow those distributors to reduce their direct business-to-business sales costs. Additionally,, Inc. will offer its local delivery network to other e-tailers, on a fee for service basis, for the fulfillment of their local delivery needs.

Leading Brands Chairman and CEO Ralph D. McRae said: "The Internet opens an unparalleled opportunity to lever the power of national and regional brands., Inc. will not try to revolutionize the way that people shop - it will just make shopping much more convenient.

", Inc. will primarily sell packaged, non-perishable products. We believe that people will continue to shop for their fruits, vegetables, meats and bakery goods in their local stores, markets and delis: that's the fun part of shopping., Inc. will deliver the carton of cereal, the heavy case of soft drinks, the gallon jug of juice, the unwieldy box of disposable diapers, the 40 pound bag of dog food and literally thousands of other items that make shopping unpleasant.

"We have spent nearly a year analyzing other grocery e-commerce sites and services and believe that we have developed a unique system that will (1) be quick and easy for all consumers to use, regardless of their familiarity with the Internet (2) deliver popular name brand products at great prices and (3) provide significant returns to our investors.

"We are excited about the opportunities that, Inc. will lend to our existing brand partners and major retail customers. This venture will allow them to lever their products and services via the Internet and it is our goal to partner with them to that end.

"Perhaps most importantly,, Inc.'s business plan is built upon a conventional economic model where profits are achievable once a minimum volume threshold is reached. By employing an existing, functioning delivery system, most of our costs are variable, avoiding the need for extensive up-front capital for infrastructure. We can therefore focus our attention on marketing, technology and maintaining the highest levels of service., Inc. will at the same time be separately managed so as not to distract Leading Brands, Inc. from its growing integrated brand management strategy.

"For now, however, we believe that we have acquired a truly world-class domain name; one that simply and clearly describes our service and is easy to remember and access. We plan to move forward quickly, with the roll out scheduled to commence during the second quarter of 2000."®: Just try to forget our name!

1. Source: Bear, Stearns & Co. Inc., Equity Research
2. Source: Progressive Grocer is a registered trademark of, Inc.
Statements in this news release that are not historical are to be regarded as forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties with respect to the Company's business include general economic conditions, competition, the ability of the Company to raise financing, weather conditions, changing consumption trends, pricing and the availability of products and raw materials and economic uncertainties, including currency.