Menlo Park, California
September 5, 2001
Landec Corporation (Nasdaq: LNDC), today announced its food
technology subsidiary, Apio, Inc., has successfully expanded
shipments of its iceless broccoli crowns product line
using Intellipac
specialty packaging into export markets.
In April of this year, Apio began trial commercial shipments of
its iceless broccoli crowns product line into export markets.
Since the trial launch began, the Company has been successfully
shipping iceless broccoli crowns using Intellipac specialty
packaging to Japan, one of the largest destination countries for
U.S. grown broccoli. Apio is now further expanding shipments of
its iceless broccoli product line to Japan and to other export
markets.
In November last year, Apio introduced and started shipping its
iceless broccoli crowns product line for U.S. markets. The
introduction marked a milestone for the Company. It was the
first whole produce item that utilized Landec's Intellipac
packaging technology. Intellipac specialty packaging is a sealed
case liner bag inside the shipping carton. This case liner
extends shelf life and maintains crispness without ice. The
proprietary packaging technology has a very high rate of gas
exchange, which results in the appropriate atmosphere for the
broccoli within the bag. The Company's monthly sales of iceless
broccoli crowns into U.S. markets have more than tripled since
shipments began in November 2000.
"The excellent growth in demand and shipments for our domestic
iceless broccoli crowns product line demonstrates the unique
advantages that Landec's Intellipac case liners create for whole
produce," said Nick Tompkins, Apio's Chief Executive Officer.
"We look forward to expanding the success of our case liner
technology to new export markets and anticipate this to be the
beginning of additional export products to come."
Both the U.S. market and the export market for broccoli are
significant and represent important opportunities for Apio.
Annual U.S. supermarket sales of broccoli are approximately $800
million, with U.S. grown broccoli for fresh markets totaling
approximately 1.9 billion pounds. Apio markets approximately 6%
of U.S. grown broccoli for fresh markets, or over 112 million
pounds a year.
Exports of U.S. grown broccoli in 1999, the last year for which
complete results are available from the Bureau of Census,
amounted to over 325 million pounds, or approximately 16 million
cartons of broccoli -- an increase of more than 70% from 1991.
In 1999, shipments of U.S. grown broccoli to Japan accounted for
approximately 30% of the U.S. exports of broccoli, totaling over
97 million pounds. Apio's market share of U.S. exports of
broccoli to Japan that year represented approximately 22%, or
over 21 million pounds.
A unique feature of Intellipac specialty packaging is its
ability to compensate for temperature abuse. As a result of the
temperature responsiveness of the Intellipac breathable
membrane, the optimal atmosphere inside the case liner is
maintained as temperatures change during the distribution
process. In addition to extending shelf life and maintaining
crispness, Intellipac specialty packaging also reduces
dehydration, discoloration and unpleasant odors and flavors
associated with broccoli by creating an ideal modified
atmosphere inside the package. The temperature responsiveness of
the Intellipac breathable membrane is one of the key reasons
whole broccoli crowns can be shipped long distances to export
markets, as well as to U.S. markets, without ice.
Equally important is that the Company's specialty packaging
reduces freight expense by eliminating the weight and space
consumed by ice. As a result, the export freight expense is
reduced by 33%. In the U.S. markets, Apio's iceless broccoli is
shipped with 72 cartons per pallet, 30%-50% more cartons per
pallet compared to the 48-56 cartons per pallet of broccoli
shipped with ice.
In addition to reducing the cost of freight, the removal of ice
from the distribution system offers additional benefits. The
Company's new packaging system eliminates the risk of ice as a
carrier of micro organisms that can potentially contaminate
produce and removes the need for expensive waxed cartons. In
exports to Japan, the elimination of ice precludes the need for
the traditional re-icing of broccoli in Styrofoam coolers used
to distribute the product throughout Japan, creating a savings
of up to three dollars per carton.
Landec is the major supplier of modified atmosphere packaging
for high respiring produce such as broccoli, cauliflower and
combinations of other vegetables. The Company has developed
numerous packages from twelve-ounce single meal portions, to
two-pound and three-pound packages, to party trays and now case
liners for whole vegetables for the retail, foodservice and
export markets.
Since 1996, Landec and Apio have commercially marketed products
that use Landec's Intellipac breathable membranes for Apio's Eat
Smart(TM) fresh-cut produce line of products. The product line
includes broccoli florets, broccoli slaw, broccoli and carrots,
broccoli and cauliflower, cauliflower florets, vegetable medley
and vegetable stir-fry. Intellipac packaging is also used on its
5.5 and 3.5 pound vegetable party trays and recently introduced
4.5 pound classic tray. During 2000, Apio packed approximately
59 million pounds of vegetables utilizing Intellipac specialty
packaging, an increase of 22% over 1999.
Company news release
N3773
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