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