- Bakkavör Group enters the US market with acquisition of Californian fresh prepared foods provider

Reykjavik, 31 January 2008. Bakkavör Group has acquired a Californian fresh and
frozen prepared foods provider, Two Chefs on a Roll. The company specialises in
the manufacturing of bakery products, sauces, soups and savoury dips for the US
retail and foodservice markets. The consideration price remains confidential. 

The company was founded by two chefs, Lori Daniel and Eliot Swartz, in 1985 and
they have developed the business from a small wholesale dessert company to a
full range manufacturer of custom and private label savoury and bakery
products, employing around 350 people. Two Chefs on a Roll is based in a modern
factory in Carson, Los Angeles, and has just opened a small facility in Jessup,
Pennsylvania. The company's turnover in 2007 was US$38.6 million. 

Two Chefs on a Roll will be consolidated into Bakkavör Group from the
acquisition date. The development of Bakkavör Group's business in the USA is a
long-term project that will require considerable investment going forward. 
 
Appointment of President of Bakkavör USA

To develop the Group's fresh prepared foods business in the United States,
Bakkavör Group has established a new subsidiary, Bakkavör USA, and appointed
Mr. John Dutton as President. Mr. Dutton has extensive experience from the
fresh prepared foods industry in Europe, having managed and built up a number
of businesses over the past 25 years in the UK and across Europe. Following a
successful career at some of the key fresh prepared foods companies in the UK,
Mr. Dutton served as Managing Director and a member of the Board of Directors
of Geest PLC for 11 years before establishing his own business, Rannoch Foods,
in 2002. Bakkavör acquired part of the Rannoch Foods business in 2007 with the
acquisition of Exotic Farm Produce. 

The US Fresh Prepared Foods Market - a Wealth of Opportunities

The US retail market for fresh prepared foods (which includes both deli
counters and pre-packaged foods) is estimated to be worth over US$20 billion*
and is growing by 4.5% year on year. The market is forecast to grow to US$28.5
billion by 2012 with average annual increases of 7%*. As in the UK, US
consumers are looking for greater convenience, higher quality and better
nutrition, all at a reasonable price. As US consumers work hard to balance
convenience demands with health concerns, interest in fresh foods is growing
fast and we predict that opportunities for growth are strong. 

*Source: Packaged Facts


Ágúst Gudmundsson CEO of Bakkavör Group, said:

“We are pleased to announce our entry into the US market with an acquisition of
an innovative fresh prepared foods business that provides a good strategic fit
within the Group. Two Chefs on a Roll is a well-run business, with a strong
management team, and gives us a good opportunity to start developing our
business in the USA. We are pleased that Mr. John Dutton, who has a profound
knowledge and experience of the fresh prepared foods market in Europe, decided
to re-join the Group and lead Bakkavör Group's development in the US.” 

 
Further Information:

Ágúst Gudmundsson, CEO
Tel: +354 550 9700

Hildur Árnadóttir, CFO
Tel: +354 550 9706

Ásdís Pétursdóttir, IR
Tel: +354 858 9715


About Bakkavör Group

Bakkavör Group is a leading international food manufacturing company
specialising in fresh prepared foods and produce. The Group operates 57
factories and employs around 20,000 people in nine countries. The Group's Head
Office is in Reykjavík, Iceland, and the business is listed on the OMX Nordic
Exchange in Iceland (www.omxgroup.com/nordicexchange Ticker: BAKK). 

The Group's vision is to be recognised and respected as the world's leading
fresh prepared foods and produce provider. Bakkavör Group has attained leading
market positions in its key market areas. In total, the Group makes over 4,700
products in 17 product categories, which are developed and sold predominantly
under its customers' own brands. In addition to the UK and Iceland, the Group
also has business operations in France, Belgium, Spain, South Africa, China,
the Czech Republic and the USA. 


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