Heinz Expands Its U.S. Foodservice Business with Strategic Acquisition

Heinz Expands Its U.S. Foodservice Business with Strategic Acquisition of Appetizers And, Inc.

    Business Editors

    PITTSBURGH--(BUSINESS WIRE)--March 22, 2005--

Acquisition Complements Company's Frozen Brands And Expands Premium Quality, Culinary-Focused Segment
    H.J. Heinz Company (NYSE:HNZ) today announced that its Foodservice Division has acquired Chicago-based Appetizers And, Inc. (AAI), a manufacturer and marketer of high-quality, upscale frozen hors d'oeuvres sold almost exclusively to the foodservice industry. Terms of the acquisition were not released.
    "Appetizers And, Inc. complements our successful foodservice acquisition and growth strategy, and we are pleased to welcome it to Heinz," said Heinz Chairman, President and CEO William R. Johnson. "Our growing Foodservice businesses provide premium condiments, sauces, soups, appetizers and desserts to all areas of our customers' menus. The upscale hors d'oeuvres segment of the foodservice industry is part of a $1.5 billion category that is growing at above-average rates, and we believe AAI offers the highest quality and greatest number of options available for targeted customers."
    "Through AAI, we will add a premier line of hors d'oeuvres to our already strong portfolio of brands and products," said Jeffrey P. Berger, Heinz Foodservice President. "As has been the case with previous Foodservice acquisitions, AAI's complementary product line will provide yet another avenue for us to better serve customers focused on serving patrons only the highest quality menu options."
    AAI founders, Patricia Domanik and George King, commented, "We've been cooking for America for 37 years, and when it came time to seek a strategic partner, we chose Heinz. Its vision of quality foodservice inspires us, and we believe our products and people will be in good hands."
    Heinz's Foodservice Division, which represents approximately 42 percent of Heinz North America's overall sales, markets branded and customized products to national commercial and non-commercial food outlets and distributors. AAI brings to the Heinz Foodservice team an experienced, direct sales force that has nurtured a strong customer base and is committed to "solution selling." In addition, AAI has a long-standing reputation for creating and manufacturing its hors d'oeuvres with culinary expertise and flair.
    "Heinz Foodservice is proud to add AAI to our portfolio. We are extremely confident that the business will provide immediate and long-term growth opportunities for us," Berger said. "Together, we will expand the Heinz Foodservice frozen distribution network, as well as continue our focus on customer service. At the same time, we will be able to leverage purchasing and logistics capabilities within our frozen businesses."
    Comprising the Heinz Foodservice frozen portfolio are Chef Francisco, the leading brand of frozen soup in the foodservice industry; Quality Chef, a fast-growing brand of ready-to-heat-and-serve soups and entrees; Todds of Irvine, Calif., and Scottsdale, Ariz., which produces fresh-ingredient soups, sauces and dressings; Seattle's Truesoups, acquired in 2003, which produces premium frozen bagged soups; Delimex of San Diego, Calif., a producer of Hispanic appetizers and side items; Domani brand pasta; and our premium frozen dessert businesses Alden Merrell of Newburyport, Mass., and Dianne's Gourmet Desserts of Le Center, Minn.
    AAI was founded in Chicago in 1967 and has grown into a national leader in its growing segment, serving as preferred or primary provider of frozen hors d'oeuvres and frozen canapes to leading hotel and foodservice customers. AAI employs 550 full-time and 60 temporary employees. Lincoln Partners LLC, a Chicago-based investment bank with expertise in food products and the foodservice industry, represented AAI in the transaction.

    SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS:

    This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect management's view of future events and financial performance. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which may be beyond Heinz's control and could cause actual results to differ materially from those expressed or implied in these forward-looking statements. Uncertainties contained in such statements include, but are not limited to, sales, earnings, and volume growth, general economic, political, and industry conditions, competitive conditions, which affect, among other things, customer preferences and the pricing of products, production, energy and raw material costs, the need for product recalls, the ability to maintain favorable supplier relationships, achieving cost savings programs and gross margins, currency valuations and interest rate fluctuations, success of acquisitions, joint ventures, and divestitures, new product and packaging innovations, product mix, the effectiveness of advertising, marketing, and promotional programs, supply chain efficiency and cash flow initiatives, the impact of e-commerce and e-procurement, risks inherent in litigation (including the Remedia-related claims in Israel and rights against third parties) and international operations, particularly the performance of business in hyperinflationary environments, changes in estimates in critical accounting judgments and other laws and regulations, including tax laws, the success of tax-planning strategies, the possibility of increased pension expense and contributions and other people-related costs, the possibility of an impairment in Heinz's investments, and other factors described in "Cautionary Statement Relevant to Forward-Looking Information" in the Company's Form 10-K for the fiscal year ended April 28, 2004, and the Company's subsequent filings with the Securities and Exchange Commission. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the securities laws.

    ABOUT HEINZ: H.J. Heinz Company, offering "Good Food Every Day,"(TM) is one of the world's leading marketers and producers of branded foods in ketchup, condiments, sauces, meals, soups, seafood, snacks, and infant foods. Heinz satisfies hungry consumers in every outlet, from supermarkets, to restaurants to convenience stores and kiosks. Heinz is a global family of leading brands, including Heinz(R) Ketchup, Sauces, Soups, Beans, Pasta and Infant Foods (representing nearly one-third of total sales or close to $3 billion), Ore-Ida(R) french fries, Boston Market(R) and SmartOnes(R) meals, and Plasmon(R) baby food. Heinz's 50 companies have number-one or number- two brands in 200 countries, showcased by Heinz(R) Ketchup, the world's favorite ketchup(TM). Information on Heinz is available at www.heinz.com/news.

    ABOUT HEINZ FOODSERVICE: Heinz Foodservice is the leading manufacturer of condiments for the foodservice industry. In addition to America's Favorite Ketchup(TM), the Heinz Foodservice product line includes a wide array of condiments, sauces, canned soups, tomato products, frozen desserts and appetizers, vinegar and pickles. Heinz Foodservice also is the manufacturer of Truesoups, Todds, Chef Francisco Soups(R) and Quality Chef Soups and entrees, as well as Domani Italian Foods(R). Heinz Foodservice is the sales and marketing agent for Equal(R) Sweetener.

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CONTACT: H.J. Heinz Company Media: Ted Smyth, 412-456-5780 Debbie Foster, 412-456-5778 Pam Wigley, 412-456-5915 or Investors: Jack Runkel, 412-456-6034

KEYWORD: PENNSYLVANIA ILLINOIS INDUSTRY KEYWORD: SUPERMARKETS FOODS/BEVERAGES RETAIL MERGERS/ACQ SOURCE: H.J. Heinz Company

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