Landec Corporation (Nasdaq: LNDC) announced today that the successful results of its banana and plantain Intellipac(TM) system shipping trials could lead to the commercialization of new specialty packaged products over the next twelve months.

The company is conducting shipping trials to apply its membrane technology for the packaging of bananas. The banana market is estimated to be over $4 billion worldwide. Bananas contribute approximately 9 percent of produce department sales in the United States, with consumption in excess of 28 pounds per person per year. This technology is intended to increase the shelf life of bananas, the number one item in the produce department of food retailers.

The company is testing bananas and plantains using the company’s proprietary Intellipac breathable membrane packaging. Intellipac packages extend produce shelf life by controlling the internal atmosphere of a package to optimally fit the respiration requirements of living produce. The breathable membranes are based on the company’s proprietary Intelimer® technology that can be customized to provide packaging with optimal oxygen and carbon dioxide levels for preserving perishable produce, even when exposed to changes in temperature experienced during distribution.

Landec has recently completed the development of an Intellipac package that will extend the life of bananas that are shipped green and later ripened just before distribution. Initial commercial shipping trials of case-quantity green bananas have been completed by the company. Results show that Intellipac packaging increased the life of green bananas and reduced product loss. Based on recent shipping trials conducted by the company, 13 percent of the green bananas shipped to Asia using conventional methods were thrown away upon arrival because of unacceptable quality, whereas, all of the green bananas shipped in Intellipac packaging were of acceptable quality.

In addition, the company has completed initial trials which indicate that Intellipac packaging can extend the shelf life of yellow bananas at the prime color stage desired by retailers. Preliminary laboratory results have shown that bananas can be held at the ideal color stage for marketability for up to 5-10 days versus 2-3 days for yellow bananas packed by the conventional method. Extending the shelf life at the ideal ripeness stage reduces the product loss to the retailer. Recent market studies have shown that retailers who display bananas at optimum ripeness experienced substantially increased sales.

The company also has completed the development and testing of an Intellipac package to extend the shelf life of case-quantity plantains. Imports of this specialty fruit into the United States are approximately $100 million annually. Shipping trials with the number one importer of plantains into the United States have shown that the Intellipac technology can substantially extend the shelf life of plantains, thereby significantly reducing product loss to both the shipper and retailer. As a result of these successful trials, the company received its first order for Intellipac packaging for plantains in July.

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“Based upon our initial shipping trial results, the potential implications of our Intellipac packaging could be substantial for changing the cost structure and consumer demand of what is now a commodity business,” noted Gary T. Steele, Landec chairman and chief executive officer. “The benefits of the application start with the growers and add value completely through the distribution channel to the consumer in the grocery store. We look forward to advancing the validation of our technology,” he added.

Landec Corporation designs, develops, manufactures and sells temperature-activated and other specialty polymer products for a variety of food, agricultural and licensed partner applications. The company’s temperature-activated polymer products are based on its proprietary Intelimer polymers which differ from other polymers in that they can be customized to abruptly change their physical characteristics when heated or cooled through a pre-set temperature switch.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the integration of Apio, the timing and expenses associated with expanding operations, the uncertainty related to the integration of other new business acquisitions, the amount and timing of research and development funding and license fees from the company’s collaborative partners, the timing of regulatory approvals and new product introductions, the mix between pilot production of new products and full-scale manufacturing of existing products, the mix between domestic and international sales, and the risk factors listed in the company’s Form 10-K for the 1999 fiscal year. (See item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.) As a result of these and other factors, the company expects to continue to experience significant fluctuations in quarterly operating results, and there can be no assurance that the company will become or remain consistently profitable.