Spectrum Organic Products' Flax Initiative Plans to Save Family Farms in Iowa; State-of-the Art Plant to Open in Farming Heartland Next Week

PETALUMA, Calif.--()--Oct. 11, 2004--The nation's leading organic culinary oil and essential fatty acid (EFA) dietary supplement manufacturer, Spectrum Organic Products Inc. (OTCBB: SPOP), today announced a major commitment to and investment in a new Iowa-based future in flaxseed farming and processing. Spectrum will be opening what the company believes is the world's largest production facility dedicated to organic, plant-based EFA oils, in partnership with BIOWA Nutraceuticals, an Iowa-based company owned by Mark and Julie Schuett.

It's a classic "back-to-the-future" business scenario with flaxseed formerly a top crop in Iowa five generations ago. Today, a handful of farmers are growing flax again due to successful organic agricultural research trials conducted at Iowa State University last spring. But that statistic will catapult over the next decade to hundreds of Midwestern farms growing flax organically if Spectrum's plan for regionalized flax production is achieved.

"We view this as a perfect marriage of agriculture and manufacturing," Neil Blomquist, CEO/president of Spectrum, said. "We're Californians partnering with native Iowan farmers and businesspeople. We all ardently believe this investment is planting a new sustainable economy for the future."

By relocating the company's 15-year-old processing operations to the Midwest, Spectrum intends to pay an estimated 50 percent premium to flax farmers who convert to certified organic practices.

The new $4 million, 10,000-square-foot plant opens Tuesday, Oct. 12, after a ribbon-cutting ceremony featuring keynote speaker Iowa Lieutenant Governor Sally Pederson.

"Governor Vilsack and I have worked throughout our time in office to promote additional opportunities for value-added agriculture in Iowa as a way to boost incomes for Iowa farmers and to strengthen Iowa's rural communities," Pederson said. "This new investment from Spectrum Organic Products supports a special niche in Iowa agriculture that has been identified as having strong potential to grow."

Moving the production facility to the Midwest will enable Spectrum and BIOWA Nutraceuticals to work directly with local farmers, including partnering test plots for new flaxseed varieties.

It also means Spectrum can now meet the growing demand for its line of more than 20 certified organic flaxseed oil-based products sold nationally at Whole Foods Markets, Wild Oats Markets and other natural and specialty product retailers. The new plant, certified organic by Quality Assurance International according to strict USDA standards, will have capacity to produce 60 tons of flax per day with the ability to expand to 120 tons per day.

Iowa is one of the top five organic research states in the country, according to Organic Farming Research Foundation's (OFRF) "State of the States" 2001 report, with Iowa State University taking a lead in organic agricultural research and education. Iowa boasts 402 certified organic farms representing sales of $13.3 million and more than 79,000 organic acres, according to the 2002 USDA Census of Agriculture and OFRF.

Bob Scowcroft, executive director of OFRF, will attend Tuesday's ribbon-cutting ceremony to accept a $5,000 contribution from Spectrum to support further farm-based research on organic practices. "More organic research means better organic farmers," Scowcroft said. "Building an organic infrastructure translates into added value for farmers and keeps organic jobs at home."

Most flaxseed today is purchased out of Canada or offshore, creating a fossil fuel-dependent distribution system. Spectrum and BIOwa believe their Midwest-based operation will reduce transportation time and costs, making for both an environmental and economic win-win.

"'State of the art' is an abused term in manufacturing today, but this plant more than lives up to this claim in the realm of plant-based oil processing," said Mark Schuett, president of BIOwa Nutraceuticals. Schuett, who is also an electrical engineer, oversaw construction of the new plant from start to finish.

Spectrum Organic Products Inc. (OTCBB: SPOP), the leading manufacturer and marketer of organic and natural oils and condiments in North America, was founded in 1986 by Jethren Phillips. Today, the company sells more than 175 products under the Spectrum Naturals(R) and Spectrum Essentials(R) brands, as well as industrial sizes of oils and condiments through its Spectrum Ingredients(R) division.

"Safe Harbor" Statements under the Private Securities Act of 1995: The statements contained in this release, which are not historical facts, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by the forward-looking statements. These risks are described in SPOP's Securities and Exchange Commission filings.

Contacts

Fresh Ideas Group for Spectrum Organic Products Inc.
Jennifer Rudolf, 303-449-2108, ext. 21
jennifer@freshideasgroup.com

Contacts

Fresh Ideas Group for Spectrum Organic Products Inc.
Jennifer Rudolf, 303-449-2108, ext. 21
jennifer@freshideasgroup.com