Diamond Foods Achieves Record Snack Sales

SAN FRANCISCO--([ BUSINESS WIRE ])--[ Diamond Foods, Inc. ] (NASDAQ:DMND), a leading branded food company specializing in processing, marketing and distributing culinary nuts and snack products, announced today that its initiatives to improve the distribution of core snack items in the grocery channel, gain new snack distribution outside grocery, and reinvigorate growth in the microwave popcorn category have resulted in the achievement of three key milestones during the current quarter.

In grocery stores, sales of Emerald snacks grew 22 percent for the four-weeks ended November 29, 2008 and surpassed $5 million, the highest one-month total since the brand's introduction in 2004. This resulted in a market share gain of 120 basis points to 6.5 percent. Since the Company's mid-September acquisition of the Pop Secret microwave popcorn brand, Pop Secret sales have grown 7 percent over the prior year period and the brand's market share is now 24 percent.

In the non-scanning value channel, Emerald's new line of 100-Calorie portion control products will reach national distribution levels just four months after being introduced to the market. This is a result of being authorized for inclusion in the snack aisle at an important mass merchandise account beginning in January, 2009.

Lastly, Emerald has improved its penetration in the non-food channel. Emerald snacks, including its Glazed Walnuts and Almonds, Deluxe Mixed Nuts and Smoked Almonds, can now be purchased on board three major U.S. airlines, as well as a number of highly visible retail shops located in airport terminals.

"We are very encouraged by the growth of our snack business as we approach the half-way point of our fiscal year," said Michael Mendes, President and CEO. "We continue to strengthen the quality of distribution, and introduce innovative, high quality products and packaging in order to attract consumers to the category. We are also well-positioned with regard to the current economic climate and are successfully reaching consumers in more value-oriented channels where they are shopping more frequently."

Note regarding forward-looking statements

This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including projections of Diamond's results. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Actual results could differ materially from projections made in this release. Some factors that could cause actual results to differ from our expectations include risks of integrating acquired businesses and entering markets in which we have limited experience, availability and pricing of raw materials, loss of key customers and an increase in competition. A more extensive list of factors that could materially affect our results can be found in Diamond's periodic filings with the Securities and Exchange Commission. They are available publicly and on request from Diamond's investor relations department.

About Diamond

Diamond is a leading branded food company specializing in processing, marketing and distributing culinary nuts and snack products under the Diamond^®, Emerald^® and Pop Secret^® brands.

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