Functional Technologies Corp.
TSX VENTURE : FEB

Functional Technologies Corp.

April 26, 2011 07:00 ET

Beverage Supply Group Increases Orders for Functional Technologies' Hydrogen Sulphide-Preventing Wine Yeasts

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 26, 2011) - Functional Technologies Corp. (TSX VENTURE:FEB) (the "Company") today announced its subsidiary, Phyterra Inc., has renewed its distribution agreement with Beverage Supply Group (BSG), a division of Brewer's Supply Group. The agreement includes an increase of more than 350% in the minimum purchase volume of Phyterra™-branded hydrogen sulphide (H2S)-preventing wine yeast in the U.S. market for the upcoming 2011 crush. BSG's distribution strength in the U.S. is expected to complement the direct sales initiatives of the Company as it expands commercially not only in the U.S., but also in the larger European and South American markets.

"We are pleased to renew our distribution agreement with BSG, a technically focused wine industry supplier that has enhanced the evolution of Phyterra's H2S yeasts into commercial products by ensuring significant exposure and generating purchase interest in our wine yeasts," said Geoff Lee, Managing Director of Phyterra Yeast Inc. and Functional Technologies' Vice President of Business Development.

The amended agreement confirms the interest in and reflects the demand for Phyterra's H2S-preventing wine yeasts in the commercial winemaking sector, based on the success of initial sales in the introductory 2010 season. Given the encouraging marketplace response to the H2S-preventing yeasts, BSG's sales efforts over the past 10 months, and Phyterra's direct sales efforts, the Company anticipates significant product volume and revenue growth in the upcoming 2011 season. The original agreement signed in June 2010 facilitated the launch of four strains of Phyterra's H2S-preventing wine yeasts in the U.S. – primarily on the West Coast and in time for the 2010 crush – and resulted in sales to more than 75 commercial wineries.

"As we look toward significant volume and revenue growth in the coming seasons, BSG's distribution reach will leverage our own in-house sales initiatives and technical strengths," said Garth Greenham, Functional Technologies' President and COO.

"Beverage Supply Group prides itself on bringing innovation to the marketplace by offering technically superior products that add value to our customers' processes," said Dr. Ian Ward, President of BSG. "Phyterra's H2S- preventing wine yeasts provide an elegant solution to a longstanding issue for winemakers, and represent a significant step forward in fermentation technology. We were very pleased with the interest and sales generated by the Phyterra products in their introductory commercial season in the U.S. We look forward to capitalizing on this and increasing our sales in the upcoming 2011 winemaking season."

Hydrogen sulphide, a gas naturally emitted as a byproduct of wine fermentation, possesses a distinct, noxious rotten-egg smell and is a well-recognized, widespread industry problem. Functional Technologies' proprietary H2S-preventing yeast technology was exclusively licensed from the University of California at Davis, where its development was supported and funded by the American Vineyard Foundation and the broader commercial wine industry. Current solutions to H2S are primarily remedial, focused on the removing H2S after the wine has been tainted. This can be expensive and time-consuming, and can negatively affect product quality. The Phyterra™-branded H2S-preventing wine yeasts provide winemakers with a robust solution to prevent and reduce the sensory defects, as well as potential devaluation of wine, associated with the formation of H2S during fermentation. Use of H2S-preventing yeasts require no changes to existing fermentation processes, and impart no negative impacts to the sensory attributes desired by the winemaker.

Forward-Looking Statements

This news release contains forward-looking statements about the Functional Technologies Inc. and its future plans. Forward-looking statements are statements that are not historical facts, and in this news release include the statements regarding: (1) the extended and amended agreement with BSG that includes an increase in the minimum purchase volume of Phyterra's H2S-preventing wine yeasts to U.S.; (2) the Company's sales initiatives in the U.S., Europe and South America; (3) the Company's expectation for volume and revenue growth in the upcoming wine crush seasons; and (4) Phyterra wine yeasts providing a robust, preventative solution to the H2S problem. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. These risks, uncertainties and other factors include, without limitation, uncertainty as to the Company's ability to achieve the goals and satisfy the assumptions of management; uncertainty as to the demand for the Company's products and the Company's ability to meet such demand; and general economic factors and other factors that may be beyond the control of the Company. Forward-looking statements are based on the opinions and expectations of the Company's management at the time they are made, and the Company does not assume any obligation to update its forward-looking statements if those opinions or expectations, or other circumstances, should change. Reference to the section entitled "Risks and Uncertainties" commencing on page 15 of the Company's management's discussion and analysis relating to the fiscal quarter ended November 30, 2010, which is available on SEDAR at www.sedar.com.

About Beverage Supply Group

With over 75 years collective experience, Beverage Supply Group (BSG) is a leading supplier of ingredients and process aids to winemakers, committed to providing the highest quality products at competitive values, to the North American winemaking Industry. BSG, which opened in Napa 2007, is the wine division of Brewers Supply Group, the largest and most respected supplier of ingredients to the US brewing industry. For more information about BSG, please visit www.bsgwine.com.

About Functional Technologies Corp.

Functional Technologies develops and commercializes proprietary, advanced yeast-based solutions to significant challenges in the food, beverage and healthcare industries. The Company's platform improves the performance of innate yeast functions, and prevents the formation of naturally occurring toxins and contaminants that either affect final product quality or are classified by the World Health Organization (WHO) as probable human carcinogens. Functional Technologies' lead technologies include yeasts that prevent and reduce the formation of the foul-smelling hydrogen sulphide (H2S) and the carcinogens acrylamide and ethyl carbamate (more commonly known as urethane), by-products of food and beverage processing. These contaminants are found in many commonly consumed items, such as fermented food products and alcoholic beverages, and baked and fried foods. With a head office in Vancouver, Functional Technologies Corp. has R&D operations in Prince Edward Island and Europe, as well as a U.S. sales office in Napa Valley, California. For more information, please visit our website at www.functionaltechcorp.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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