Kraft Canada [MO] has sold its Swiss Water® Decaffeinated division to a newly formed company, the Swiss Water Decaffeinated Coffee Company, Inc.

The new concern's capital partners are comprised of the senior management team with support from Tricor Pacific Capital of Vancouver, BC and TriWest Capital of Calgary, Alberta. The transaction closed May 31, 2000 at which time the new company acquired all of the assets of Kraft Canada's Swiss Water operation including the patented Swiss Water decaffeination process, the well-known trademark and the state-of-the-art decaffeination facility in Burnaby, BC, a suburb of Vancouver. "There is tremendous potential for the Swiss Water brand and for the business. The best way to maximize that value is to operate it as a well-capitalized, stand alone operation focussed solely on producing the highest quality, best tasting decaffeinated coffee possible." Said Frank Dennis, Swiss Water Decaffeinated Coffee Company's new Chief Executive Officer.

Swiss Water decaffeinated coffees are sold by roasters of fine specialty coffees throughout North America. Purveyors of Swiss Water brand coffees include Starbucks Coffee Company [SBUX], The Second Cup [SKL.TO], Diedrich's Coffee [DDRX] and Gloria Jean's Coffees (owned by Diedrich's Coffee).

Kraft Canada sold the Swiss Water decaffeination plant, the Swiss Water trademark and the patented process not because of financial performance, which consistently met growth projections, but to enable Kraft to focus on its core business of marketing roast and ground coffee and other grocery products. "What Kraft Canada does, and they do it extremely well, is market branded consumer food products to the retail grocery and mass merchant markets," noted Dennis, formerly the Managing Director of the Swiss Water division for Kraft Canada. "As a stand alone operation," Dennis noted, "We will be able to much more effectively address the unique specialty coffee marketing channel we occupy, selling a branded decaffeinated coffee to specialty roasters throughout North America, Great Britain, Europe and the Far East."

Kraft Canada acquired the Swiss Water trademark, patented process and decaffeination plant in 1993 when it purchased the then independently owned Nabob Coffee Company of Vancouver, Canada.

In addition to Mr. Dennis, the key management team will include Jeff MacVicar, Plant Manager and Jeff Belford, Chief Financial Officer. No jobs were lost as a result of the deal, and it is anticipated that new jobs will be added as the new company grows. All Kraft Canada employees staying with Kraft Canada will be reassigned. The Vancouver facility, operated by an expert and cohesive team with remarkably little turnover for over ten years, will become the new company's headquarters. All employees at the Vancouver facility will be joining the new company. Jeff MacVicar was enthusiastic about the new challenges facing him, "While we certainly enjoyed many benefits being associated with Kraft Canada, we believe that we are now poised to fully maximize the value of the Swiss Water trademark, patented process and decaffeination facilities located here in Vancouver."

Frank Dennis summed up the change as follows, "The specialty sector of the coffee market is its most vibrant. Within this segment the Swiss Water brand holds a solid position in terms of market share, brand awareness and perceived quality. We anticipate increasing these advantages as we operate a sound business known for the quality of its product and its professional operation."