Diamond Foods Announces Kettle Chips Plant Expansion in Salem, Oregon

Diamond Foods, Inc. (Nasdaq:DMND) today announced an $8.4 million planned expansion of its production facility in Salem, Oregon to meet increased demand for its Kettle Brand potato chips. More than 15 new jobs will be created, and production capacity will be increased by 25 percent. The expansion will facilitate broader distribution of Kettle products on the West Coast and in the Southwest, allowing Kettle's Beloit, Wisconsin facility to better serve Midwest and East Coast markets.

"Kettle Chips was founded in Salem, and Diamond Foods is proud to be able to expand its commitment to the community by investing over $8 million to create new jobs and better serve our customers and partners,"said Michael J. Mendes, Chairman, President and CEO. "Diamond Foods has a deep history of investing in our brands, plants, and supply chain to meet growing demand for our products, which has been foundational to our success."

"I am very pleased at the news that Kettle Foods - an Oregon-grown company - plans to expand its Salem operations,"said Oregon Governor Ted Kulongoski. "Diamond Food's commitment to Oregon, along with the assistance rendered by the Oregon Business Development Department, has proved to be a winning combination for all Oregonians."

Ground breaking is anticipated to take place in the third quarter of 2010 and completion is targeted for the second quarter of 2011. The Salem facility, which opened in 1999 and currently has over 180 production and distribution employees, produces approximately half of the nation's supply of the Kettle Brand product line, which includes potato chips, baked chips, Krinkle Cut chips, organic chips, tortilla chips, nuts and nut butters.

This project represents a successful public-private sector partnership between Diamond Foods and the State of Oregon, the Marion County Economic Development Commission, the City of Salem, and the Strategic Economic Development Corporation (SEDCOR) of Marion and Polk counties. In addition, the project was funded in part by Oregon State lottery funds administered by the Oregon Business Development Department.