News | May 3, 2012

Functional Technologies Announces New Wine Yeast Strains, Features To Complement Portfolio

Vancouver, BC (MARKETWIRE) -- Functional Technologies Corp. /quotes/zigman/512758 CA:FEB -5.88% (the "Company") is pleased to announce today recent developments and initiatives to support growing customer enthusiasm and demand for the Company's proprietary hydrogen sulphide (H2S)-preventing wine yeasts. This includes the availability of new proprietary wine yeast strains that offer low levels of both H2S and sulphur dioxide (SO2), as well as technical and marketing programs with several leading non-profit institutions and/or alliances associated with the wine industry to further expand the Company's product offerings as well as enhance the support and adoption of its wine yeasts.

The Company's wine yeasts have gained substantial interest and demand in the U.S., Europe and South America since their commercial introduction two years ago, including a 240% increase in the number of commercial wineries purchasing these yeasts for trials. The Company's wine yeasts are marketed by its wholly owned subsidiaries Phyterra Yeast Inc. and Phyterra Europe GmbH (collectively "Phyterra"), with distribution in the U.S. facilitated by an exclusive partnership with the Beverage Supply Group ("BSG"). In Europe, Phyterra's wine yeasts are offered through various country-specific distributors, reflecting the segmented wine industry there.

Complementing the offerings of Phyterra's most popular strains, based on customer interest and requests, the Company has expanded its product portfolio with new innovations, primarily classically bred wine yeast strains that not only feature the low H2S attribute, but also low levels of total SO2. Under certain conditions, excessive levels of SO2, which can form also as a byproduct of wine fermentation, can cause sensory faults. These next generation wine yeasts are expected to be available for the 2012 fall wine production season.

"We are pleased to be able to build on the positive customer feedback that we and our distributors have received on our proprietary H2S-preventing wine yeasts, by offering an expanded portfolio of wine yeast products enabling winemakers to select their preference of low H2S or both low H2S and low SO2 wine yeasts that are best suited to their winemaking practices," said Howard Louie, Chief Business Development Officer of Functional Technologies. "These and other industry-supported strategies are expected to not only enhance customer benefits and satisfaction, and drive adoption of our innovative next generation wine yeasts, but also elevate the value of our yeast platforms."

Supporting the initiatives to expand the Company's platform and product portfolio of innovative wine yeasts, technical and marketing programs have been launched, or are in discussions to begin, with several leading academic institutions and/or industry groups associated with the wine sector in the U.S. and Europe. This includes the University of California at Davis ("UC Davis"), a leading viticulture and enology institution that is also home to the Robert Mondavi Institute ("RMI") for Wine and Food Science. A collaboration agreement with UC Davis has commenced to complement the Company's internal strain development and breeding programs, and is expected to enable more efficient and rapid expansion of Phyterra's portfolio of wine yeasts, resulting in a broad selection of wine yeast strains. In addition, the collaboration includes technical initiatives to optimize the quality and customer support of the Company's expanded portfolio, and as well, provide valuable access to UC Davis' renowned expertise.

"I am pleased at the widespread interest in these strains and in the low H2S technology that we have developed. One goal of our strategy was to be able to breed this capability into varying genetic backgrounds to provide an array of options for the wine industry," commented Dr. Linda Bisson, Professor at UC Davis' Viticulture and Enology Department.

From marketing perspectives, additional strategies including branding initiatives supported by industry validation of the benefits offered by Phyterra's wine yeasts, as well as both volume and premium pricing structures, are in various stages of implementation, with the support of BSG and its vast industry network and alliances.

"The innovative and beneficial qualities associated with Functional Technologies' H2S-preventing wine yeasts make a great fit for Beverage Supply Group's mandate to offer novel and technically superior products that improve our customer's processes, as evidenced by the interest, positive customer feedback and sales generated by these yeasts in the U.S. in the first two introductory commercial seasons," said Dr. Ian Ward, President of BSG. "We look forward to continuing our work with Functional Technologies in offering greater product selection, support and value to our existing and new customers with the Company's expanded portfolio of yeast strains."

About Hydrogen-Sulphide (H2S) and Sulphur Dioxide (SO2)
H2S is a gaseous byproduct naturally emitted during wine fermentation, and is associated with a distinct rotten-egg odour. A well-recognized and widespread industry problem, H2S is also implicated in the formation of other undesirable sulphur-containing compounds that can cause sensory faults and reduce the quality of the wine product. Even very low levels of H2S are indicated to mask desirable sensory attributes sought by winemakers. The Company's H2S-preventing wine yeasts feature a proprietary attribute of preventing the formation of H2S in the fermentation phase, and represent a robust preventative solution requiring minimal or no changes to existing production processes.

Although SO2 is commonly used as an additive in winemaking practices as both an antimicrobial and protective, antioxidant agent, it can also form as a natural byproduct of yeast during fermentation. Under certain conditions and instances, excessive levels of SO2 can impede normal fermentation processes or lead to sensory faults. The new classically bred wine yeasts offering the dual features of low H2S and low SO2 have been cultivated by Phyterra's scientists and technical team to provide winemakers with added options and benefits, based on customer demand.

Forward-Looking Information

This news release contains forward-looking information (within the meaning of Canadian securities legislation) about Functional Technologies Inc. and its future plans. Forward-looking information relate to future events or future performance and reflect management's expectations or beliefs regarding future events rather than historical facts, and in this news release include the statements (the "forward-looking statements") regarding: (1) the ability for the Company's expanded product portfolio and program initiatives to drive adoption of its wine yeasts; (2) the expectation that the Company's products and initiatives will continue to drive customer satisfaction, sales growth and value in the Company's technology platform; and (3) the expectation that the Company's collaborations will enable more efficient and rapid expansion of the Company's portfolio of wine yeast strains, including the availability of new yeast strains this fall production season. 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 16 of the Company's management's discussion and analysis relating to the fiscal quarter ended February 29, 2012, which is available on SEDAR at .

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 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. For more information, please visit our website at .

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.

SOURCE: Functional Technologies Corp.