Protein Value Chain

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Passionate PeoplePassionate about Food

MAPLE LEAF FOODS ANNUAL REPORT 2004

MAPLE LEAF FOODS INC.

30 St. Clair Avenue West, Suite 1500

Toronto, Ontario, Canada M4V 3A2

www.mapleleaf.com

Printed in Canada

Operations Overview

For detailed information on these operations, visit www.mapleleaf.com

Consumer FoodsBranded, pre-cooked prepared meat products includingbacon, ham, wieners, fully cooked roasts, deli andcanned meats

Plants: 10

Schneider FoodsBranded, pre-cooked, prepared meat and grocery products, including bacon, wieners, ham, single serveentrées and “hand-held” meat and pastry products

Plants:15, Distribution Centres: 4

Pork Primary processing of fresh, frozen and value-addedpork products, including Maple Leaf MedallionNaturally™ branded pork

Plants: 6

Poultry Primary processing of fresh and value-added chickenand turkey products, including Maple Leaf PrimeNaturally™ branded chicken

Plants: 5, Hatcheries: 3

RothsayRendering of animal by-products into value-addedproducts including animal feed, amino acid supplements, alternative fuel and many industrial uses

Plants: 6

Landmark Feeds Inc.Animal nutrition programs including swine, dairy andbeef cattle, and poultry

Feed Mills: 9

Shur-Gain Animal nutrition programs including Shur-Gain brandedswine, dairy and beef cattle, poultry, aquaculture,equine and pet food

Feed Mills: 12, Hatcheries: 3, Research Facilities: 3,Retail Sales Centres: 10

Elite Swine Inc.Hog production and management services includingswine genetics

Fresh BakeryProduction and distribution of fresh baked breads, rolls,bagels, artisan breads and sweet goods including theleading Dempster’s® brand, and fresh pasta and saucesunder the Olivieri® brand

Plants: 24, Distribution Centres: 23

Frozen BakeryProduction and distribution of frozen par-baked andFroBake® bread, rolls and bagels including the New YorkBagel™ brand, and specialty breads

Plants: 11

Protein Value Chain

Bakery Products Group

InternationalGlobal marketing, distribution and trading, includingpork products, seafood, grain and soy products, pre-cooked meat and poultry products, french fries,bakery products and pet food

Plants: 2, Trading Offices: 8

ANNUAL REPORT 2004 1

Maple Leaf Foods is Canada’s leading food processor, exporting to over 80 countries around the world.

Supported by our flagship consumer brands – Maple Leaf®, Schneiders® and Dempster’s® – and a family of

strong regional brands, we are market leaders across our businesses. In the farming community, our Shur-Gain

and Landmark brands are synonymous with excellence in animal nutrition. We intend to sustain strong

profitable growth through meeting customer and consumers needs for the highest quality, nutritious and

innovative food products – from farm to fork. Our Company’s operations are organized into two major groups:

Protein Value Chain, which includes the fresh and processed meats, animal nutrition, hog production and

rendering operations.

Bakery Products Group, which comprises Maple Leaf’s 86.9% ownership of Canada Bread, a leading producer

of value-added nutritious fresh bakery products, frozen bread products, and fresh pasta and sauces.

Maple Leaf Foods is publicly traded on the TSX under the symbol MFI. Our headquarters are in Toronto and we

employ 23,000 people at operations across Canada, the United States, Europe and Asia. For more information,

visit our website at www.mapleleaf.com.

2004 Highlights

• Significant base business profit growth

• Acquired Schneider Foods; began merger process

• Significantly strengthened the Company’s financial structure

• Realized benefits of improved portfolio balance

• Increased nine year CAGR in EPS to 13% and 2004 RONA to 8.9%

• Increased investments in leadership development and Six Sigma

• Increased margins through innovation, improved sales mix, and cost reduction

• Ranked #1 for customer satisfaction in Canadian industry survey

• Excellent workplace safety record

• Major investments in food safety leadership

Corporate Profile

2 MAPLE LEAF FOODS INC.

SALES BY GROUP

Financial Highlights

DOMESTIC VS.INTERNATIONAL SALES

OPERATINGEARNINGS BEFORE

RESTRUCTURING COSTS

TOTAL ASSETSBY GROUP

• 64.9% Meat Products

• 20.6% Bakery Products

• 14.5% Agribusiness

• 71.1% Domestic

• 15.1% U.S.

• 13.8% Other International







• 8.9% Not allocated

For years ended December 31(In millions of Canadian dollars, except share information) 2004 2003 2002 2001 2000

Consolidated results

Sales $ 6,365 $ 5,042 $ 5,076 $ 4,775 $ 3,943Earnings from operations (i) 256 152 204 158 90Net earnings 107 35 85 57 37Return on net assets employed (ii) 8.9% 6.4% 9.2% 7.6% 5.4%

Financial position

Net assets employed (iii) $ 2,261 $ 1,596 $ 1,458 $ 1,405 $ 1,298Shareholders’ equity 906 743 732 660 451Net borrowings 1,046 697 579 599 722

Per share

Net earnings $ 0.90 $ 0.27 $ 0.71 $ 0.55 $ 0.34Dividends 0.16 0.16 0.16 0.16 0.16Book value 7.18 5.72 5.64 5.05 3.77

Number of shares (millions)

Weighted average 113.6 113.1 112.5 95.9 95.1Outstanding at December 31 125.2 113.2 112.9 112.0 95.1

(i) Excludes restructuring costs in 2003.(ii) After tax, but before interest, calculated on average month-end net assets employed. Excludes restructuring costs in 2003 and significant gains on asset sales

in 2000.(iii) Total assets, less cash and non-interest bearing current liabilities.


(In millions of Canadian dollars) 2004 2003 % change

Meat Products Group

Sales $ 4,127 $ 2,870 44%Earnings from Operations before restructuring costs 68 24 181%Total Assets 1,452 666 118%

Agribusiness Group

Sales $ 925 $ 919 1%Earnings from Operations before restructuring costs 99 70 41%Total Assets 598 556 8%

TOTAL PROTEIN VALUE CHAIN


Sales $ 5,052 $ 3,789 33%Earnings from Operations before restructuring costs 167 94 77%Total Assets 2,050 1,222 68%

Operating Groups

The Meat Products Group includes Consumer Foods, Schneider Foods, Pork, Poultry, and International operations.The Agribusiness Group comprises Hog Production, Feed and Rendering operations.

Protein Value Chain

Bakery Products Group

TOTAL BAKERY PRODUCTS GROUP


Sales $ 1,313 $ 1,253 5%Earnings from Operations before restructuring costs 89 58 53%Total Assets 702 717 (2%)

The Bakery Products Group is comprised of Maple Leaf Foods’ 86.6% ownership as at December 31, 2004 in Canada Bread Company,Limited, a leading producer and distributor of fresh bakery products, frozen partially-baked or “par-baked” products, and freshpasta and sauces, with operations across Canada and in the United States and the United Kingdom.


AN INDUSTRY IN MOTION

Food is the spice of life and after nearly 50 years in the

industry, I can attest to the fact that it’s also a great business

to be in. But the industry has undergone phenomenal

change. When I entered this business, there was very little

product differentiation and the field was wide open. Today’s

food industry is well developed and highly competitive.

But the basics which spelled success in the past still hold

true today. The first is innovation. While there may be

more products on the shelf today, consumers are more

knowledgeable, more affluent, and have more to spend on

products that save them time, taste great, and provide

good nutrition. Our success lies in developing innovative

new products, like Maple Leaf Fully Cooked Roasts, that

really strike a strong chord with consumers. At Maple Leaf,

we have great people who love food and the industry, and

our speed of innovation continues to accelerate. We comb

the world looking for great ideas, quickly adapting them to

the North American market … a fast follower strategy. We

are focused on adding value to our products, and our

bottom line, through the power of innovation.

The second driver is being the low cost producer.

Generating high returns in this industry means operating

the most efficient plants. Through Six Sigma we have the

tools to ferret out inefficiencies and achieve continuous

improvement. Creating world-class assets takes time.

Through our investments we have established a network

of bakery, protein and feed facilities that operate in the top

quartile of manufacturing efficiency. With leading market

shares across our businesses, our plants operate at very

high capacity utilization.

A DECADE OF TRANSFORMATION

In 2005, Maple Leaf will complete a decade of

transformation. As we approach this milestone, we have

the team, the assets and the culture to realize the benefit of

our investments. With a strong Canadian foundation, Maple

Leaf Foods is readying itself to tap into new opportunities

outside our borders. This growth will continue to be guided

by a highly disciplined management team and Board of

Directors, who balance growth and investment with creating

long-term shareholder value. Thank you to my fellow Board

members and to the passionate people across Maple Leaf

who are driving our success.

Sincerely,

G. Wallace F. McCain, Chairman

G. WALLACE F. McCAINChairman

Letter from the Chairman


The essence of who we are and what we are about is

described in this thought. We feel, as a team, we can prove

over time that extraordinary people who are totally passionate

about what they do in this business around the world, can

build a winning company by out performing the competition

and substantially reward all stakeholders who share our

passion. Simple words; powerful insight!

Passionate People;Passionate about Food

MICHAEL McCAIN, President and Chief Executive Officer


2004 was an excellent year. Following a difficult 2003, we

set two primary goals: restore our base of earnings and

complete the Schneider Foods transaction, while establishing

the platform to merge Schneider Foods into Maple Leaf. By

staying focused, I am pleased to say we had an excellent

year of accomplishments on both fronts. First, our financial

performance in 2004:

While we benefited from a relatively minor tailwind from

certain commodity markets, the bulk of this improvement

was due to the normalization of some factors that impacted

our earnings in the prior year, getting us back on the

long-term growth curve. Additionally, in 2004 we were very

pleased with the effect of our portfolio balance in stabilizing

our earnings. This portfolio effect was significantly

enhanced with the Schneider Foods acquisition, which has

balanced the contribution of our fresh and value-added

processed meats operations. We have made excellent

progress in merging our two organizations, and have

implemented a structured process to largely complete this

very complex task by the end of 2006.

While it may not appear so to some, one of our bigger

accomplishments in 2004 was something seemingly very

simple. Yet, it was some nine years in the making – the

definition and articulation of the spirit of Maple Leaf

Foods – Passionate People; Passionate about Food. The

essence of who we are and what we are about is described

in this thought. We feel, as a team we can prove over time

that extraordinary people who are totally passionate about

what they do in this business around the world, can build

a winning company by out performing the competition

and substantially reward all stakeholders who share our

passion. Simple words; powerful insight!

PASSIONATE ABOUT LEADERSHIP

The completion of the Schneider Foods transaction in 2004

caps nearly a decade of transformation since Ontario

Teachers’ Pension Plan Board and McCain Capital Corporation

invested in this organization and its rich history in 1995.

Transformations don’t come easy, and they are never a

Letter to Fellow Shareholders

• Sales were up 26% to $6.4 billion, mostly due to the Schneider Foods transaction

• Earnings from operations(i) increased by 68% to$256 million

• Earnings per share(i) increased 150% from $0.36 to$0.90

• Cash provided by operating activities was $239 million compared to $77 million in 2003

• Capital expenditures were $157 million

• Return on net assets increased from 6.4% to 8.9%

• The share price closed the year at $14.97, up 43%,and out performed the S&P Food Products Indexwhich increased 18%

(i) Before restructuring costs in 2003

We have made excellent progress in merging our two organizations –Maple Leaf and Schneider Foods – and have implemented a structuredprocess to largely complete this very complex task by the end of 2006.

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straight line. Facing an organization in decay in every way,

over the past nine years we have re-engineered each

element to create a platform for future growth and high

performance over time.

Culture and discipline. Underpinned by our unwavering

commitment to Leadership Edge and Six Sigma, the

culture and managerial disciplines of the organization have

been completely transformed. Maple Leaf is a culture for

passionate people; a culture for high performers; a culture

for impact players. Our managerial disciplines – financial,

strategic and operating – are exceptional.

Market position. With a continuous focus on organic

growth and the addition of 25 acquisitions, we have

materially altered our market positions in all our key

businesses. Our market shares in Canada are now solid,

and provide us the scale to better serve our customers,

defend against global competitors, and a solid platform for

global growth. Simultaneously, capacity utilization has

significantly increased, giving us the “cost position” to be

more effective in today’s highly competitive global market.

Brands. With the addition of Schneider Foods, we now

have three “national power brands” – Maple Leaf®,

Schneiders® and Dempster’s® – overarching our portfolio

of sub-brands and regional brands. According to

ACNielsen(1), these are three of Canada’s top 50 consumer

products brands, and collectively they are growing at 2.8(2)

times the rate of the average of that peer group. Why?

Innovation and constant investment to support growth.

Assets. Including both acquisitions and capital expenditures,

we have invested over $2 billion since 1995. Our assets have

been materially upgraded and are well positioned to

compete in world markets, with now over 120 operating

locations. Headline projects include leading edge facilities

like Brandon, Manitoba, in primary pork processing;

Roanoke, Virginia, in par-baked breads; our network of

low-cost animal feed mills; Laval, Quebec, in fresh

bread; Rotherham, England in bagels; and Saskatoon,

Saskatchewan, in processed meats. With greater “global

scale” we are positioned to increase our investment in

these assets for excellent returns.

Operating costs. We have largely achieved competitive

operating costs across the board. Significant investment in

information technology has been a tremendous enabler,

and our commitment to financial discipline is absolute. The

role of Six Sigma, permeating everything we do, continues

to build competitive advantage in operating costs.

Customer relationships. Success and security flows only from

satisfied customers. We have completely re-engineered our

customer strategies and relationships, adopting core

principles to achieve this. We are committed to plugging

into our customers’ unique strategies, and not asking them

to plug into ours. We have adopted collaborative category

MICHAEL McCAINPresident and Chief Executive Officer

CapitalExpenditures

(1) Market research company(2) Excludes Maple Leaf Prime NaturallyTM

Meat Products GroupAgribusiness GroupBakery Products Group

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Passionate


People

A Passionate CultureMaple Leaf is a culture for passionate people; aculture for high performers; a culture for impactplayers. Our managerial disciplines – financial,strategic and operating – are exceptional.

management relationships with private labels,

supporting these programs where we can. We are

adding value to these relationships through our people,

our processes, and as much innovation as we can

muster. The results have been recognized across the

board, with #1 satisfaction ratings across many of

our customers.

Strategy and direction. Each of our operating companies

has a very clearly articulated competitive strategy

today. We have a robust overall strategic plan and our

portfolio is better positioned than ever before in our

history. Our people have a clear sense of direction, based

on the elements of our Seven Strategic Orientations

which guide all our business decisions.

So, to summarize, a transformation like this is never

one-dimensional. Over the past nine years, we have

turned over every stone. Most important, what are the

results so far? Interestingly, we feel they are good,

but not yet great! Since 1995, our nine-year compound

annual growth rate in earnings per share has been

13%. While that puts us near “top-of-class” in our food

peer group, we have not achieved our target of 15%

over time. Our RONA has also grown from 6.5% to

8.9% in 2004, but is also short of our 11.5% target. Our

belief is that, with the platform established we can

elevate these performance levels over the next decade.

While gratifying – the transformational journey is never

complete – we have a substantial unfinished agenda!

PASSIONATE PEOPLE

Passionate people embody several trademark attributes.

First, they have intense emotional energy and deeply

care about what they commit themselves to. They don’t

care a little; they care a lot! Second, they are action-

oriented. They don’t just talk about things – they make

things happen! Third, passionate people are tenacious.

They are willing to overcome any obstacles, which

inevitably arise, to succeed. They have single-mindedness

of purpose. Finally, they always harbour an overall sense

of optimism and confidence. They see a brighter future,

and are confident in their ability to create that future!


Passionate PeopleOur people have a passion for the food business. SteveAttridge, Vice-President Finance for Maple Leaf Porkand a professional chef by training, truly embodies thespirit of our people.


Passionate aboutLeadership

Passionate about InnovationOur passion for food guides the creationof new and exciting products for the marketplace, connecting to consumers in a way that fits today’s lifestyles.

Maple Leaf people are passionate people! Long ago we

defined a set of leadership values which each of us

commits to uphold and demonstrate every day.

Maple Leaf Leaders will always...

They reflect the behaviours of passionate people. Our

commitment to constantly develop our people, focusing

on leadership, continued in 2004 with a total of 6,160

person days of development through the Maple Leaf

Leadership Academy and Six Sigma training. Passionate

people are rarely satisfied with the status quo. In Six

Sigma, the tool kit of Maple Leaf leaders, we now have

deployed 130 Black Belts with over 600 continuous

improvement projects completed in 2004. The

contribution of Six Sigma to our improved operating

results is substantial.

What keeps great people at Maple Leaf? An action-

oriented, winning culture, and the thrill of collaborating

with a fantastic team of thousands of people

accomplishing enormous things together. People

drive profitable growth; not markets!

PASSIONATE ABOUT PERFORMANCE

Passion needs to be harnessed to be effective. A

hallmark of the Maple Leaf organization is discipline.

We have ultra detailed financial planning and reporting

systems and processes. Our people have clear individual

accountability, and we focus that accountability on

specific results. Our Six Sigma processes bring continuous

improvement, control and project discipline to

everything we do.

2004 was a year of broad accomplishments. Operating

earnings in our Bakery Products Group grew substantially

from $58 million in 2003 to $89 million in 2004. The Fresh

Bakery team had a spectacular year turning a strategic

challenge into an opportunity! Low carbohydrate diets

raged forward in the early part of 2004. Some predicted

the decay of a business that has been in existence

for thousands of years – fresh bread. Our marketing

1. Do What’s Right

2. Be Performance Driven

3. Have a Bias for Action

4. Continuously Improve

5. Be Externally Focused

6. Dare to be Transparent


Market LeadersWith the addition of Schneider Foods, we nowhave three flagship consumer brands – MapleLeaf®, Schneiders® and Dempster’s® – overarchingour portfolio of strong regional brands.


teams, on the contrary, saw this as an opportunity

to benefit from a more fundamental consumer trend –

health and wellness – quickly introducing Dempster’s

Carb Wise™ bread to meet the needs of the low-carb

shopper, while expanding Dempster’s WholeGrains™

to meet the increased demand in the whole

wheat/whole grain segment. As a testament to

innovation, even Dempster’s Stays Fresh to the Last

SliceTM white bread increased sales in the declining

white bread market. Frozen Bakery performance was

more challenged in 2004 due to softer in-store bakery

sales and the high Canadian dollar. On the success

side, we significantly expanded our foodservice sales,

benefiting from a growing trend in quick service

restaurants to healthier sandwich products. As the year

unfolded, we saw the sharp reaction to low-carb diets

wane. We expect the ongoing impact to be moderate,

if any. During 2004, we began construction of the largest

bagel bakery in our entire system – 48,000 bagels

per hour – in Rotherham, England which will be

operational in early 2005. Maple Leaf Bakery U.K.

continues to expand its market, providing a platform

for European growth, and is moving into new specialty

bakery categories. Our Olivieri® pasta and sauce business

has grown significantly in the U.S. retail market and is

meeting the needs of consumers with new Carb Wise™

and NutriWise™ whole wheat pasta products.

Our total Protein Value Chain operating profits (Meat

and Agribusiness combined) improved 77% from

$94 million in 2003 to $167 million in 2004. While Maple

Leaf Consumer Foods and Schneider Foods felt the

impact of rapidly rising raw material markets as the

year progressed, Maple Leaf Fully Cooked Roasts proved

to be an enormous market success and helped drive

both top and bottom line performance. The Schneider

Foods’ team also continued with an active innovation

program including Schneiders Oh Naturel!™, Michelina’s

Avantage™, and Schneiders Hot ‘n Hearty™ products.

Merger activity dominated the agenda of both these

organizations. Of particular note, although not

complete, was the improved performance in the Atlantic

Canada meat operations.

Passionate aboutPerformance

Passionate about TrainingOur commitment to constantly develop ourpeople continued in 2004, with a total of 6,160person days of development through the MapleLeaf Leadership Academy and Six Sigma training.


Passionate about FoodOur passion for food means many things. It begins with our love for the food business. Collectively, we bring to Maple Leaf a vast depth of talent and experiencein this industry.


Maple Leaf Pork made substantial progress in the face of

USDA reported market conditions which saw the basic

“spread” in primary processing decline year over year by

US$3.34/cwt or 61%, largely in the back half of the year.

Their operating performance improvement against the

market was driven by a higher value product sales mix and

continuous improvements in plant performance. Maple

Leaf Poultry achieved continued growth in Maple Leaf

Prime Naturally™ poultry sales, and benefited from

participation in premium private label programs and

strong Canadian poultry prices that were fuelled by an

Avian flu outbreak in British Columbia. While overall pork

imports into Japan grew significantly in 2004, Maple Leaf

Foods International did not participate in the bulk of that

growth, although they diversified their geographic base by

expanding into other markets around the world.

Agribusiness Group operating profits grew 41% to

$99 million in 2004. Results improved in our animal nutrition

operations, Shur-Gain and Landmark, across most regions

of the country. Elite Swine, with 122,000 sows under

management and 2.2 million market hogs sold, experienced

a dramatic year as a result of currency fluctuations, as the

Canadian hog industry is highly sensitive to the value of

the U.S. dollar. Adjusting to the “new normal” of the high

Canadian dollar, this team continues to engineer costs out

of the system, and by taking active measures we are

regaining the competitiveness of our Canadian hog industry.

These operations achieved some relief from very high hog

prices in the back half of 2004. Maple Leaf’s effective hog

ownership (EHO) declined from 25% at the end of 2003

to 21% at the end of 2004 due to the renegotiation of long-

term contracts with producers, giving them the opportunity

to swap into market-based agreements, and the addition of

Schneider Foods who did not have an ownership position

in hogs. Our Rothsay rendering operations achieved

exceptional performance in 2004, benefiting from rising

commodity markets, particularly soy markets, which made

rendered feed ingredients highly competitive. Adding

value to by-product streams is an integral element of the

Rothsay business strategy, and plays a significant role in

our Protein Value Chain. Executing this, the team

announced a significant new investment in Quebec to convert

tallow into bio-diesel, an environmentally sustainable fuel

that can be readily used in commercial and industrial

applications. Additionally, they expect to introduce a new

organic lawn fertilizer product, produced from meat and

bone meal, which will provide a natural alternative to

chemical fertilizers.

Other accomplishments in 2004 included a remarkable

27% improvement in lost time accident frequency rates,

the fourth consecutive year of double digit declines and a

five-year reduction of 59%. This has been the direct result

of dedicated effort by tens of thousands of Maple Leaf

people to create a safe work place. “Nobody Gets Hurt” is

Passionateabout Food

People have clear individual accountability, and we focus that accountability on specific results. Our Six Sigma processes bring continuous improvement, control and project discipline to everythingwe do.


the mantra of operating people throughout Maple Leaf, and

we have seen breakthrough results from this commitment!

Our corporate finance team achieved extraordinary results

in 2004, successfully concluding almost $2 billion in

refinancing on favourable terms to finance the Schneider Foods

transaction and strengthen the balance sheet. This included

a private debt placement of $500 million to refinance

short-term debt and, in December, a public equity issue of

$165 million, of which $80 million was used to redeem

the convertible debenture in 2005. The Company’s cash

flow performance was strong in 2004. We generated $239

million in operating cash flow, invested $157 million in

capital expenditures and approximately $520 million in

acquisitions, and paid out $19 million in dividends. At year

end, our balance sheet was in excellent shape with a Net

Debt/EBITDA ratio of 2.6x, reflecting our commitment to

maintaining investment grade credit quality.

Our financial accomplishments could not have been as

successfully completed without the extraordinary support

of the Company’s largest shareholder, Ontario Teachers’

Pension Plan Board (Ontario Teachers’). As long-term

investors and partners, they are fully connected to our vision

and supported the Schneider Foods transaction by issuing

an equity put option to act as a safety net and bridge

during a sensitive balance sheet transition period. This was

highly effective, and all shareholders owe Ontario Teachers’

a measure of gratitude for their commitment.

PASSIONATE ABOUT FOOD

This means many things to us. It begins with our love for

the food business. Collectively, we bring to Maple Leaf a

vast depth of talent and experience in this industry. Our

Chairman has spent 50 years in the business – experience we

all draw on – and most of the management team has spent

their entire professional life connected to it in some way.

Food is a wonderful business: stable demand, limitless

growth opportunities for those with the vision and skill to

capture it, and consistently profitable for good operators.

More specific to Maple Leaf, we have excellent market

positions in two of the most fundamental food segments

– meat and bakery. They fit well together, not just from a

portfolio balance perspective but also with a view to

synergies, which we have achieved in operating them

together. We are very excited about growth prospects in

each. Meat protein consumption is on the rise around the

world. For example, global pork consumption has grown

29% since 1996 alone! This is expected to continue, tracking

increases in global per capita income levels. In the bakery

business, we have tapped into the growth of par-baked

breads and specialty bakery products in Europe, both

profitable opportunities. We love the food business!

But being passionate about the food is not only about the

business – it’s about food itself. Food is much more than

just sustenance; it represents experiences, culture, family,

love and a basic source of health and wellness. Most of our

We believe food can, and should be, the foundation of our social responsibilities, and we exercise that in many ways. We contributeactively to philanthropic efforts including contributions to food banksand inner city shelters across Canada and around the world.


people connect in some way to the virtues of food in our

lives – from the amateur chefs, to the family memories of

a favourite meal, or to the satisfaction of just being experts

in our products. This also defines many of our product

marketing strategies. A passion for food guides the creation

of new and exciting products for the marketplace,

connecting to consumers in a way that fits today’s

lifestyles. For example, time starved Canadians can enjoy

wonderful Maple Leaf Fully Cooked Roasts in just minutes

– our teams fussed over every detail of getting these highly

successful products to taste “just right”. Or, consumers

keenly interested in the healthy lifestyle benefits of whole

grain bread can, and are, flocking to shelves for Dempster’s

WholeGrains™. And, even in the midst of our time pressed

society, there will always be room for the indulgence of a

barbequed Schneiders Juicy Jumbos®!

Passionate about food also takes on a whole other dimension

for Maple Leaf as well. We believe food can, and should be,

the foundation of our social responsibilities, and we exercise

that in many ways. First, we contribute actively to food

banks and inner city shelters across Canada and around

the world. We have and will increase our commitments to

philanthropic efforts that use food as a catalyst for

contributions to those less fortunate in our society. A most

recent example was our efforts to contribute foodstuffs

directly to relief efforts for the Asian tsunami disaster.

When the disaster struck, we were able to quickly mobilize

our long-standing customer relationships in Southeast Asia

to support the logistics and cost of delivering over 129,000

tetra packs of soymilk to victims in the early aftermath. In

addition, we also recognize our responsibilities as leaders in

agribusiness in Canada. Our Company is built on strong

values, including acting with integrity and doing what’s

right. If not properly managed, agribusiness has the

potential to cause an adverse environmental impact and

our commitment is to ensure we mitigate this impact as

best we can. During the past three years, we have spent

over $40 million in environmental systems and upgrades at

our plants. In our hog production operations, we have been

leaders in responsible growth and using sophisticated

management practices, such as Global Positioning Satellite

tracking, to ensure we meet high environmental standards.

Food is our business, our passion, our responsibility and

our future. We are very excited to be a part of it!

PASSIONATE ABOUT OUR FUTURE

While we have completed a decade long transformation,

our agenda is not nearly complete. As a management team

who has a significant shareholder stake in the outcome as

well, we are committed to generating high returns over

time. That said, our profit growth will never be a straight

line. Why? Because it is in our nature to create value by

managing for the long-term; by doing bold things in the

marketplace to add shareholder value that can sometimes

Passionate about our Future

Richard A. Lan, President and ChiefOperating Officer – Bakery Products Group

J. Scott McCain, President and ChiefOperating Officer – Agribusiness Group

Michael H. Vels, Chief Financial Officer

Tom P. Muir, Chief Development Officer

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create a short-term earnings impact; and by accepting

some manageable volatility. This does not mean we are not

keenly focused on short-term results – in fact, our incentive

compensation systems for thousands of our people depend

on short-term success and we have a highly disciplined

approach to managing this, but our decision-making will

always focus on the horizon.

Our strategic blueprint will continue to be defined by

the following seven elements, and we have initiatives

underpinning each of them:

Going forward, our marketing and new product

development will be centered around the biggest drivers

of consumer behaviour today: health and wellness and

convenience. In 2005, we will continue to proactively

manage the negative impact of yet another new plateau in

the Canadian/U.S. foreign exchange rate. While our portfolio

is reasonably resilient to movements in the exchange

rate over time as we have a modest net long U.S. dollar

position, there are always short-term “rapid movement”

periods of adjustment.

In the mid-term, the most significant “value creators” on our

unfinished agenda include harvesting the benefits of the

Schneider Foods merger (there will be significant activity in

2005, but the benefits will be realized well into the future),

continuing to enhance the performance of our Protein

Value Chain through cost reduction and adding value to

our products, and constantly driving innovation in both

the bakery business and the protein business. Beyond this,

in 2005 we will begin to develop more robust plans for

geographic expansion outside Canada in our core categories.

We will continue to build on what got us to where we are

so far – our total commitment to attracting, developing

and retaining outstanding people, and deployment of Six

Sigma throughout the Company. In the future, we will be

taking action to carry the principles of the Leadership Edge

and Six Sigma right to the front line of the organization –

we call it Leadership @ The Edge and Six Sigma @ The

Edge. Engaging our front line team members is one of our

most important strategic objectives.

It’s been an amazing journey and we have made

extraordinary achievements. We have and will continue

to build a world-class, Canadian-based food company. By

far our greatest achievement is the team of committed

passionate people who believe in what we are doing, who

believe in where we are heading and are willing to share

their passion for us to get there. As shareholders, we

thank you for sharing our vision!

1. Add value for our customers

2. Add value to our products

3. Invest in leading market shares

4. Build our brands

5. Innovate

6. Drive costs out

7. Diversify globally

Michael H. McCain Richard A. Lan J. Scott McCain Tom P. Muir Michael H. Vels

Date post:	11-Feb-2022
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Protein Value Chain

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