Over the past 15 years, we have built Canada’s largest fresh bakery business, the leading specialty bakery business in the U.K., one of the largest frozen bakery businesses in North America, and a growing fresh pasta and sauce business.

Today, our bakery business is an integral part of our overall operations and has enabled us to respond to growing demand from Canadian food retailers and foodservice providers for a broader range of integrated product solutions.

2010 was a year of challenges in our frozen and U.K. bakery operations that impacted our overall performance. Our frozen bakery operations provide frozen, partially or fully-baked artisan and premium breads and rolls to retail and foodservice customers across North America. Sales volumes and earnings declined due to some transitory changes by some key customers. Performance in this business began to improve toward the end of the year and we expect improved results in 2011.

Our operations in the United Kingdom produce premium specialty products, and the deeper impact of the recession in the U.K. has challenged this business.

We are responding by lowering costs through consolidating volumes, manufacturing and SG&A cost reductions. We are also increasing our marketing through increased promotion of the New York Bakery brand in the U.K. to drive growth in the bagel category. Through a relatively small investment we have built this business from a start-up to a market leader over the past decade. Prior to the financial recession of 2008, the business was very profitable and it will be successful again. For Maple Leaf in total, the U.K. bakery is a footprint for future growth outside North America, which is essential, long term.

Our fresh bakery business, the largest segment of the Bakery Products Group, increased its earnings in 2010. This is an excellent business and Canada’s leading

provider of nutritious, value-added products under marquee brand names including Dempster’s, POM and Ben’s. The focus in this business is an identical blueprint as our strategic plan for the protein operations – realize efficiency gains through simplification, build scale in our bakery network, and increase top-line performance through growth in current and new categories. Last year we launched a project to standardize the sizes of pans used for baking breads and rolls…again numerous acquisitions had created a lot of variability, resulting in complexity and added costs. By early 2012 we will reduce pan sizes from 33 today to 10, with 80% of our volume in three sizes. The new bakery facility in Ontario will significantly reduce overhead costs and provide additional capacity to support new product innovation.