Smoky Market Foods, Inc. (fka SMKY)

[CharlesNet]

SMOKY MARKET FOODS, INC.
A Publicly Traded Company: OTCQB “SMKY”
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From: Edward C. Feintech, Chairman, President & CEO
e-Mail: [e-mail]


November 10, 2011

To SMKY Shareholders:

Most, if not all of you, who are viewing this letter have at some time played a favorite board game (i.e. checkers, chess & backgammon) and therefore, know how your game plan strategy for winning is [always] subject to the outcome of your opponent’s every next move or throw of the dice. And, often times as well, a particular outcome will be a total surprise be it positive or negative, but “chance always favors the prepared mind.” So your ability to win is a function of your readiness to be flexible during the early play and to react swiftly and decisively, and often times in a direction different than your strategy had been just moments before.

Launching a new company and executing upon the marketing, operating and financing plans set forth to shareholders is principally no different than a board game, other than its being real-world action with real-world consequences for not winning. What’s important is that every tactical move be quickly evaluated and adjustments swiftly made to take advantage of the learning experience and in the process, a company’s shareholders must be kept accurately advised of changing maneuvers and marketing strategies. Changes need to be made swiftly to preserve capital and maintain forward momentum. Well informed shareholders forge a supportive, cohesive ownership base upon which CEOs get financing to perform.


Up-Date/Current Information & Analysis –

Weight Watchers Ad Program – Internet Operations

The 30-day ad promotion with Weight Watchers resulted in a very surprising disappointment relative to our anticipation for orders even at the lower end of forecast modeling, given the still weak economy and newness of the brand. While there was a small percentage of “click-throughs” to the Smoky Market website from the ads, Weight Watchers considered the ad response to be relatively successful. But given the very low percentage of order conversions from the click-throughs, the results provided us with a further and conclusive understanding of just how difficult “on-line” sales is to develop and particularly so when the product is new and expensive to ship, our unique and superior Smoke-Baked quality and inherent demand notwithstanding.

When Smoky Market is “in-store” branding, ad campaigns like Weight Watchers will be more cost-effective. We already know how effective sampling is, which must be tied to the selling strategy so we will not be continuing with Weight Watchers nor launching Groupon; capital is for tasting!



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We quickly and efficiently learned that Smoky Market goodness must be brought to the mass public conveniently and cheaply in order to have our product enjoyed with frequent consumption from its being a pure quality and versatile “life-style” food. The exercise in advertising with Weight Watchers and making further IT improvements to our website system to enable Groupon marketing has resulted in a good investment. So when we begin to open area markets of in-store merchandising, we will utilize Groupon and other social advertising sites and capture cross-marketing benefits from ad promotions that feature both retail and Internet selling.


Wholesale Distribution – SYSCO Begins Stream of Revenue

When it became evident that our Internet move for initial on-line revenue was not going to build nearly as quickly as anticipated, we changed marketing direction to build revenue through wholesale branding and focused on securing distribution with a major foodservice distributor. SYSCO is the global leader in foodservice distribution and we got the opportunity to present our salmon program to SYSCO of Iowa; the executive chef and staff loved the product and bought our program on the spot. We shipped their initial order on November 10th and we’re presenting our program to all their Iowa reps at their holiday sales event on November 11th. Highlights of our program with SYSCO of Iowa are:

• SYSCO of Iowa, a division company of SYSCO Foodservice, is selling Smoky Market entrée fillets, whole platter fillets and flaked salmon. Beginning 2012, they anticipate adding our other protein items to their inventory offering.

• SYSCO of Iowa is functioning as “the” broker for Smoky Market foodservice for Iowa and has been awarded exclusive distribution rights for the state. We will be provided direct introductions to other SYSCO division companies in the surrounding states, with the objective being to have distribution of Smoky Market products through all SYSCO divisions nationwide … and possibly the continuation of exclusive representation.

• Assuming our relationship with SYSCO evolves as anticipated, we would offer them distribution of our Smoky Kosher line, as well as distribution to our BarBQ Diner outlets when we launch the fast-casual dining “Franship” concept.

Lots of great action happing with SMKY – thanks for being a SMKY shareholder!

Eddie


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Corporate & Production Offices Office of the Chairman
1511 E. 2nd St. P.O. Box 2864
Webster City, Iowa 50595 Aptos, CA 95001

Office: 866-851-7787 * FAX: [phone] * eMail: [e-mail]
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FORWARD-LOOKING STATEMENTS

Statements in this news release regarding future financial and operating results, future growth in research and development programs, potential applications of our technology, opportunities for the company and any other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "will," "believes," "plans," "anticipates," "expects," "estimates," and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: our limited operating history, need for future capital and need to enter into relationships with retailers for retail merchandising business, supply and distribution risks, risks inherent in the development and commercialization of potential products, protection of our intellectual property, and economic conditions generally. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in the company's periodic reports, including the company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Forward-looking statements are based on the beliefs, 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 beliefs, opinions, expectations, or other circumstances should change.

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