SAN FRANCISCO, Aug. 16, 2010 (GLOBE NEWSWIRE) -- 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.

About Diamond

Diamond Foods is a high-growth innovative packaged food company focused on building, acquiring and energizing brands including Kettle®Chips, Emerald® snack nuts, Pop Secret® popcorn, and Diamond of California® culinary and snack nuts. The Company's products are distributed in a wide range of stores where snacks and culinary nuts are sold.

The Diamond Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6112

Note regarding forward-looking statements: This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements necessarily depend on assumptions may be incorrect and are subject to risks and uncertainties. Actual results could differ materially from projections made in this release. Some factors that could cause actual results to differ from our expectations include risks loss of key customers and an increase in competition. A more extensive list of factors that could materially affect our results can be found in Diamond's periodic filings with the Securities and Exchange Commission. They are available publicly and on request from Diamond's Investor Relations Department.

CONTACT:  Diamond Foods, Inc.
          Investors:
          Bob Philipps, VP, Treasury & Investor Relations
          415-445-7426
          bphilipps@diamondfoods.com
          Edelman
          Media:
          Michael Altfest, Account Supervisor
          415-486-3244
          michael.altfest@edelman.com