June 28, 2001
Orlando, FL

Contact
Wilma Williams, Investor Relations
Galaxy Nutritional Foods
407/855-5500 ext. 105
wwilliams@galaxyfoods.com

GALAXY NUTRITIONAL FOODS SIGNS "ULTRA SMOOTHIE" LICENSING AGREEMENT WITH TROPICANA AND ANNOUNCES FISCAL 2001 YEAR END GUIDANCE

ORLANDO, Florida (June 28, 2001) - Galaxy Nutritional Foods, Inc. (AMEX:GXY), a leading producer of nutritious health-promoting plant-based dairy and dairy-related alternatives for the retail, foodservice and industrial markets, today announced the signing of a four year licensing agreement with Tropicana Products Sales, Inc. of Bradenton, Florida, a division of PepsiCo, Inc. Tropicana is the world's leading producer and marketer of branded fruit juices and is the third largest Brand in Grocery stores. This agreement permits Galaxy to use Tropicana's logo on the point of sale packaging of its new Ultra Smoothie™ product, which will be distributed in both the foodservice and retail channels of distribution in the United States and Canada.

Galaxy's Ultra SmoothieTM product "made with Tropicana Juice" is a major delivery system for plant proteins and will be one of the most nutritious smoothie products marketed today, containing a complete serving of nutrition in one delicious product. It is made from a combination of Tropicana fruit juice and Galaxy's Veggie MilkTM, the world's most nutritious milk made from plant proteins. Phytonutrient rich Ultra Smoothie™ contains a full serving of soy, rice and oat protein, is 100% vegetarian (pareve), is low fat, cholesterol, lactose and saturated fat free, and has enough soy protein to meet the FDA health claim standard on soy.

Angelo Morini, Galaxy's Chairman, CEO and President, commented, "We began our relationship with Tropicana in November of 1999 when we announced our agreement to jointly develop a smoothie product. I am extremely pleased that we are now entering the next and most exciting phase of our business relationship with the rollout of the Ultra Smoothie™ "made with Tropicana juice". As two companies who are both leaders in our food categories, and who contribute to healthier eating lifestyles, we embrace the major paradigm shift in consumer eating habits as the world moves more and more to eating proteins from the plant kingdom as opposed to the animal kingdom. The smoothie category is one of the fastest growing in the food industry and products such as the Galaxy's Ultra Smoothie™ "made with Tropicana juice" will help lead the way in reducing the risk of heart disease, cancer, diabetes, osteoporosis and other maladies."

"Smoothies are an exploding category that is gaining enormous traction with consumers," said Frank Hood, Tropicana Licensing Manager. "Our Smoothie strategy includes a single serve Tropicana Smoothie, packaged in a 11.5oz bottle for on the go consumption, which is currently in test market. The addition of Galaxy's new Ultra Smoothie "made with Tropicana juice" will allow us to reach out to those consumers whose eating habits embrace the benefits of plant proteins, with a differentiated product and package. The combination of those nutrients with the vitamins and phytonutrients found in our juice is exciting".

Today, the Company also announced that it anticipates sales of approximately $47 million for the year ended March 31, 2001 and a loss per share for the same period of between $.55 and $.58. The loss is primarily the result of changes in accounting policy related to slotting fees, certain advertising costs, and overhead allocations, and certain non-recurring expenses relating to the installation and start up of equipment. In addition, the company paid higher than expected costs for protein, one of the Company's main product ingredients, due to closer scrutiny of European-originated protein by the USDA and FDA, which also reduced production and resulted in shorted product shipments during the fourth quarter. The Company's earnings would have been in line with previous guidance in the absence of the changes in accounting policy, non-recurring expenses and higher than expected raw material costs. Galaxy confirmed that it remains comfortable with analyst estimates for fiscal 2002.

Angelo Morini, Galaxy's Chairman, CEO and President, stated, "With the acquisition and final installation of new equipment along with the ever increasing demand for Galaxy's products and signed agreements with global players such as Tropicana, Galaxy is poised to experience record sales in 2002. Galaxy's current plant operation and ability to produce and ship more than $1 million per week does not compare to Galaxy's future production opportunities. We stand by our decision to invest in Galaxy's future with our $15 million investment in new equipment. For the first time in the history of Galaxy, we are positioned to capture an anticipated one half percent of the more than $150 billion dairy segment with a consistent per week production capability reaching up to 6 million pounds per week once all new equipment is fully operational."

Galaxy plans to announce full fourth quarter fiscal 2001 and fiscal 2001 year end results on Monday, July 9, 2001. The Company plans to host a conference call and simultaneous webcast the morning of July 9 at 11:00 a.m. (ET) to discuss the results and recent corporate developments. The Company's Chairman, CEO and President Angelo Morini and Chief Financial Officer Cindy Hunter will be on the call.

The live webcast can be accessed by logging onto www.galaxyfoods.com at 11:00a.m. (ET) on July 9. Participants are requested to log on several minutes before the call begins to allow time to register and download any necessary software. A replay of the audio webcast can be accessed by logging into Galaxy's website (www.galaxyfoods.com) from July 9 to August 10.

About Galaxy Nutritional Foods, Inc.
Galaxy Nutritional Foods is a leading producer of health-promoting plant-based dairy and dairy related alternatives for the retail, foodservice and industrial markets. The Company's manufacturing process is a microbiologically safer proprietary hot-process which produces plant-based products that are low or no fat (no saturated fat), have no cholesterol, contain no lactose, are growth hormone and antibiotic free and have more vitamins and minerals than conventional dairy products. Galaxy products, available at health food stores and grocers, are part of the nutritional or functional food category, the fastest growing segment of the retail food market. Galaxy brand names include Veggie Milk™, Veggie Slices™, formägg®, Soyco®, Soymage®, Wholesome Valley™, Lite Bakery®, Veggie Café™ and Veggie Lite Bakery®. For more information please visit the Company's web site at www.galaxyfoods.com.

About Tropicana Products
Tropicana Products, Inc., a division of PepsiCo, Inc., is the world's leading producer and marketer of branded fruit juices. Based in Bradenton, Florida, Tropicana markets its products in the U.S. under a number of brand names, including: Tropicana Pure Premium Original, Grovestand and HomeStyle juices; Tropicana Pure Premium Calcium & Extra Vitamin C, and Double Vitamin C with Vitamin E nutritionally enhanced juices; Dole juices and juice blends; Tropicana Season's Best and Pure Tropics juices; and Tropicana Twister juice beverages. The Dole brand name is licensed from Dole Food Company, Inc.

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, or other factors which may cause actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect unanticipated events or developments.