SCHEDULE 14A INFORMATION

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Fresh Brands, Inc.
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(Name of Registrant as Specified in its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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FRESH BRANDS, INC.
[GRAPHIC OMITTED] 2215 Union Avenue
Fresh Brands Inc. Sheboygan, Wisconsin 53081
Building Strong Supermarket Brands

NOTICE OF 2002 ANNUAL
MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 2002

Dear Fellow Shareholder:

We invite you to attend our 2002 annual meeting of shareholders on May 22,
2002 at 3:00 P.M. in the Lake Michigan Room of the American Club, located at
Highland Drive in Kohler, Wisconsin. A map is provided on the following page to
assist you in locating the American Club.

As we describe in our accompanying proxy statement, if you held shares of
our common stock on March 15, 2002, you will be entitled to vote at the annual
meeting on the election of three directors and any other business that may
properly come before our annual meeting.

We have enclosed a proxy card and our 2001 annual report along with this
proxy statement. Your vote is important, no matter how many shares you own. Even
if you plan to attend our annual meeting, please complete, date and sign the
proxy card and mail it as soon as you can in the envelope provided. If you
attend the annual meeting, you can revoke your proxy and vote your shares in
person if you like.

Thank you for your continued support. We look forward to seeing you at our
annual meeting.

Sincerely,
FRESH BRANDS, INC.

/s/ Armand C. Go

Armand C. Go
Vice President, Chief Financial Officer,
Treasurer and Secretary
Sheboygan, Wisconsin
April 12, 2002

Important Information for Shareholders Attending
The Fresh Brands, Inc. 2002 Annual Meeting

3:00 p.m.
Wednesday, May 22, 2002
The American Club
444 Highland Drive
Kohler, Wisconsin

[Map]

DIRECTIONS:

From the Milwaukee area via I-43:
Exit at Highway 23 (Exit 126) and proceed west 2/3 of a mile to Highway Y,
then south (right) on Highway Y to the American Club.

From the North via I-43:
Exit at Highway 23 (Exit 126) and proceed west to Highway Y,
then south (right) on Highway Y to the American Club.

FREQUENTLY ASKED QUESTIONS

Q: Why did I receive this proxy statement?

Our board of directors has sent you this proxy statement starting on or
about April 12, 2002 to ask for your vote, as a Fresh Brands shareholder,
on certain matters to be voted on at our upcoming annual shareholders'
meeting.

Q: What am I voting on?

You will vote on the election of three directors. Our board of directors is
not aware of any other matter that will be presented for your vote at the
annual meeting.

Q: Do I need to attend the annual meeting in order to vote?

No. You can vote either in person at the annual meeting or by completing
and mailing the enclosed proxy card.

Q: What happens if I sign and return my proxy card but do not mark my vote?

If you return a signed proxy card without indicating whether you wish to
vote for or against the proposals, Walter G. Winding and Elwood F. Winn, as
proxies, will vote your shares to elect the board's nominees for directors.

Q: What percentage of Fresh Brands' votes do directors and officers own?

Approximately 7.5% of our shares in total, as of the record date, are
controlled by our directors and officers. See below for more details.

Q: Who is entitled to vote?

You are entitled to vote at the annual meeting if you owned shares as of
the close of business on the March 15, 2002 record date. You will be
entitled to one vote for each share of our common stock you owned on the
record date.

Q: Who will count the votes?

U.S. Bank, N.A., our transfer agent and registrar, will count the votes and
act as inspector of elections at the annual meeting. The address for the
transfer agent and registrar is Corporate Trust Department, 1555 North
Rivercenter Drive, Suite 301, Milwaukee, Wisconsin 53212.

Q: How many shares of Fresh Brands' stock are entitled to vote?

A total of 5,163,737 shares of common stock will be entitled to vote at the
annual meeting.

Q: What is the address and telephone number of Fresh Brands?

The address of the principal executive office of Fresh Brands, Inc., is
2215 Union Avenue, Sheboygan, Wisconsin 53081 and its phone number is (920)
457-4433.

Q: What constitutes a quorum?

A "quorum" refers to the number of shares that must be in attendance at a
meeting to lawfully conduct business. A majority of the shares of our
common stock entitled to be cast will represent a quorum. As a result, at
least 2,581,869 shares must be present at the annual meeting before we can
take the actions called for at the meeting.

FREQUENTLY ASKED QUESTIONS

Q: Who are the largest shareholders?

Investors holding 5% or more of our outstanding common stock are:

1) Franklin Resources, Inc. - 14.7%

2) Fresh Brands Distributing, Inc. Retirement Savings Plan - 14.6%

3) FMR Corp. - 7.6%

4) Delphi Management, Inc. - 7.2%

5) Dimensional Fund Advisors,
Inc. - 6.9%

6) Frank Russell Company - 6.3%

Q: What do I need to do now?

Just mail your signed proxy card in the enclosed postage-paid return
envelope as soon as possible, so that your shares may be represented at the
annual meeting. The meeting will take place on May 22, 2002, at 3:00 P.M.
in the Lake Michigan Room of the American Club, located on Highland Drive
in Kohler, Wisconsin.

Q: Can I revoke my proxy after it is returned?

Yes, you may revoke your proxy at any time before it is exercised by giving
notice thereof to the company in writing or in open meeting. If you have
executed a proxy and attend the annual meeting, your presence at the annual
meeting does not, in itself, revoke your proxy.

ELECTION OF DIRECTORS

At the annual meeting, shareholders will elect three directors to hold
office until the annual meeting held in 2005. The board has nominated Martin
Crneckiy, Jr., R. Bruce Grover and Elwood F. Winn, each of whom currently serves
as a shareholder-elected director. Walter G. Winding and Elwood F. Winn, as
proxies, intend to vote for the election of all of the board's nominees. They
will also vote for another person that our board may recommend in the event that
a nominee becomes unable to serve as a director before the annual meeting.

Under Wisconsin law, shareholders elect directors by a plurality of the
votes cast. This means that the nominees receiving the largest number of votes,
even if less than a majority, will be elected as directors. Any shares that are
not voted, whether by abstention, broker non-vote or otherwise, will not affect
the election of directors.

Our board of directors recommends a vote for Martin Crneckiy, Jr., R. Bruce
Grover and Elwood F. Winn.

The tables set forth below list certain information about our board of directors and the board committees on which
our directors serve, as well as how many times the board and each committee met in 2001.

Class I - Nominees for Election at the Annual Meeting

- --------------------------------------------------------------------------------------------------------------------------
Stock Strategic
Executive Nominating Audit Compensation Option Planning
Board Member Board Committee Committee Committee Committee Committee Committee
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------

Martin Crneckiy, Jr. (56), a director since
1989; Executive Vice President of The
Vollrath Company, L.L.C. - a manufacturer of X X X* X X X
stainless steel and plastic wares and light
equipment for the international food service
industry
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
R. Bruce Grover (66), a director since 1989;
President and Chief Executive Officer of VPI,
LLC - a manufacturer of solid vinyl floor X X X X* X*
products, custom extruded sheets and sound
barrier materials for automotive applications
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
Elwood F. Winn (51), a director since 2000;
President and Chief Executive Officer(1) X X* X
- --------------------------------------------------------------------------------------------------------------------------

Class II - Directors Whose Terms Expire in 2003

Michael R. Houser (50), a director since
1992; Vice Chairman of the Board, Executive X X
Vice President and Chief Marketing Officer(1)
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
Bruce J. Olson (52), a director since 1999;
Group Vice President and a director of The
Marcus Corporation - owner and operator of X X X X X*
limited service lodging inns, hotels, resorts
and movie theatres
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
Walter G. Winding (60), a director since
1999; Chairman of the Board; owner and Chief X* X X* X X
Executive Officer of Winding and Company - a
business consulting firm
- --------------------------------------------------------------------------------------------------------------------------

Class III - Directors Whose Terms Expire in 2004

William K. Jacobson (51), a director since
1996; Senior Vice President - Retail
Operations and Development and Assistant X X
Secretary of Fresh Brands Distributing, Inc.,
one of our subsidiaries(1)
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
Steven R. Barth (43), a director since 1998;
Partner in the law firm of Foley & Lardner X X X X
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
G. William ("Bill") Dietrich (56), a director
since 2001; President, Chief Executive
Officer and director of Onyx North America
Corp. - provides a variety of environmental X X X X X X
services, including waste collection,
transfer, recycling and disposal services
- --------------------------------------------- ----- --------- ---------- --------- ------------ --------- ---------
Meetings held in 2001 7 21 2 2 5 2 2
- --------------------------------------------------------------------------------------------------------------------------
* Denotes Chairman

1) Because the company operates as a holding company, Messrs. Winn, Houser and Jacobson are also directors and
officers of certain of the company's subsidiaries.

All of our directors have held the positions indicated on the preceding
charts for at least the last five years, except that:

o All references to service as a director or officer prior to June 2001
are to service as a director or officer of Schultz Sav-O Stores, Inc.
(now Fresh Brands Distributing, Inc.). Schultz Sav-O Stores, Inc. was
our predecessor prior to the creation of our holding company structure
in June 2001;

o William K. Jacobson was our Senior Vice President - Retail Operations
from March 1996 until June 1998;

o Michael R. Houser was our Senior Vice President - Marketing and
Merchandising from April 1991 until January 1998, became our Executive
Vice President in January 1998, became our Chief Marketing Officer in
May 2000 and became our Vice Chairman of the Board in December 2000;

o Elwood F. Winn was President and Chief Executive Officer of Certified
Grocers Midwest Inc. ("CGM") from February 1992 to October 1998, a
consultant to CGM from October 1998 until September 1999, our Senior
Vice President - Strategic Planning from September 1999 until May 2000
and our Executive Vice President, Chief Financial Officer and
Secretary from May 2000 until December 2000; and

o Walter G. Winding, who serves as an independent director and Chairman
of the Board, became our Chairman of the Board in December 2000.

The Executive Committee

The Executive Committee acts on behalf of the board between board meetings
to the extent allowed by Wisconsin law. Under Wisconsin law, the Executive
Committee may not:

o authorize distributions to our shareholders;

o approve any action that requires shareholder approval under Wisconsin
law;

o recommend to shareholders any action that requires shareholder
approval under Wisconsin law;

o fill vacancies on our board of directors;

o fill vacancies on any committee of our board of directors, except the
Executive Committee;

o amend our articles of incorporation;

o adopt, amend or repeal our bylaws;

o approve a plan of merger that does not require shareholder approval
under Wisconsin law;

o authorize or approve the reacquisition of shares of our stock, except
according to a formula or method adopted by our board of directors; or

o except as authorized to do so within prescribed limits by our board of
directors, (i) authorize or approve the issuance or sale of our stock,
(ii) enter into a contract to issue or sell our stock, or (iii)
determine the designation and relative rights, preferences or
limitations of a class or series of shares of our stock.

The Nominating Committee

The Nominating Committee's principal functions include:

o recommending criteria for board members;

o identifying prospective candidates for board membership; and

o recommending candidates for each of the board's committees.

The Nominating Committee recommends and the board selects the director
nominees to stand for election at the company's annual meetings of shareholders
and to fill vacancies occurring on the board. The Nominating Committee will
consider nominees recommended by shareholders, but has no established procedures
which shareholders must follow to make a recommendation. Our bylaws also provide
for shareholder nominations of candidates for election as directors. These
provisions require such nominations to be made pursuant to timely notice (as
specified in the bylaws) in writing to our secretary. The shareholder's notice
must contain information relating to the nominee which is required to be
disclosed by the company's Bylaws and the Securities Exchange Act of 1934.

The Audit Committee

All of the members of our Audit Committee are "independent directors," as
defined by the Nasdaq rules applicable to members of our Audit Committee. The
Audit Committee's principal functions include:

o annually recommending a firm of independent public accountants to act
as our auditing firm for the coming year;

o reviewing areas of financial risk that could have a material adverse
effect on our results of operations and financial condition with our
principal accounting officers and independent public accountants;

o reviewing annual audit plans with our principal accounting officers
and independent public accountants;

o reviewing our policies as to officers' conflicts of interest with our
principal accounting officers and independent public accountants;

o reviewing plans to engage our independent public accountants for any
non-audit professional services;

o obtaining from our independent public accountants a written statement
of the non-auditing relationships between the auditors and the
company;

o reviewing the company's and independent public accountants'
evaluations regarding the independence of our public accountants; and

o reviewing, in consultation with our principal accounting officers and
independent public accountants, financial reporting and accounting
practices of comparable companies that differ from our own.

The Compensation Committee

The Compensation Committee's principal functions include:

o evaluating and setting cash compensation levels for our officers;

o reviewing and establishing the employee benefits we offer to our
officers;

o determining our officers' annual bonuses; and

o reviewing our compensation policies for board members who are not
employees.

The Stock Option Committee

The Stock Option Committee's principal functions include:

o evaluating and granting stock options and other equity incentives to
our directors, officers and other employees; and

o administering our equity incentive plans.

The Strategic Planning Committee

The Strategic Planning Committee works closely with our key management
personnel to review the development and execution of our long- and short-term
strategic goals and plans. The Strategic Planning Committee meets with our key
management personnel at least once a year to review the progress we have made
toward attaining these plans and goals.

In 2001, under the direction and guidance of our Strategic Planning
Committee, our management undertook a comprehensive review of the company's
strategic plans and developed our plan to increase shareholder value over the
long-term by aggressively growing the company by acquiring additional brands and
expanding our geographic reach to increase shareholder value over the long-term.
The Strategic Planning Committee met with our management twice during 2001 to
review and provide feedback regarding our plans and goals as they were being
developed.

Stock Ownership of Management and Others

The following table describes certain information, as of the record date,
regarding the beneficial ownership of our common stock held by:

o each person or entity that we know beneficially owns more than 5% of
our common stock;

o each of our directors and those of our executive officers who are
named in the Summary Compensation Table under "Summary Compensation
Information;" and

o all of our directors and named executive officers as a group.

We believe that, as of the record date, all of the people listed below have
sole voting and investment power over the listed shares, except as indicated
otherwise in the accompanying footnotes.

Name of Individual or Entity Shares Percentage(1)
---------------------------- ------ -------------

Franklin Resources, Inc.(2) 758,100 14.7%
Fresh Brands Distributing, Inc.
Retirement Savings Plan(3) 751,771 14.6%
FMR Corp.(4) 392,100 7.6%
Delphi Management, Inc.(5) 371,250 7.2%
Dimensional Fund Advisors Inc.(6) 355,050 6.9%
Frank Russell Company(7) 325,650 6.3%
Michael R. Houser(8) 120,061 2.3%
William K. Jacobson(9) 91,900 1.8%
Thomas J. Timler(10) 46,006 *
Elwood F. Winn(11) 40,405 *
Armand C. Go(12) 22,022 *
Walter G. Winding(13) 21,810 *
Martin Crneckiy, Jr.(14) 18,085 *
R. Bruce Grover(15) 15,085 *
G. William Dietrich(16) 12,564 *
Bruce J. Olson(17) 11,693 *
Steven R. Barth 5,375 *

All current directors and executive
officers as a group (11 persons)(18) 405,006 7.5%
--------------------------------------
* Indicates less than 1%

1. For individuals who hold rights to acquire shares of stock upon
exercise of stock options, the percentages indicated reflect inclusion
of certain of these shares as described in the appropriate footnotes
below as well as the increase in the total number of shares of common
stock outstanding that would result from their exercise of those
options.

2. We obtained the share amount listed from the Schedule 13G, dated
February 14, 2002, filed with the SEC. The address of Franklin
Resources, Inc. is One Franklin Parkway, San Mateo, California 94403.

3. We obtained the share amount listed from the Schedule 13G, dated
February 13, 2002, filed by the Fresh Brands Distributing, Inc.
Retirement Savings Plan with the Securities and Exchange Commission.
The listed shares were held by Marshall & Ilsley Trust Company
("M&I"), as trustee for our Retirement Savings Plan. Retirement
Savings Plan participants have investment power over the listed shares
held by the Retirement Savings Plan that are allocated to their
accounts. A Plan Administrative Committee, consisting of William K.
Jacobson, Armand C. Go, Michael G. Isken and Nadine A. Becker,
administers the Retirement Savings Plan and shares voting power for
the shares listed with the participants in the Retirement Savings Plan
in that the Plan Administrative Committee is entitled to vote shares
when participants have provided no voting instructions. The address of
M&I is 770 North Water Street, Milwaukee, Wisconsin 53202. The address
for the individual members of the Plan Administrative Committee is c/o
Fresh Brands, Inc., 2215 Union Avenue, Sheboygan, Wisconsin 53081. See
"Executive Compensation--Report on Executive Compensation."

4. We obtained the share amount listed from the amended Schedule 13G,
dated February 14, 2002, filed with the SEC. The address of FMR Corp.
is 82 Devonshire Street, Boston, Massachusetts 02109.

5. We obtained the share amount listed from the Form 13F, dated April 1,
2002, filed with the SEC. The address of Delphi Management, Inc. is 50
Rowes Wharf #540, Boston, Massachusetts 02110.

6. We obtained the share amount listed from the amended Schedule 13G,
dated January 30, 2002, filed with the SEC. The address of Dimensional
Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica,
California 90401.

7. We obtained the share amount listed from the Form 13F, dated January
25, 2002, filed with the SEC. The address of Frank Russell Company is
909 A Street, Tacoma, Washington 98402.

8. The share amount listed includes (a) 33,233 shares allocated to Mr.
Houser's account in the Retirement Savings Plan as of December 29,
2001; (b) 74,333 shares covered by stock options that will be
exercisable within 60 days following the record date; and (c) 1,080
shares held as joint tenant with his wife.

9. The share amount listed includes (a) 48,900 shares allocated to Mr.
Jacobson's account in the Retirement Savings Plan as of December 29,
2001; and (b) 43,000 shares covered by stock options that will be
exercisable within 60 days following the record date.

10. The share amount listed includes (a) 11,890 shares allocated to Mr.
Timler's account in the Retirement Savings Plan as of December 29,
2001; and (b) 33,000 shares covered by stock options that will be
exercisable within 60 days following the record date.

11. The share amount listed includes (a) 2,072 shares allocated to Mr.
Winn's account in the Retirement Savings Plan as of December 29, 2001;
and (b) 38,333 shares covered by stock options that will be
exercisable within 60 days following the record date.

12. The share amount listed includes (a) 689 shares allocated to Mr. Go's
account in the Retirement Savings Plan as of December 29, 2001; and
(b) 21,333 shares covered by stock options that will be exercisable
within 60 days following the record date.

13. The share amount listed includes (a) 18,333 shares which Mr. Winding
can acquire by exercising stock options that will be exercisable
within 60 days following the record date; and (b) 1,784 shares held as
joint tenant with his wife.

14. The share amount listed includes (a) 10,000 shares which Mr. Crneckiy
can acquire by exercising stock options that will be exercisable
within 60 days following the record date; and (b) 3,600 shares held as
joint tenant with his wife.

15. The share amount listed includes 10,000 shares which Mr. Grover can
acquire by exercising stock options that will be exercisable within 60
days following the record date.

16. The share amount listed includes 10,000 shares which Mr. Dietrich can
acquire by exercising stock options that will be exercisable within 60
days following the record date

17. The share amount listed includes 10,000 shares which Mr. Olson can
acquire by exercising stock options that will be exercisable within 60
days following the record date.

18. The share amount listed includes 268,332 shares issuable under stock
options exercisable within 60 days of the record date and 96,784
shares beneficially held by the named executive officers in the
Retirement Savings Plan as of December 29, 2001.

AUDIT COMMITTEE REPORT

Our management is responsible for the company's financial reporting
process, including its system of internal controls, and for the preparation of
the Company's consolidated financial statements in accordance with generally
accepted accounting principles. The company's independent auditors in 2001,
Arthur Andersen, were responsible for auditing those financial statements. Our
responsibility is to monitor and review these processes. It is not our duty or
our responsibility to conduct auditing or accounting reviews or procedures. We
are not employees of the company and we are not accountants or auditors by
profession or experts in the fields of accounting or auditing. Therefore, we
have relied, without independent verification, on management's representation
that the Company's financial statements have been prepared with integrity and
objectivity and in conformity with generally accepted accounting principles. We
have also relied on the representations of Arthur Andersen included in its
report on the company's 2001 financial statements. Our discussions with
management and Arthur Andersen do not assure that the company's financial
statements are presented in accordance with generally accepted accounting
principles, that the audit of the company's financial statements has been
carried out in accordance with generally accepted auditing standards or that
Arthur Andersen is in fact "independent."

Our Audit Committee reviewed and discussed the company's 2001 audited
financial statements with Arthur Andersen and the company's management. In
connection with this review and discussion, our Audit Committee separately
discussed with the company's management and independent auditors the quality and
adequacy of the company's internal controls. We also discussed with Arthur
Andersen all communications required by Statement on Auditing Standards No. 61
(SAS 61). SAS 61 requires independent auditors to communicate to audit
committees matters related to the conduct of the audit, including: (a) the
selection of, and changes in, significant accounting policies; (b) the methods
used to account for significant unusual transactions; (c) the effect of
significant accounting policies in controversial or emerging areas; (d) the
process used by management in formulating particularly sensitive accounting
estimates and the basis for the auditors' conclusion regarding the
reasonableness of those estimates; (e) significant adjustments arising from the
audit; (f) disagreements with management over the application of accounting
principles; (g) the basis for management's accounting estimates; and (h) the
disclosures in the financial statements. Arthur Andersen reported to our
Committee that, based on its audit procedures, it believed that the company's
internal controls are adequate and sufficient.

Our Committee also received a written report and a letter from Arthur
Andersen disclosing all relationships between the company and Arthur Andersen
that, in its professional judgment, may reasonably be thought to bear on its
independence. Arthur Andersen's letter advised our Committee that it provided
$134,500 of audit services to the company in 2001. Arthur Andersen's letter
further advised our Committee that it provided about $19,000 of management
information systems design and implementation consulting services to the company
in 2001. Finally, Arthur Andersen's letter advised our Committee that it
provided $322,000 of other services to the company in 2001, including services
provided in connection with the company's acquisition due diligence, benefit
plan audits, accounting consultation, tax advice and assistance with
registration statements and consents. Arthur Andersen discussed its letter with
the Committee and advised the Committee that it did not believe its audit was
impaired by its provision of such other non-audit related services, particularly
in view of the relationship of the related fees to its annual revenues. As a
result, Arthur Andersen confirmed that, as of February 28, 2002, it was an
independent accountant with respect to the company within the meaning of the
Securities Act administered by the SEC and the requirements of the Independence
Standards Board. We considered whether Arthur Andersen's provision of non-audit
services was compatible with maintaining its independence with respect to the
company. Based on our discussions with management and Arthur Andersen, as well
as our review of the representations of management and the report of Arthur
Andersen to us, we recommended to the Board of Directors that the company's
audited consolidated financial statements at and for the year ending December
29, 2001 be included in the company's Annual Report on

Form 10-K for its fiscal year ended December 29, 2001 filed with the Securities
and Exchange Commission.

In light of the recent public controversy, government investigations and
indictment, and litigation resulting from the bankruptcy of Enron Corp. and
Arthur Andersen's role in providing audit and non-audit services to Enron, as
well as the subsequent actions allegedly taken by the Houston office of Arthur
Andersen, both our Board of Directors and Audit Committee carefully evaluated
whether or not to retain Arthur Andersen as the company's independent auditors
in 2002. These evaluations took place at our Audit Committee meetings on
December 13, 2001 and February 28, 2002 and at our Board of Directors meetings
on December 13, 2001, January 30, 2002 and March 12, 2002. After careful
consideration at these various meetings, both our Board and Committee decided to
retain Arthur Andersen as the company's independent auditors for 2002. At the
time we made these decisions, we believed that the representatives of the
Milwaukee office of Arthur Andersen who provide audit and non-audit services to
the company possess a very high degree of integrity, experience and expertise;
possess indepth knowledge of our company and its industry; and provide
significant value-added advice and guidance to our company, management and Board
of Directors. However, our Board of Directors, Audit Committee and management
realize that the future of Arthur Andersen is, as of the date of this report,
subject to a high degree of speculation and uncertainty. As a result, we may
determine that, depending upon the nature, scope and implications of subsequent
further developments with respect to Arthur Andersen's future, it may be in the
best interests of our company and its shareholders to retain another public
accounting firm to serve as the company's independent auditors. Our Board of
Directors has authorized our management to prepare a contingency plan and
selection and evaluation process for exploring the retention of another auditing
firm if and when our Board decides that such action is in the best interests of
our company and its shareholders. Moreover, as a result of these highly unusual
and rapidly evolving circumstances, and in order not to limit its alternatives,
our Board decided not to submit its reappointment of Arthur Andersen as the
company's 2002 independent auditors for shareholder ratification at the upcoming
annual shareholders meeting. At the annual meeting, we will update you on the
then current situation with respect to our independent auditors.

Also, as a result of the recent additional SEC guidance and public comment
on audit committee practices, we took action at our Committee meeting on
February 28, 2002 to recommend certain amendments to our Audit Committee
charter, which were unanimously approved by our Board at its meeting on March
12, 2002. Our amended charter is attached to this proxy statement. Our Committee
and Board also decided that, because Mr. Barth's firm and Mr. Winding provide
ongoing services to the company, in order to avoid any potential appearance of a
conflict of interest arising from their continued role as both serving on our
Audit Committee and acting as ongoing service providers to the company, Mr.
Barth voluntarily withdrew as our Committee's Chairman (although he will remain
on the Committee as a member) and Mr. Winding voluntarily stepped down from the
Committee. Based on the unanimous recommendation of our Committee, Mr. Crneckiy
was unanimously appointed by our Board as our new Audit Committee Chairman.

This report and the information herein do not constitute soliciting
material and shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing by or
of the company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under
such Acts.

By the Audit Committee:

Martin Crneckiy, Jr., Chairman
Steven R. Barth
G. William Dietrich
R. Bruce Grover

EXECUTIVE COMPENSATION

Our Compensation Committee of the Board of Directors evaluates and
establishes the compensation of our executive officers. As part of our ongoing
efforts to help ensure that our executive compensation policies are as effective
as possible in achieving the company's goals and objectives, in 2001 we
conducted an extensive review and analysis of our overall executive compensation
philosophies, strategies, goals and objectives, as well as of each of the
various elements of our executive compensation package. We retained an outside
executive compensation specialist to assist us in our analysis, help us compare
our compensation policies and packages to those of our peers and other similar
companies and provide us with his advice and recommendations. As part of this
process, we analyzed and discussed information regarding the salaries, bonuses,
stock option grants and other compensation and benefits received by the
executive officers of other publicly-traded food wholesalers and retailers and
other similarly situated companies. Based on our analysis and evaluation, and
the advice and recommendations of our executive compensation specialist, we made
several changes to our executive compensation program effective beginning in
2002.

Our executive compensation package consists of four principal components:
base salary, annual incentive bonus eligibility, annual stock option grants, and
other complimentary compensation and employee benefits. As part of our
comprehensive executive compensation review, we focused on structuring each
individual component of the company's executive compensation - as well as the
company's entire executive compensation package - in a manner that more closely
aligned the economic interests of our management with the economic interests of
our shareholders. We did this by making a substantial part of the company's
executive compensation package dependent upon its achievement of specific annual
corporate financial performance objectives, and by tying our executives'
long-term compensation potential to future increases in the company's stock
price. Since we are firm believers in performance-based compensation, we decided
that this philosophy could best be implemented by establishing combined annual
salary and bonus levels at amounts designed to be above relative median market
compensation levels when the company's financial performance meets or exceeds
our targeted objectives, and below median market compensation levels when the
company's financial performance does not meet our targets. Additionally, by
making stock option grants the principal long-term component of our executive
compensation package, we believe we've directly linked our executives'
realization of benefits from these option grants to future increases in the
intrinsic value of our company. At least conceptually, we believe that
shareholder value should be driven principally by the company achieving its
targeted financial performance goals.

Finally, as a result of our compensation review, we adopted the following
new formal executive compensation policy:

Our executive compensation program is designed to:

o attract, retain and motivate key officers;

o encourage a focus on strategic objectives which will result in
superior current and long-term financial performance;

o compensate officers above median market levels when financial
performance is superior and below median market levels when financial
performance is below the peer group;

o link long-term incentives to increasing shareholder value; and

o allow consideration of the positive or negative effects of
extraordinary events on financial performance.

Salary

Base salary is the largest portion of the cash compensation package
received by each of our executives. After extensive analysis and consideration,
and consistent with our executive compensation philosophy, beginning in fiscal
2002, we have set each executive's salary at or below the midpoint of the salary
range paid to similarly situated executives at comparable companies. We decided
that, by establishing annual base salaries at these relatively low levels, if
the company does not achieve its targeted annual financial goals, then our
executives will receive below market level cash compensation.

Last year, in setting each executive's 2001 salary, we previously
considered, among other things, the executive's (i) duties and responsibilities;
(ii) past performance at the company; and (iii) experience in our industry, as
well as the salaries paid by our peers to executive officers with similar
experience and responsibilities. In addition to these factors, we based the 2001
salary of Elwood F. Winn, our President and Chief Executive Officer, on his
increased duties and responsibilities that accompanied his then new promotion to
these executive positions, particularly in contrast to the substantially higher
salary that had been paid to the company's former President, Chief Executive
Officer and Chairman of the Board.

Annual Bonus

As a result of our comprehensive review of our executive compensation
package, we made several changes to the manner in which annual bonuses will be
determined in the future. Beginning in 2002, each of our executive officers will
be eligible to receive an annual cash bonus equal to a preestablished percentage
of his base salary. These eligibility percentages range from 20% to 50% of the
executive's base salary. Because we believe that the amount of annual bonuses
should be directly linked to the company's achievement of its annual financial
performance targets (which, in turn, we believe should fundamentally translate
into increased shareholder value), we decided that 80% of each executive's
potential bonus eligibility will be dependent upon whether the company meets or
exceeds our preestablished annual earnings per share before tax goal for that
year. Generally, this portion of each executive's potential bonus will not be
paid unless the company's earnings per share before tax target is met or
exceeded. However, we may decide to pay some or all of this eligible bonus
amount if we determine that the company's earnings per share before tax target
was not met as a result of extraordinary or unusual circumstances beyond the
company's control. Additionally, if the company substantially exceeds its
earnings per share before tax target, we may decide to increase the amount of
bonuses paid to some or all of our executives. The remaining potential 20% of
each executive's bonus eligibility will be dependent upon whether other specific
predetermined individual and company goals and objectives have been met by the
executive, as well as other subjective factors that we believe are appropriate.

Our prior annual incentive bonus plan was used to determine 2001 bonuses,
but will not be used in 2002 or in subsequent years. Our prior bonus plan
established an annual variable bonus pool based on the company's achievement of
increased net sales and certain specified levels of "economic value added."
Economic value added was determined by calculating the difference between our
annual net operating profit after tax and a preestablished target threshold
investment return, which was based on our weighted average cost of capital. For
2001, a total bonus pool of approximately $360,000 was established under our
prior annual incentive plan, with approximately $256,000 contributed as a result
of the company's 2001 economic value added amount and approximately $104,000 as
a result of a 4.2% increase in the company's 2001 net sales over 2000 (excluding
the sales increase due to the Dick's acquisition). In accordance with the prior
bonus plan, we distributed 25% of the total bonus pool to all eligible executive
officers pro rata according to their relative salary levels. The remaining 75%
of the bonus pool was distributed based on each executive's relative achievement
of individual and group performance goals, as well as based on other subjective
factors.

We based Mr. Winn's 2001 bonus amount on (i) his prorata share of the bonus
pool established under our prior annual incentive plan; (ii) the degree to which
he achieved his individual goals and objectives; (iii) the degree to which the
company achieved its financial and other strategic goals and objectives
(including targeted levels of revenue, earnings and cash flow); (iv) the
successful acquisition and integration of Dick's Supermarkets; (v) the
substantial 92% increase in the company's stock price over the year from $10.75
per share to $20.61 per share; and (vi) his leadership in developing and
beginning to implement the company's new aggressive strategic growth plan.

Long-Term Incentives - Stock Options

Our Stock Option Committee, which includes all of the members of our
Compensation Committee except Steven R. Barth and Walter G. Winding, annually
grants stock options to our executives under our 1995 equity incentive plan. We
use stock option grants to supplement the annual cash portion of our executive
compensation package and to provide the long-term incentive compensation element
of our executive compensation package. Since the value of stock options is
inherently dependent upon the future market price appreciation of the company's
underlying common stock, stock options will only provide our executive officers
with economic value to the extent that the market price of the company's common
stock increases. Thus, we believe that these stock option grants help further
align the economic interests of our executive officers with those of our
shareholders. We have historically granted options at 100% of the fair market
value of the company's common stock's on the date of grant, with a term not to
exceed ten years and with vesting in increments of one-third on each of the
first, second and third anniversaries of the grant date.

As a result of our comprehensive executive compensation review, our Stock
Option Committee made several changes to our approach to determining the number
of shares subject to each executive officer's annual stock option grant.
Although not determinative, each executive officer's relative salary will serve
as a base guideline for the number of shares subject to his annual option grant.
We also intend to concentrate the relative size of option grants on the officers
who we believe will have the greatest impact upon the company's future financial
performance. In addition, our Stock Option Committee intends to continue to
carefully analyze the total number of shares made subject to stock options
granted each year to ensure that the goals of the 1995 equity incentive plan are
realized without unnecessarily diluting our current shareholders. Finally, when
determining the relative size of each officer's stock option grant, our Stock
Option Committee will have broad discretion to consider a variety of other
factors, including the factors listed below that influenced the options that
were granted in 2001, as well as other subjective factors.

Last year, our Stock Option Committee based its 2001 stock option grants
principally on each executive officer's (i) relative position at the company;
(ii) increases (if any) in duties and responsibilities; (iii) existing and
anticipated ability to directly impact corporate performance; (iv) relative
level of cash compensation; (v) seniority; (vi) prior levels of stock option
grants; (vii) options then currently held; and (viii) direct stock ownership.
Each executive officer's individual initiatives and achievements over the prior
year also affected the level of each officer's option grant.

We believe that our 1995 equity incentive plan has been adopted, and is
being administered, in accordance with the requirements of Internal Revenue Code
Section 162(m). Given the levels of compensation and benefits provided currently
to our executive officers, we do not otherwise believe it is necessary to
further conform or adjust our compensation policies, plans or practices to
comply with the $1 million executive compensation deductibility cap imposed by
Internal Revenue Code Section 162(m).

Other Compensation

Our retirement savings plan is a qualified profit sharing plan that
provides for supplemental income at retirement for all eligible salaried
employees of Fresh Brands Distributing, Inc., one of our wholly-owned
subsidiaries. The retirement benefits provided by the retirement savings plan
for each participant are based upon the value of the participant's account
balance at retirement. The retirement savings plan requires us to make an annual
basic contribution which, when added to forfeitures for the year, is equal to 5%
of the participant's salary for the year. We may also make an additional
discretionary contribution as determined by our Board. Basic contributions to
each participant's account are allocated on the basis of the participant's
eligible compensation compared to the compensation of all participants for such
year. Discretionary contributions are allocated in the same way, except that
contributions to Social Security benefits are taken into account in the
allocation of discretionary contributions. The discretionary contribution to the
retirement savings plan in 2001 was approximately 8.0% of each participant's
eligible compensation. The retirement savings plan permits pretax employee
contributions pursuant to Internal Revenue Code Section 401(k). We provide a 25%
matching contribution on pretax employee contributions up to 4% of pay. Most of
our executive officers - including all of the named executive officers set forth
below - have invested all, or a substantial portion, of their annual retirement
savings plan allocations in shares of our common stock. At the end of 2001, our
five executive officers named below, as a group, beneficially held 110,395
shares, or approximately 2.11% of our total outstanding common stock on the
record date, in their accounts under the retirement savings plan. See "Stock
Ownership of Management and Others." As part of our comprehensive executive
compensation review, we studied the terms of our retirement savings plan and
decided not to make any changes.

We also maintain an executive benefit restoration plan, which is a
supplemental benefit pension plan intended to provide benefits otherwise denied
to participants under the retirement savings plan by reason of limitations
imposed by the Internal Revenue Code. The executive benefit restoration plan
provides benefit accruals on pay in excess of the amount able to be recognized
by the retirement savings plan equivalent to the rate of our basic and
discretionary contributions made under the retirement savings plan for the year.
As part of our comprehensive executive compensation review, we studied the terms
of our executive benefit restoration plan and decided not to make any changes.

This report, the information herein and the performance graphs included
elsewhere in this proxy statement do not constitute soliciting material and
shall not be deemed to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing by or of the
company under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, and shall not otherwise be deemed filed under such
Acts.

By the Compensation Committee: By the Stock Option Committee:

R. Bruce Grover, Chairman R. Bruce Grover, Chairman
Martin Crneckiy, Jr. Martin Crneckiy, Jr.
G. William Dietrich G. William Dietrich
Bruce Olson Bruce Olson
Walter Winding
Steven R. Barth

Summary Compensation Information

The table below describes the compensation paid for the last three years to
our current Chief Executive Officer and the four most highly compensated current
officers of the company or one of its subsidiaries (other than the Chief
Executive Officer).

Summary Compensation Table

Annual Shares
Compensation Underlying
Fiscal ------------------- Stock Option All Other
Name and Principal Positions Year Salary Bonus Grants(1) Compensation(2)
- ---------------------------- ------ ------------------- ------------ ---------------

Elwood F. Winn (3) 2001 $275,000 $118,000 100,000 $58,822
President and Chief Executive Officer 2000 $162,923 $ 76,000 7,500 $19,500
1999 $ 40,382 $ 6,000 -0- -0-

Michael R. Houser 2001 $250,000 $107,000 75,000 $48,523
Vice Chairman of the Board, Executive Vice 2000 $172,000 $ 75,000 20,000 $41,013
President and Chief Marketing Officer 1999 $172,000 $ 83,000 18,000 $38,683

William K. Jacobson 2001 $135,000 $ 42,000 20,000 $21,136
Senior Vice President - Retail Operations and 2000 $120,000 $ 40,000 14,000 $21,700
Development of Fresh Brands Distributing, Inc. 1999 $120,000 $ 46,000 13,500 $22,312

Armand C. Go 2001 $110,000 $ 31,000 10,000 $16,239
Vice President, Chief Financial Officer, 2000 $ 80,697 $ 32,000 9,000 $13,625
Treasurer and Secretary 1999 $ 78,750 $ 30,000 6,000 $12,444

Thomas J. Timler 2001 $110,000 $ 28,000 12,000 $16,199
Vice President and Chief Information Officer 2000 $ 92,000 $ 31,000 12,000 $17,408
of Fresh Brands Distributing, Inc. 1999 $ 92,000 $ 42,000 10,500 $16,607

- ---------------------

1) Granted at 100% fair market value on the date of grant. See footnote 1) to the table set forth under "Stock
Options--Option Grants in 2001" below for additional information.

2) For Messrs. Winn, Houser and Jacobson amounts set forth for 2001 under this column represent (a) benefit
accruals of $39,322, $29,023 and $686, respectively, under our Executive Benefit Restoration Plan, and (b)
our contributions of $19,500, $19,500 and $20,500, respectively, under our Retirement Savings Plan for each
such executive officer. For Messrs. Go and Timler, the amounts represent our contributions to our
Retirement Savings Plan. See "Severance and Change in Control Arrangements" below with respect to certain
severance arrangements between us and the named executive officers in the event that we experience a
"change of control."

3) Mr. Winn joined the company in September 1999.

Stock Options

The only stock option plans currently in place are our 1995 equity
incentive plan and our 2001 nonemployee director stock option plan. The 1995
plan allows us to make grants to our executive officers and other employees and
our 2001 plan provides for annual automatic grants of options to our directors
who are not our employees. The following table lists the option grants under the
1995 plan that we made during 2001, as well as certain other information
relating to those grants.

Option Grants In 2001

Percentage
of Total
Shares Options Grant
Underlying Granted to Exercise Date
Options All Employees Price (Per Present
Name Granted(1) in 2001(2) Share)(3) Expiration Date Value(4)
- ---- ---------- ------------- ---------- ----------------- --------

Elwood F. Winn 100,000 35.46% $11.625 February 12, 2011 $384,000
Michael R. Houser 75,000 26.60% $11.625 February 12, 2011 $288,000
William K. Jacobson 20,000 7.09% $11.625 February 12, 2011 $ 76,800
Armand C. Go 10,000 3.55% $11.625 February 12, 2011 $ 38,400
Thomas J. Timler 12,000 4.26% $11.625 February 12, 2011 $ 46,080

All Officers(2) 258,000 91.49%
Non-Officer
Employees 24,000 8.51%
- ---------------------

1. The options reflected in the table are nonqualified stock options under the Internal
Revenue Code. With the exception of the options granted to certain of our directors
under our 2001 Nonemployee Director Stock Option Plan, which were granted on June 4,
2001 and December 29, 2001 and an option to Robert Brodbeck granted on June 18, 2001
(which was granted in connection with our acquisition of the stock of Dick's
Supermarkets, Inc., of which Mr. Brodbeck was a shareholder) all options granted during
2001 were granted on February 12, 2001. The exercise price of each option granted
during 2001 was equal to 100% of the fair market value of our common stock on the date
of grant, as determined by our Stock Option Committee. These options become exercisable
in increments of one-third on each of the first, second and third anniversaries of the
grant date; provided, however, that no options may be exercised more than ten years
after the date of grant. These options are subject to early vesting in the event of the
optionee's death, disability or retirement. Under the stock option agreements
evidencing these options, upon a "change of control" of the company (as defined in such
stock option agreements), all options then outstanding will become immediately
exercisable in full for the remainder of their term and each optionee will have the
right, for a period of 30 days, to require us to purchase his outstanding options for
cash at an aggregate "acceleration price" for all shares of common stock then subject
to such options, provided that at least six months has elapsed since the grant date.

2. All calculations exclude the options granted under our 2001 nonemployee director stock
option plan to our Chairman of the Board (who is an officer of the company), include
options granted to officers of our subsidiaries and include the option granted to
Robert Brodbeck in connection with our acquisition of the stock of Dick's Supermarkets,
Inc.

3. The exercise price of options may be paid in cash, by delivering previously issued
shares of common stock or any combination thereof.

4. The option values presented are based on the Black-Scholes pricing model, adapted for
use in valuing stock options. The actual value, if any, that an optionee may realize
upon exercise will depend on the excess of the market price of our common stock over
the option exercise price on the date the option is exercised. There is no assurance
that the actual value realized by an optionee upon the exercise of an option will be at
or near the value estimated under the Black-Scholes model. The estimated values under
the Black-Scholes model are based on arbitrary assumptions as to variables such as
interest rates, stock price volatility and future dividend yield, including the
following: (a) an assumed United States Treasury bond rate of 5.02%; (b) stock price
volatility of 28.85% (based on 36-month stock price history ending January 31, 2001);
and (c) a current dividend yield of 2.56%.

Set forth below is certain information about the cash values realized by
named executive officers who exercised stock options during 2001 and the number
and value of unexercised stock options held by named executive officers as of
the end of fiscal 2001.

2001 Year-End Value Table

Number of Shares Value of Unexercised
Shares Underlying Options at In-the-Money Options at
Acquired End of Fiscal 2001 End Of Fiscal 2001(2)
On Value -------------------------- --------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- ----------- ----------- ------------- ----------- -------------

Elwood F. Winn 0 0 2,500 105,000 $ 16,875 $756,250
Michael R. Houser 51,600 $315,108 36,667 94,333 $147,002 $648,223
William K. Jacobson 11,400 $ 85,614 52,667 33,833 $332,132 $219,760
Armand C. Go 0 0 13,000 18,000 $ 54,250 $118,200
Thomas J. Timler 0 0 40,700 23,500 $255,286 $150,238

- --------------------------
1. The dollar value reflects the difference between the fair market value of the underlying shares at
the time of exercise and the applicable exercise price of the options exercised.

2. The dollar values reflect the difference between the fair market value of the underlying shares of
common stock at the end of fiscal 2001 and the various applicable exercise prices of the named
executive officers' outstanding options. The dollar values do not reflect any options that had an
exercise price in excess of the fair market value of the underlying shares at the end of fiscal
2001. The fair market value at the end of fiscal 2001 was $18.85, the closing sale price per share
on December 28, 2001, the last trading day of the fiscal year.

Director Compensation

Our directors who are also employees or who work for entities that perform
professional services for the company receive no additional compensation for
serving on the Board or its committees. In 2001, our qualifying outside
directors, other than the Chairman of the Board, received:

o their annual cash retainer of $6,000;

o $1,000 for each Board meeting attended and $500 for each committee
meeting attended that was not held in conjunction with a Board
meeting;

o their one-time 5,000 share stock option grant in June when our
shareholders' approved our new 2001 non-employee director stock option
plan and their annual 5,000 share stock grant on December 29, 2001;
and

o their annual grant of such number of company shares valued at $6,000
(taking into account a 10% discount for the applicable restrictions on
transfer of such shares under the securities laws).

Effective in 2002, as a result of our Compensation Committee's executive
compensation review, the following changes were made to the compensation paid to
our qualifying outside directors, other than our Chairman of the Board:

o their annual cash retainer was increased from $6,000 to $12,000;

o additional cash retainers of $4,000 were approved for the chairmen of
each of our audit and compensation committees (other than for Mr.
Barth, our current Audit Committee Chairman, who is a partner of an
entity that performs professional services for the company); and

o additional cash retainers of $2,000 were approved for the chairmen of
our other Board committees.

In 2001, Walter Winding, our Chairman of the Board, who is a non-employee
director, received:

o his annual cash retainer of $25,000;

o $1,000 for each Board meeting attended and $500 for each committee
meeting attended that was not held in conjunction with a Board
meeting;

o a one-time 5,000 share stock option grant in June when our
shareholders' approved our 2001 non-employee director stock option
plan and his annual 5,000 share stock grant on December 29, 2001;

o his annual grant of such number of company shares valued at $6,000
(taking into account a 10% discount for restrictions on transfer of
such shares under the securities laws); and

o approximately $86,700 for services performed as our Chairman of the
Board on behalf of the Board and the company and reimbursement of
related expenses (see "Certain Transactions" below for more
information).

Beginning in 2002, as a result of our Compensation Committee's executive
compensation review, our Chairman of the Board's annual retainer was increased
from $25,000 to $37,000.

Change of Control Arrangements

As part of our comprehensive executive compensation review, we reviewed the
terms of the change of control agreements we had with our executive officers. As
a result of this review, in January 2002, we replaced our existing change of
control agreements with each of Elwood F. Winn, Michael R. Houser, William K.
Jacobson, Armand C. Go and Thomas J. Timler with new change of control
agreements and entered into a new change of control agreement with Walter G.
Winding. Each of these agreements provides that, following a "change of control"
of the company (as defined in the agreements), such officer will be employed in
the same position performing equivalent duties at the same location as
immediately prior to the change of control for a length of time set forth in the
agreement (three years in the case of Messrs. Winding, Winn, Houser and Jacobson
and two years in the case of Messrs. Go and Timler). During the employment
period, each such officer would be entitled to receive a salary (or, in the case
of Mr. Winding, consulting and related fees) equal to his annual compensation
rate in effect at the date of the change of control (subject to increase by the
Compensation Committee) and inclusion in benefit plans available to employees of
comparable status.

If, at any time during the employment period, the officer's employment is
terminated other than for "cause" (as defined in the agreements) or for the
officer's disability, or if the officer's duties are changed substantially
without his written consent, and the officer terminates his employment as a
result, the officer would be entitled to receive:

o a lump sum payment equal to (a) the sum of (i) the officer's annual
base salary at the time of the change of control and (ii) the greater
of his most recent annual bonus or the average of his three most
recent bonuses at the time of the change of control multiplied by (b)
the number of years set forth in the employment agreement (three in
the case of Messrs. Winding, Winn, Houser and Jacobson and two in the
case of Messrs. Go and Timler);

o the actuarially determined present value of the benefit accruals that
would have been made through the end of the employment period under
our retirement plans applicable to the officer; and

o along with his eligible dependents, coverage under medical benefit
plans through the end of the employment period or, in the case of
Messrs. Winding, Winn and Houser, until the later of the end of the
employment period or the officer's sixty-fifth birthday.

The severance agreements with Messrs. Winding, Winn and Houser also provide that
if, at any time during the employment period, such executive is terminated due
to disability, he will be entitled to receive these payments and benefits.
Further, the severance agreements with Messrs. Winding, Winn and Houser provide
that if, during the sixty day period beginning one year after a change of
control occurs, such executive officer elects to terminate his employment with
the company for any reason, he will be entitled to receive these payments and
benefits.

The payments under these severance agreements may be subject to certain
adverse tax consequences that (i) impose on executives an excise tax on total
severance payments (which includes the value of certain non-cash benefits)
received by them and (ii) limits our ability to deduct such payments for tax
purposes. The severance agreements with Messrs. Winding, Winn, Houser and
Jacobson provide for cash payments to compensate them for the excise tax
payments they would incur as a result of receiving payments under their
agreements. The agreements with Messrs. Go and Timler limit the cash payments to
an amount that ensures that these tax consequences to not apply.

Additionally, upon a "change of control" of the company:

o stock options granted to our executive officers will become fully
exercisable; and

o the optionee will have the right to require the company to purchase
his outstanding options for cash at an aggregate "acceleration price"
for all shares of common stock subject to such options.

Compensation Committee and Stock Option Committee Interlocks and Insider
Participation

Steven R. Barth, a member of our Compensation Committee, is a partner in
the law firm of Foley & Lardner, which has provided legal services to the
company for over 40 years. As described in "Certain Transactions" below, Walter
G. Winding, our nonemployee Chairman of the Board and a member of our
Compensation Committee, provides services to the company in his capacity as
Chairman of the Board, for which he is paid an hourly fee of $200. Under our
bylaws, the Chairman of the Board is an officer of the company.

STOCK PERFORMANCE INFORMATION

The line graph appearing below compares the total return on our common
stock during the last five years with the total return of:

o companies in the Wilshire 5000 Index; and

o companies in a peer group of food retailers and wholesalers which
includes: Arden Group, Inc., Marsh Supermarkets, Inc., Nash Finch Co.,
SUPERVALU Inc., Fleming Companies, Inc. and Spartan Stores, Inc.

Comparison of Five-Year Total Shareholder Returns
(on a dividend reinvested basis)

[OBJECT OMITTED]
[CHART]

12/28/96 1/3/98 1/2/99 1/1/00 12/30/00 12/29/01
-------- ------ ------ ------ -------- --------
Company Index $100 163.55 177.44 140.09 121.94 239.87
Wilshire 5000 Index $100 131.46 162.26 200.48 178.69 159.08
Peer Group Index $100 130.45 161.94 121.75 98.80 165.65

Our Independent Public Accountants

As described in our Audit Committee's Report, our board previously
reappointed Arthur Andersen LLP to serve as our independent public accountants
for 2002. However, our board may reconsider this appointment if subsequent
events involving the future of Arthur Andersen cause the board to believe that
it would be in the best interests of the Company and its shareholders to retain
a different independent auditing firm. We expect that representatives of Arthur
Andersen will be at the annual meeting and will have a chance to make a
statement if they would like to do so. They will also be available to respond to
your questions.

CERTAIN TRANSACTIONS

In connection with the performance of his duties as our Chairman of the
Board, Walter G. Winding has provided consulting and other related services to
the company. As part of his compensation for serving as our Chairman of the
Board, Mr. Winding is entitled to receive an hourly fee of $200 per hour for
these services and reimbursement for certain related expenses. In fiscal 2001,
we paid Mr. Winding a total of approximately $84,000 for these services and
$2,700 as compensation for related expenses.

MISCELLANEOUS

We expect that the election of directors will be the only matter that will
be presented for shareholder consideration at the annual meeting. Other matters
may properly come before the annual meeting and the proxies named in the
accompanying proxy will vote on them in accordance with their best judgment.

We will bear the cost of soliciting proxies, including reimbursing brokers
and other nominees for their reasonable expenses in communicating with the
persons for whom they hold common stock. We expect to solicit proxies mainly by
mail. Some of our employees may also solicit proxies personally and by
telephone. We do not anticipate that we will retain anyone to solicit proxies or
that we will pay compensation to anyone for that purpose. We will, however,
reimburse brokers and other nominees for their reasonable expenses in
communicating with the persons for whom they hold common stock.

If you would like to receive a copy of our 2001 annual report on Form 10-K
- - without exhibits - please write to Armand C. Go, our Secretary, at 2215 Union
Avenue, Sheboygan, Wisconsin 53081, and we will provide you with a copy free of
charge.

If you wish to include a proposal in our proxy statement for the 2003
annual meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
you should forward your proposal to our Secretary by December 30, 2002. If you
submit a proposal after this date, your proposal will be considered untimely
under our by-laws and we will not be required to present your proposal at the
2003 annual meeting. If the board chooses to present your proposal despite its
untimeliness, the people named in the proxies solicited by the board of
directors for the 2003 annual meeting will have the right to exercise
discretionary voting power with respect to your proposal.

Sincerely,
FRESH BRANDS, INC.

/s/ Armand C. Go
Armand C. Go
Vice President, Chief Financial Officer,
Treasurer and Secretary

Sheboygan, Wisconsin
April 12, 2002

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APPENDIX A
AS ADOPTED
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FRESH BRANDS, INC.
Amended and Restated Audit Committee Charter
March 12, 2002

In order to assist the Audit Committee (the "Committee") of the Board of
Directors of Fresh Brands, Inc. (the "Company") in carrying out its duties and
responsibilities, the following is the Amended and Restated Audit Committee
Charter (the "Charter"). This Charter, however, is not intended to, and does
not, create any legal or fiduciary duties or responsibilities or form the basis
for a breach of fiduciary duty or potential liability if not complied with.

1. The Committee shall consist of no fewer than three directors, all of
whom are able to read and understand fundamental financial statements, and at
least one of whom shall have past employment experience in finance or
accounting, professional certification in accounting or other comparable
experience or background, such as a current or past position as a chief
executive or financial officer or other senior officer with financial oversight
responsibility. Generally, no director may serve on the Committee if he or she
has:

* been employed by the Company or its affiliates in the current or
past three years;

* personally accepted any compensation from the Company or its
affiliates in excess of $60,000 during the previous fiscal year (except for
board service, retirement plan benefits or non-discretionary compensation);

* been a partner, controlling shareholder or an executive officer of
any for-profit business to which the Company made, or from which it received,
payments (other than those which arise solely from investments in the Company's
securities) that exceed 5% of the organization's consolidated gross revenues for
that year, or $200,000, whichever is more, in any of the past three years;

* an immediate family member who is, or has been during the past three
years, employed by the Company or its affiliates as an executive officer; or

* been employed as an executive of another entity where any of the
Company's executives serve on that entity's compensation committee;

provided, however, that one member of the Committee, who is not a current
employee or officer of the Company, may fall into one or more of the categories
above if (a) the Board of Directors of the Company determines it to be in the
best interests of the Company and its shareholders, and (b) the Board's reasons
for making such determination are disclosed in the Company's next annual meeting
proxy statement.

2. Absent unusual circumstances, the Committee shall attempt to meet at
least three times annually. Special meetings shall be held as
circumstances require as determined by the Chairman of the Audit
Committee or by any two other members of the Committee.

3. The Committee's principal functions shall include the following:

a. To recommend annually a firm of independent certified public
accountants to serve as the Company's independent auditing firm
for the forthcoming year (it being understood that such
accountants shall be accountable to the Company's Board of
Directors and the Committee in their capacity as representatives
of the shareholders). See Item 8.

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b. To be well-informed about the Company's quarterly and annual
financial reports by receiving copies of all such reports, as
well as copies of all earnings releases, public investor
conference call scripts and financial analyst or financial press
presentations.

c. To review with the Company's chief executive officer, chief
financial officer and/or its principal accounting officer and the
Company's independent auditing firm the areas of financial risk
that could have a material adverse effect on the Company's
results of operation or financial condition.

d. To review with the Company's chief executive officer, chief
financial officer and/or its principal accounting officer the
Company's annual audit plans.

e. To review with the Company's chief executive officer, chief
financial officer and/or its principal accounting officer the
Company's in-house policies and procedures for regular review of
officers' conflicts of interest, including public disclosures of
insider and affiliated party transactions.

f. To obtain from the Company's independent auditing firm a formal,
written statement of the non-auditing relationships between the
auditors and the Company.

g. To review annually management's and the Company's auditor's
evaluations of factors related to the independence of the
Company's public accountant.

h. To review and approve engaging the Company's independent public
accountant to perform any non-audit related services related to
acquisition or tax matters totaling in excess of $100,000. Any
non-audit services to be performed by the Company's independent
accountants other than related to acquisition or tax matters must
be approved by the Committee.

i. To periodically review and analyze with the Company's chief
executive officer, chief financial officer and/or its principal
accounting officer and the Company's independent auditing firm
comparable public company financial reporting and accounting
policies and practices that differ from those of the Company,
including an analysis of the effect of alternative GAAP methods
of accounting on the Company's financial statements.

j. To review annually the adequacy of this Charter. When reviewing
the adequacy of this Charter, the Committee should seek the input
of the Company's independent auditing firm, the Company's chief
executive officer, chief financial officer and/or chief
accounting officer.

k. Review with management and the independent auditor any
correspondence with regulators or governmental agencies and any
employee complaints or published reports which raise material
issues

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regarding the Company's financial statements, accounting policies
or financial disclosures.

l. Recommend to the Board guidelines for the Company's hiring of
employees of the independent auditor who were engaged on the
Company's account.

m. Review with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance
sheet structures on the Company's financial statements.

4. The Committee shall have unrestricted lines of communication with the
chief executive officer, chief financial officer and/or its principal accounting
officer of the Company, as well as the Company's independent auditors, at all
times.

5. The Committee shall advise the Company's chief executive officer,
chief financial officer and/or chief accounting officer that it expects to be
consulted before the Company seeks a second opinion on any significant
accounting issue from an auditing firm other than the Company's auditing firm.

6. The Committee, through its Chairman, shall report its activities to
the full Board after each Committee meeting so that the Board is kept informed
of its activities on a current basis.

7. The Committee shall meet with the Company's outside counsel, when
appropriate, to discuss legal matters that may have a significant impact on the
Company's financial statements.

8. Factors to be considered in selecting or retaining an independent
public accountant to serve as the Company's independent auditing firm shall
include, without limitation, the following:

a. Opinions by appropriate management personnel on the capabilities,
resources and performance of the public accounting firm;

b. The firm's proposed audit fee and explanations for any material
fee changes from prior years;

c. The expected level of participation by the firm's partner
designated to the Company's account and other management
personnel in the audit examination and the mix of skills and
experience of the firm's staff and its staff rotation policy with
respect to the Company;

d. If a new public accounting firm is being considered, the steps
planned to ensure a smooth and effective transition;

e. If a new public accounting firm is being considered, the report
of the firm's latest peer review conducted pursuant to a
professional quality control program and any significant
litigation problems or disciplinary actions by the SEC or others;

f. If a new public accounting firm is being considered, the proposed
firm's credentials, capabilities and reputation and a list of
clients in the same geographical area and in the same industry;
and

g. The auditing firm's independence from the Company.

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9. The following are general post-audit review considerations and
guidelines:

a. The Committee should attempt to obtain from the Company's chief
financial officer and/or chief accounting officer explanations
for all significant variances in the financial statements between
years.

b. The Committee should attempt to request an explanation from
management and the independent public accountant of changes in
accounting standards or rules promulgated by the FASB, SEC or
other regulatory bodies that have or will have a material effect
on the Company's financial statements or accounting policies or
practices.

c. The Committee should attempt to inquire about the existence and
substance of any significant accounting accruals, reserves or
estimates made by management that had or will have a material
impact on the financial statements.

d. The Committee should attempt to meet privately with the
independent public accountant to request its opinion on various
matters, including the quality of financial and accounting
personnel.

e. The Committee should attempt to ask the independent public
accountant what its greatest concerns were in the course of the
audit and if it believes anything else should be discussed with
the Committee while not in the presence of management or the
Company's chief financial officer and/or principal accounting
officer, including any disagreements with management over
accounting practices, policies or disclosures.

f. The Committee should attempt to review the letter of management
representations given to the independent public accountant and
inquire whether it encountered any difficulties in obtaining the
letter or any specific representations therein.

g. The Committee should attempt to discuss with management and the
independent public accountant the substance of any significant
issues raised by outside counsel concerning litigation,
contingencies, claims or assessments. The Committee should
attempt to understand how such matters are reflected in the
Company's financial statements.

h. The Committee should attempt to inquire with the Company's chief
executive officer, chief financial officer and chief accounting
officer whether there are any significant tax matters that have
been or might be reasonably disputed by the IRS or state
agencies, and inquire as to the status of the related tax
reserves.

i. The Committee, at least through its Chairman, should attempt to
review with management the MD&A section of the Company's annual
report and ask the extent to which the independent public
accountant reviewed the MD&A section. Similar efforts should be
attempted, at least on a post-filing basis, with respect to the
Company's quarterly reports. The Committee should ask the
independent public accountant whether the other sections of the
annual report to shareholders are consistent with the information
reflected in the financial statements.

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FRESH BRANDS, INC.
2002 ANNUAL MEETING OF SHAREHOLDERS - MAY 22, 2002 PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints Walter G. Winding and Elwood F. Winn, and
each or either of them as proxies, each with the power to appoint his
substitute, and hereby authorizes each or either of them to represent and to
vote, as designated below, all the shares of Common Stock of Fresh Brands, Inc.
held of record by the undersigned on March 15, 2002 at the 2002 annual meeting
of shareholders scheduled to be held on May 22, 2002 and any adjournment
thereof.

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted:

o FOR the three specified director nominees; and

o On such other business as may properly come before the meeting in
accordance with the best judgment of the proxies named herein.

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and accompanying Proxy Statement relating to the Company's 2002 Annual Meeting
of Shareholders and the Company's 2001 Annual Report.

DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED

FRESH BRANDS, INC. 2002 ANNUAL MEETING

1. ELECTION OF DIRECTORS:

1 - Martin Crneckiy, Jr. [ ] FOR all nominees [ ] WITHHOLD
2 - R. Bruce Grover listed to the AUTHORITY to
3 - Elwood F. Winn left (except as vote for all
specified below). nominees listed
to the left.

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(Instructions: To withhold authority
to vote for any indicated nominee, ->
write the number(s) of the nominee(s)
in the box provided to the right.)
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2. In their discretion, upon such other business as may properly come before
the meeting or at any adjournment thereof.

Date _____________________

Check appropriate box
Indicate changes below:
Address Change? [ ] Name Change? [ ] NO. OF SHARES
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Signature(s) in Box
PLEASE SIGN EXACTLY AS YOUR NAME
APPEARS HEREON. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give your full
title as such. If a corporation,
please sign in full corporate name
by the president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.