SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549

                             FORM 10-K


   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         EXCHANGE ACT OF 1934
                                   
 For the Fiscal Year Ended December 31, 1998   Commission File Number 33-68956
                                   
                      SPECIALTY FOODS CORPORATION
        (Exact name of registrant as specified in its charter)
                                   
           Delaware                        75-2488181
 (State or other jurisdiction           (I.R.S. Employer 
 of incorporation or organization)       identification No.)               
      520 Lake Cook Road                        
           Suite 550                          60015
         Deerfield, IL                      (Zip Code)
     (Address of principal executive offices)

                             (847) 405-5300
            (Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.   Yes  X      No 
            ---        ---

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by Reference
in Part III of this Form 10-K or any amendment to this Form 10-K.  X
                                                                  ---
 
     State the aggregate market value of voting stock held by non-
affiliates of the Registrant.  No market presently exists for the
Registrant's Common Stock.

     Number of shares of common stock outstanding as of March 17,
1999:  100 shares.

     Documents incorporated by reference:  None.

<PAGE>                           1
     
                       TABLE OF CONTENTS

                                                           Page
                                                           ----
                             PART I

Item 1.     Business                                         3
Item 2.     Properties                                       8
Item 3.     Legal Proceedings                                8
Item 4.     Submission of Matters to a Vote of Security      
            Holders                                          9

                            PART II

Item 5.     Market for the Registrant's Common Equity and   
            Related Stockholder Matters                     10                 
Item 6.     Selected Financial Data                         10
Item 7.     Management's Discussion and Analysis of         
            Financial Condition and Results of Operations   11
Item 7A.    Quantitative and Qualitative Disclosure about   
            Market Risk                                     15
Item 8.     Financial Statements and Supplementary Data     15
Item 9.     Changes In and Disagreements with Accountants   
            on Accounting and Financial Disclosure          15

                            PART III

Item 10.    Directors and Executive Officers of the         
            Registrant                                      16            
Item 11.    Executive Compensation                          19
Item 12.    Security Ownership of Certain Beneficial Owners 
            and Management                                  24
Item 13.    Certain Relationships and Related Transactions  27

                            PART IV

Item 14.    Exhibits, Financial Statement Schedules and     
            Reports on Form 8-K                             29


                   FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements
within the meaning of the federal securities laws, including,
without limitation, Item 3 - Legal Proceedings and Item 7 -
Management's Discussion and Analysis of Financial Condition and
Results of Operations.  These forward-looking statements reflect the
Company's expectations and are based on currently available
information.  When used in this Report, the words "anticipates,"
"believes," "expects," "intends" and similar expressions as they
relate to the Company or its management are intended to identify
such forward looking statements. Actual results, performance,
achievements or other information may vary materially from those
expressed in, or implied by such forward-looking statements and are
subject to numerous risks and uncertainties. Factors that could
cause actual results to differ materially from those in forward-
looking statements include: general economic conditions; industry
conditions, including competition, consolidation and cost and
availability of raw materials; weather; interest rates; access to
capital markets and the timing of and value received in connection
with asset divestitures.  No assurances can be given that any of the
events anticipated by the forward-looking statements will transpire
or occur, or if any of them do so, what impact they will have on the
results of operations and financial condition of the Company.

<PAGE>                          2

                              PART I

Item 1.   Business

Specialty Foods Corporation ("SFC"), a Delaware corporation, is a
leading producer, marketer and distributor of bakery products,
including bread, cookies and other baked goods throughout the United
States.  The Company's bakery operations include Metz Baking Company
("Metz"), Mother's Cake & Cookie Co. ("Mother's"), Archway Cookies,
Inc. ("Archway") and Andre-Boudin Bakeries, Inc. ("Boudin").
Specialty Foods Acquisition Corporation ("SFAC"), a Delaware
corporation, owns all of the capital stock of SFC.  SFAC, SFC and
their subsidiaries, including Metz, Mother's, Archway and Boudin are
referred to herein as the "Company".


Operations

The Company operates principally in one segment of business - bakery
products (bread, cookies, baked goods and bakery cafes).  The Company
believes its cookie operations are the third largest in the nation and
that the Company has a leading regional position in multiple product
lines within the bread and baked goods markets of the baking industry.
The Company operates one of the largest food distribution systems in
the U.S. with a network of more than 2,385 direct-store-delivery
("DSD") routes across 45 states.

Metz, established in 1922 and headquartered in Deerfield, Illinois, is
a leading retail bread company serving a sixteen state area of the
Midwestern United States.  Metz's product line includes breads, buns,
rolls and sweet goods. These products are marketed by Metz under the
Taystee, Holsum, Old Home, Master, Country Hearth, Egekvist,
D'Italiano, Pillsbury and Healthy Choice brand names and numerous
private labels.  Metz distributes its products through a company-owned
direct-store-delivery ("DSD") system to retail grocers, club stores,
mass merchants, convenience stores and other outlets.

Mother's, founded in 1914 and based in Oakland, California, is the
second largest retail cookie producer and distributor in the Western
United States.  Mother's products are marketed under the Mother's,
Mrs. Wheatley's, Bakery Wagon and Marie Lu brand names.  Mother's
sells its cookie products primarily to retail grocers in 14 states
through a DSD system that is primarily company-owned.  Mother's also
sells nationally through club stores, mass merchandisers and other
outlets.

Archway, headquartered in Battle Creek, Michigan and established in
1936, is one of the nation's leading cookie makers and is the leading
producer of homestyle soft cookie varieties.  Archway bakes more than
one billion cookies annually, producing more than 60 varieties of
cookies, including homestyle, holiday and sugar free products under
the Archway brand name.  Archway distributes its cookies through an
independent DSD network and franchisees that resell to retail food
outlets and chain stores throughout the U.S. and Canada.

Boudin, which is based in San Francisco and was founded in the Gold
Rush of 1849, is a leading marketer of premium branded specialty
breads and bread-related products.  Boudin sells most of its products
through 46 company owned and operated bakery cafes in California (37),
Chicago (7) and Dallas (2).  Boudin also distributes some of its
products through its own direct-mail catalog and a limited number of
retail grocers.

<PAGE>                          3

Acquisition Strategy

In 1998, the Company completed five acquisitions of bakery companies
that complement the Company's existing business, expand its geographic
scope and strengthen its competitive position.  The Company's
acquisition strategy is consistent with many of the other larger
companies in the baking industry.  In recent years, the bread industry
has undergone substantial consolidation as several larger regional
competitors (most notably, Interstate Brands, Earthgrains Company and
Flowers Industries) have expanded their businesses through the
acquisition of smaller regional companies.  Similarly, leading cookie
manufacturers such as Keebler have continued to pursue strategic
acquisitions of smaller cookie makers. These consolidations and
acquisitions are being driven by the opportunity to increase sales and
market share, and reduce costs through the combining of manufacturing,
distribution and administrative capabilities.

In October 1998, the Company acquired Archway which, together with
Mother's, creates the nation's third largest cookie business. The
Archway acquisition provides the Company with a strong, established
brand name, more diversified product lines and a nation-wide presence.
The Archway acquisition also provides opportunities to realize
significant operational and distribution synergies.  The Company
acquired the capital stock of Archway for approximately $90 million.
In addition, the Company used approximately $26 million to repay
certain indebtedness of Archway.  The Company also completed four
smaller, strategic bread acquisitions in 1998.  Boudin acquired Pane
Corporation, doing business as San Diego Bread Company, which sells a
variety of specialty breads, including a private label sourdough that
complements Boudin's premium sourdough bread brand in California.  The
acquisition of the San Diego Bread Company provides Boudin with the
opportunity to strengthen its position in Southern California.  Metz
also acquired three bakery companies in 1998: (i) Clear Lake Bakery,
Inc., which bakes and distributes a variety of bread, buns, rolls,
doughnuts and sweet rolls throughout Iowa; (ii) Grandma Sycamore's,
which distributes its brand name bread throughout Utah and neighboring
states; and (iii) Eagle (Rock Island) Bakery which produces private
label bread and buns distributed in Iowa and Illinois.  These bread
acquisitions provide significant opportunity for reducing costs and
strengthening Metz's competitive position in its core Midwestern
geography.

The Company intends to continue to selectively acquire bakery
businesses to build enterprise value through the realization of
significant cost synergies.  The Company has identified other
potential acquisition candidates with a range of synergy opportunities
that arise from a combination with its existing bakery business.


Divestitures

SFC has entered into a definitive agreement to sell all of the capital
stock of its subsidiary HMFS Holdings, Inc. ("HMFS" and, together with
its operating subsidiary, H&M Food Systems Company, Inc., "H&M"), a
leading producer of specialty meats and meat-based prepared foods for
restaurants and food manufacturers, for approximately $132 million
(the "H&M Sale").  Subject to required regulatory approval, the
Company expects to close the H&M Sale in the second quarter of 1999.
The Company expects to realize net cash proceeds of approximately $110
million from the H&M Sale after repurchasing H&M's accounts
receivable, establishing a $5 million one-year escrow and paying
transaction costs.  The Company currently expects to utilize a portion
of the net proceeds to make investments in its bakery businesses,
including acquisitions, and to pay down indebtedness.  H&M's results
have been reported as a discontinued operation in the Company's
financial statements.  The total sales and earnings before interest,
taxes, depreciation and amortization ("EBITDA") of H&M in 1998 were
$181.0 million and $16.0 million, respectively.

<PAGE>                          4

Financing Structure

The Company's financing structure at the date of this Report consists
of the following:  $122.8 million Revolving Credit Facility at the
operating subsidiary level ("Revolving Credit Facility"); $169.1
million Term Loan Facility at the SFC level ("Term Loan Facility");
$225 million of 10 1/4% Senior Notes due 2001 issued by SFC ("10 1/4%
Senior Notes"); $150 million of 11 1/8% Senior Notes due 2002 issued
by SFC ("11 1/8% Senior Notes"); $200 million of 11 1/4% Senior
Subordinated Notes due 2003 issued by SFC ("Senior Subordinated
Notes"); 13% Senior Secured Discount Debentures due 2005 issued by
SFAC with an accreted value at December 31, 1998 of $295.2 million
("Senior Debentures"); and 11% Senior Subordinated Discount Debentures
due 2006 issued by SFAC with an accreted value at December 31, 1998 of
$134.7 million ("Subordinated Debentures").  In addition, the Company
is a party to an accounts receivable securitization facility pursuant
to which the accounts receivable of the Company's operating
subsidiaries are transferred to a master trust ("Accounts Receivable
Facility").  The maximum amount of accounts receivable that can be
sold to the Accounts Receivable Facility is $75 million.  The
Revolving Credit Facility, Term Loan Facility and Accounts Receivable
Facility were refinanced in March, 1998.  The Term Loan and Revolving
Credit Facilities have a final maturity date of January 31, 2000.  The
Accounts Receivable Facility also has a final maturity date of January
31, 2000 and begins to amortize on December 15, 1999.

In October 1998, the Company commenced private exchange offers (the
"Exchange Offers") for certain series of publicly-held debt of both
SFAC and SFC.  The offers are to exchange such series of SFAC and SFC
existing debt for new debt securities of two new intermediate holding
companies.  Both Exchange Offers remain outstanding as of the date of
this Report.  SFAC is offering certain holders of its Senior
Debentures the opportunity to exchange their existing debt for new 13%
Senior Secured Discount Debentures (the "New Senior Debentures") of a
new intermediate holding company.  The New Senior Debentures include
provisions which (i) extend the cash pay interest and maturity dates,
(ii) give SFAC a call option at prescribed discounts of accreted value
and (iii) provide holders of its Senior Debentures who consent to the
exchange up to an aggregate of ten percent of the equity interest of a
new intermediate holding company. Holders of more than 50% of the
Senior Debentures have indicated their agreement to exchange the
Senior Debentures for New Senior Debentures.  SFC is offering certain
holders of its existing notes the opportunity to exchange their
existing debt for new notes (the "New Notes") of another new
intermediate holding company.  The New Notes have substantially the
same terms and covenants as the existing notes and will remain
structurally senior to the New Senior Debentures.  The holders of
SFC's public debt are being offered $5 per $1,000 note to consent to
the transaction.  In addition, SFC is seeking the consent of its
Revolving Credit Facility and Term Loan Facility lenders to amend
their agreements to conform to the new holding company structure.

SFAC, SFC and each subsidiary of SFC is a separate corporate entity.
Because the Company conducts substantially all of its business through
its subsidiaries, the ability of SFAC, SFC or any new intermediate
holding company to meet its obligations under its indebtedness and to
its creditors will be dependent on the earnings and cash flow of its
subsidiaries and the ability of its subsidiaries to pay dividends and
to advance funds to it.  In addition, rights of SFAC, SFC and any new
intermediate holding company and the rights of such companies'
creditors and securities holders, including the holders of debt
securities, to participate in the assets of any subsidiary upon such
subsidiary's liquidation or recapitalization will be subject to prior
claims of such subsidiary's creditors, except to the extent that such
company may itself be a creditor with recognized claims against any
such subsidiary.

<PAGE>                           5

SFAC and SFC were formed in June 1993 to acquire (the "Acquisition")
the North American food businesses (the "Acquired Companies" or the
"Predecessor Company") of Beledia N.V., a subsidiary of Artal Group
S.A.


Competition

The Company's bakery businesses compete in the highly competitive
bakery products industry.  Competition is likely to increase due to
continued industry consolidation and overcapacity in certain areas of
the country. Competitors include multi-product large food companies
(such as Bestfoods), national bakers (such as Interstate Brands and
Earthgrains), cookie companies with national
distribution (such as Keebler and Nabisco) and numerous smaller
regional and local companies.  Many of the Company's larger
competitors have significantly greater financial, marketing and other
resources than the Company, while smaller competitors may have lower fixed
costs and greater operating flexibility.  The Company is also more
highly leveraged than most of its competitors, which may place it at a
competitive disadvantage or restrict the Company's ability to
implement its acquisition strategy in a consolidating industry.  The
Company does not encounter material foreign competition.  Competition
is based on a number of factors including price, quality, brand
loyalty, service, freshness, marketing effectiveness and obtaining
access to retail outlets and adequate shelf space.


Raw Materials

The Company is a major purchaser of flour, sugar, vegetable oils, and
other agricultural products, as well as plastic, paper and corrugated
products for packaging materials.  Although the Company has some long-
term contracts, the bulk of such raw materials are purchased on the
open market or pursuant to short-term agreements.  The prices paid for
food product raw materials generally reflect external forces, among
which weather conditions and commodity market activities are the most
significant.  Although the prices of the principal raw materials used
by the Company can be expected to fluctuate as a result of government
actions and/or market forces (which would directly affect the cost of
products and value of inventories), such materials are generally in
adequate supply and available from numerous sources.  Occasionally,
and where possible, the Company makes advance purchases of commodities
significant to its business in order to lock in what is perceived to
be favorable pricing and to protect itself from basic market price
fluctuations.  The Company seeks to pass through increases in the
costs of commodity ingredients to its customers where possible.  The
Company's ability to do so is dependent primarily upon competitive
conditions and pricing methodologies employed in the various
geographies in which the Company conducts its business.


Trademarks, Patents and Licenses

The Company owns or licenses a number of trademarks and tradenames
which management believes provide significant value to several of the
Company's product lines because of their recognition by customers and
consumers.  The Company owns or licenses a number of patents, but such
patents and licenses are not considered material to the conduct of the
Company's businesses, and the Company does not believe that any of its
businesses are substantially dependent on patent protection.

<PAGE>                          6

Seasonality, Working Capital

The Company's business is moderately seasonal with higher sales,
operating profit and cash flows generally occurring in the second,
third and fourth quarters of the year.  This seasonality is due
primarily to higher bread and cookie sales in the summer and fall
months, as well as the holiday season.


Customers, Sales and Backlog

No one customer accounts for more than 10% of the Company's net sales.
In general, the backlog of orders is not deemed to be significant or
material for an understanding of the Company's businesses.


Environmental Matters

The past and present business operations of the Company and the past
and present ownership and operation of real property by the Company
are subject to extensive and changing federal, state and local
environmental laws and regulations pertaining to the discharge of
materials into the environment, the handling and disposition of wastes
(including solid and hazardous wastes) or otherwise relating to
protection of the environment.  Compliance with federal, state and
local environmental laws and regulations is not expected to have a
material impact on the Company's capital expenditures, earnings or
competitive position.  No assurance can be given, however, that
additional environmental issues relating to presently known matters or
identified sites or to other matters or sites will not require
additional, currently unanticipated investigation, assessment or
expenditures.


Regulation

     Public Health

The Company is subject to the Federal Food, Drug and Cosmetic Act and
regulations administered by the Food and Drug Administration ("FDA").
These comprehensive regulatory schemes govern, among other things, the
manufacture, composition, ingredient labeling, packaging and safety of
food.  For example, the FDA regulates manufacturing practices for food
through its current "good manufacturing practices" regulations,
specifies the called standards of identity ("recipes") for certain
foods, including many of the kinds of products marketed by the
Company's subsidiaries, and prescribes the format and content of
certain information required to appear on the labels of food products.

The Company has revised the labeling of its products to comply with
regulations promulgated by the FDA pursuant to the Nutrition Labeling
and Education Act of 1990.  These regulations require nutritional
labeling on all foods that are a meaningful source of nutrition,
including many of the Company's products, and place limitations on the
use of certain terms while requiring the use of other terms.

The operations and the products of the Company's business also are
subject to state and local regulation through such measures as
licensing of plants, enforcement by state health agencies of various
state standards and inspection of the facilities.

<PAGE>                           7     
     
     Federal Trade Commission

The Company is subject to certain regulations by the Federal Trade
Commission ("FTC").  Advertising of the Company's businesses is
subject to regulation by the FTC pursuant to the Federal Trade
Commission Act and the regulations promulgated thereunder.

     Employee Safety Regulations

The Company is subject to certain health and safety regulations
including regulations issued pursuant to the Occupational Safety and
Health Act.  These regulations require the Company to comply with
certain manufacturing, health and safety standards to protect its
employees from accidents.

     Employees

As of December 31, 1998, the Company employed approximately 8,300
persons.  Approximately 62% of the Company's labor force are or will
be covered by collective bargaining agreements upon completion of
current negotiations.


Item 2.   Properties

The Company uses various owned and leased plants, warehouses, and
other facilities in its operations.  These facilities are located
primarily in the Midwest and California.  Management believes that the
facilities are properly equipped with machinery suitable for this use.
Such facilities and related equipment are well maintained generally
and are adequate for the conduct of current operations.  Management
also believes that the Company's facilities have sufficient capability
and capacity to meet the Company's long-term needs.  The following is
a summary of significant facilities that were operated by the Company
as of December 31, 1998.

                       Number of Facilities
               -----------------------------------
               Owned          Leased         Total
               -----          ------         -----
                25              61             86

Substantially all of the Company's owned facilities are subject to
mortgages for the benefit of the lenders under the Revolving Credit
Facility.

In addition, the Company operates a number of retail outlets and
retail bakery stores.


Item 3.   Legal Proceedings

On May 20, 1993, prior to the SFC acquisition from Artal,
Cacique, Inc. ("Cacique") commenced proceedings against certain
former subsidiaries of the Company ("Stella") in the
California Superior Court, Alameda County related to "Hispanic"- style
cheese ("Product") produced by Stella between 1993 and September 1994.
In November 1997, Stella was sold to a third party, but the Company has
retained liability with respect to this proceeding, has indemnified
the purchaser in connection therewith and continues to control the
defense of this action.

<PAGE>                          8

Cacique's complaint asserts causes of action for misappropriation
of trade secrets, trademark interference, inducing breach of contract,
interference with business relations, unfair competition and conspiracy
to commit certain of the causes previously stated.  Cacique claims damages
for lost profits of approximately $14 million in addition to punitive
damages and attorneys' fees. Stella filed a cross-complaint seeking
approximately $14 million in damages based upon allegations that
Cacique had engaged in predatory pricing practices.

This proceeding is currently scheduled for trial in the second quarter
of 1999.  The Company intends to continue to vigorously defend against
Cacique's allegations and pursue its claims against Cacique.  Although
any litigation has an element of uncertainty and no assurances
therefore can be given, management believes that the ultimate
resolution of this matter will not have a material adverse effect on
the Company's financial condition or results of operations.

In addition, the Company is involved in contractual disputes,
administrative and legal proceedings and investigations of various
types, arising out of the ordinary course of business.  Although any
litigation, proceeding or investigation has an element of uncertainty,
the Company does not believe that any single matter, if adversely
determined, would have a material adverse effect on the Company's
financial condition or results of operations. The Company does not
believe at this time that there is a reasonable possibility that all
or a majority of such matters will be decided against the Company.


Item 4.   Submission of Matters to a Vote of Security Holders

No matters have been submitted to a vote of security holders of SFAC,
through the solicitation of proxies or otherwise, since the filing by
the Company of its Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998.

<PAGE>                      9

                               PART II

Item 5.   Market for Registrant's Common Equity and Related
Stockholder Matters

There is no public market for the common stock, par value $.01 per
share ("SFC Common Stock"), of SFC, all of which is held by SFAC.

Certain of the Company's debt agreements contain covenants that
restrict or prohibit (with de minimus exceptions) SFC from paying
dividends or making other distributions to SFAC. Refer to "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" and footnote 13 to the accompanying financial
statements for additional discussion of such restrictions.


Item 6.   Selected Financial Data



                                   (In millions)
                   
                       1998    1997     1996     1995     1994
                       ----    ----     ----     ----     ---- 
Net Sales              $742    $718     $706     $704     $667
                       =====   =====    =====    =====    ===== 

(Loss) from
continuing
operations (1)(2)      $(56)   $(67)   $(285)   $(209)    $(65)
                      ======  ======   ======   ======   ======

Income (loss) from
discontinued
operations (1)(2)(3)    $10    $165    $(161)    $(61)     $45
                      ======  ======   ======   ======   ======

Total Assets           $530    $513     $522     $985   $1,242
                      ======  ======   ======   ======   ======
                           
Long-Term Debt         $820    $753     $834     $831     $802
                      ======  ======   ======   ======   ======             

(1)  In 1996, the loss from continuing operations included a goodwill
     write-down of $203 million, while discontinued operations included a
     goodwill write-down of $152 million.

(2)  In 1995, the loss from continuing operations included a goodwill
     write-down of $157 million, while discontinued operations included a
     goodwill write-down of $97 million.

(3)  Interest expense is not allocated to discontinued operations.

<PAGE>                            10

Item 7.   Management's Discussion and Analysis of Financial Condition
and Results of Operations

This Annual Report or Form 10-K contains forward-looking statements
within the meaning of the federal securities laws which reflect the
Company's expectations and are based on currently available
information. Actual results, performance, achievements or other
information may vary materially from such statements and are subject
to future known and unknown risks and uncertainties and events
including those in the forepart and elsewhere herein.

The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items in the Company's
statements of operations.

                                       1998     1997    1996
                                       ----     ----    ----                 
Net sales                              100.0%   100.0%  100.0%
Cost of sales                           44.4     44.8    46.5
                                       -----    -----   -----   
     Gross profit                       55.6     55.2    53.5

Operating expenses:                                     
     Selling, distribution, general
       and administrative               51.1     51.2    49.4
     Amortization of intangible assets   0.2      0.1     1.0
     Goodwill write-down                   -        -    28.9
                                        ----     ----    ----        
Total operating expenses                51.3     51.3    79.3
                                        ----     ----    ----
     Operating profit (loss)             4.3      3.9   (25.8)
Interest expense, net                   11.4     12.6    13.2
Other expenses, net                      0.4      0.7     1.4
                                        ----     ----   ------ 
     Loss from continuing operations    (7.5)%   (9.4)  (40.4)%
                                        =====    =====  ======                


Results of Operations

     1998 Compared to 1997

Consolidated net sales from continuing operations increased 3.4% to
$742.3 million in 1998 compared to $718.1 million in 1997.  The
increase in net sales was attributed to volume gains at Metz and the
inclusion of ten weeks of Archway sales in 1998 partially offset by
one less week of sales due to 1997's fifty-three week year, changes in
customer mix and lower pricing at Mother's.  The volume gains at Metz
resulted from the expansion into central Illinois and new private
label business.

The Company's gross profit margin increased to 55.6% in 1998 from
55.2% in 1997.  The gross profit margin percentage was favorably
impacted by product mix at Mother's and lower commodity costs at Metz.
Offsetting these favorable trends were inflationary increases in
manufacturing costs and higher depreciation expense.

Selling, distribution, general and administrative ("SDG&A") expenses
increased $12.7 million or 3.5% in 1998 to $379.8 million.  However,
as a percentage of sales, SDG&A expenses were held constant in 1998.
SDG&A increases were attributed to the inclusion of Archway for ten
weeks in 1998, contractual wage increases, Mother's advertising
campaign and Metz's new business initiatives.  Headcount reductions at
both Mother's and Metz reduced the level of SDG&A expenditures in
1998.

<PAGE>                             11

Interest expense, net in 1998 decreased $6.0 million or 6.6% to $84.8
million from $90.8 million in 1997. The decrease is primarily due to
reduced borrowings under the Revolving Credit Facility throughout the
year and interest earned on cash equivalents.

Other expense, net was $3.1 million in 1998 compared to $4.7 million
in 1997.  The reduction is primarily due to a decrease in the loss on
disposals of property, plant, and equipment in 1998.

As a result of the above factors, net loss from continuing operations
decreased to $55.9 million in 1998 compared to $67.5 million in 1997.

The Company reports minimal state income tax and no federal income tax
due to its net operating loss position for tax purposes.

Because of the Company's highly leveraged capital structure, EBITDA is
an important performance measure used by the Company and its
stakeholders.  The Company believes that EBITDA provides additional
information for determining its ability to meet future obligations and
debt service requirements.  However, EBITDA is not indicative of
operating income or cash flow from operations as determined under
generally accepted accounting principles.  The Company's EBITDA from
continuing operations in 1998 and 1997 is calculated as follows:

                                         (In thousands)
                                         --------------
                              
                                      1998             1997
                                      ----             ----
Continuing Operations:                          
   Operating profit                  $31,483          $28,303
   Amortization                        1,471              900
   Depreciation                       25,733           20,187
                                      ------          -------
                                      58,687           49,390
Discontinued Operations (H&M only)    15,977           13,078
                                      ------          ------- 
                                     $74,664          $62,468
                                     =======          =======               

1997 Compared to 1996

Consolidated net sales from continuing operations increased 1.7% to
$718.1 million in 1997 compared to $706.0 million in 1996.  Net sales
increased $12.1 million principally due to increased cafe sales at
Boudin's and an additional week of sales due to the operating units'
fifty-three week year in 1997.

The Company's gross profit margin increased to 55.2% in 1997 from
53.5% in 1996 primarily driven by margin gains due to lower commodity
costs.

SDG&A expenses increased $17.6 million or 5.0% in 1997 to $367.1
million.  Selling expenses increased primarily due to increased store
personnel for Boudin's new cafes and increased promotional spending at
Mother's.  Distribution expenses increased due to the inflationary
cost increases in the DSD systems at Metz and Mother's.  General and
administrative expenses decreased primarily due to a reduction in SFC
corporate overhead expenses and non-recurring 1996 severance expense
related to former senior executives of the Company.

Interest expense, net in 1997 decreased $2.7 million or 2.9% to $90.8
million from $93.5 million in 1996 principally due to the decreased
borrowing under the Revolving Credit Facility.

<PAGE>                            12

Other expense, net was $4.7 million in 1997 compared to $9.1 million
in 1996.  The decrease is primarily due to a decrease in the loss on
disposals of property, plant, and equipment in 1997.

As a result of the above factors and the goodwill write-off of $203.3
million in 1996, net loss from continuing operations decreased to
$67.5 million in 1997 compared to $285.8 million in 1996.

The Company reports minimal state income tax and no federal income tax
due to its net operating loss position for tax purposes.

The extraordinary loss of $5.7 million in 1997 resulted from the write-
off of deferred financing costs associated with the Revolving Credit
Facility, Term Loan Facility and Accounts Receivable Facility, each of
which were refinanced in the first quarter of 1998.

Liquidity and Capital Resources

In 1998, net cash used in operating activities totaled $44.0 million,
including cash requirements of $18.8 million related to continuing
operations, $13.5 million related to working capital and $11.7 million
for discontinued businesses.  Net of the effects of acquisitions, the
use of cash related to working capital is primarily due to the
reduction in accounts payable of $8.5 million as the Company took
advantage of certain discount opportunities, a decrease in accrued
expenses of $12.4 million for expenditures associated with acquisition
liabilities and restructuring payments, offset by cash provided of
$8.9 million from increased funding under the accounts receivable
facility. Net cash used in operating activities in 1997 was $95.6 million.
The increase in net cash used in operating activities in 1997 as
compared to 1996 was primarily attributable to the increased cash
requirements of discontinued operations, payment of accrued
acquisition liabilities, restructuring payments, and reductions in
accounts payable and accrued expenses.  In 1996, cash used by
operating activities of $7.0 million was principally due to the
increased loss from continuing operations offset by net cash provided
by discontinued operations and increased funding under the accounts
receivable facility.

Net cash used by investing activities totaled $239.6 million in 1998.
The activity in 1998 was primarily attributable to the use of $135.0
million to acquire businesses, the purchase of $35.4 million of
transportation and production equipment previously leased and planned
capital expenditures.  In 1997, cash provided by investing activities
of $344.7 million was primarily attributable to the net proceeds from
the divestiture of business units, offset by capital expenditures.  In
1996, cash provided by investing activities of $56.8 million resulted
from the net proceeds from the sale of B&G Foods, Inc. and Burns & Ricker,
Inc. and sale-leaseback transactions, offset by capital expenditures.

Net cash provided by financing activities amounted to $55.1 million in
1998, primarily due to additional borrowings under the Company's
Revolving Credit Facility, offset by refinancing costs and scheduled
payments on long-term debt.  Net cash used in financing activities
amounted to $63.1 million in 1997 as a paydown of revolving credit
borrowings and normal payments on long-term debt were partially offset
by an issuance of redeemable preferred stock.  In 1996, cash used by
financing activities of $3.2 million was primarily due to payments of
long-term debt and refinancing costs slightly offset by increased
revolver borrowings.

Based upon the above, the net increase (decrease) in cash in 1998,
1997 and 1996 was $(228.4) million, $186.1 million and $46.5 million,
respectively.

In March 1998, the Company refinanced its Revolving Credit Facility,
Term Loan Facility and Accounts Receivable Facility with a new
syndicate of financial institutions.  The provisions of the Revolving
Credit Facility and Term Loan Facility contain certain restrictive
covenants that require the Company to maintain specified leverage and

<PAGE>                         13

interest coverage ratios and other limitations regarding capital
expenditures, sales of assets, loans and investments and encumbrances
of assets.  In addition, the Company's ability to incur additional
indebtedness is significantly limited under such facilities.

As of December 31, 1998, the Company has a cash balance of $5.9
million and has $75.0 million of borrowings under its $122.8 million
Revolving Credit Facility.  Outstanding letters of credit of $10.2
million as of December 31, 1998 reduce available funds under the
facility.

In 1999, working capital requirements are projected to be lower than
1998 and capital expenditures are planned to be substantially reduced
from 1998 levels.  The Company will continue to pursue selective
bakery acquisitions.  Management believes that available funds and
proceeds from the H&M sale should be adequate to fund the Company's
1999 operations, capital expenditures and acquisitions.  However,
there can be no assurance that available funds will be adequate to
meet such needs.

The Revolving Credit Facility and Term Loan Facility mature in January
2000.  The Accounts Receivable Facility begins to amortize December
15, 1999 and matures in January 2000. By the year 2000, the Company's
ability to meet its cash debt service requirements will be dependent
upon refinancing a significant portion of its indebtedness.
Currently, the Company is pursuing an exchange offer more fully
described under Item 1- Business- Financing Structure and in Note 13
to the accompanying financial statements.  If the exchange offer is 
completed, the Company also plans to pursue an extension of the term of
SFC's Revolving Credit Facility, Term Loan Facility and Accounts
Receivable Facility.  Management believes that completion of an
exchange offer and the extension of its senior secured indebtedness
are essential elements in continuing to operate the Company's business
as currently conducted.  There can be no assurance, however, that the
Company will be successful in completing the proposed exchange offer
or extending the term of its senior secured indebtedness.


Year 2000 Issues

The Year 2000 ("Y2K") issue is the result of computer programs using a
two-digit format, as opposed to four digits, to define the applicable
year.  Such computer systems will be unable to interpret dates beyond
the year 1999, which could cause system failures and other computer
errors, resulting in business and operational disruptions.  In 1998,
the Company developed a three-phase program to address the Y2K issue
as it relates to its information systems and other computer-based
operations.  Phase I was the identification of those Company systems
which could be impacted by the Y2K issue.  Phase I was completed in
1998.  Phase II, which was substantially completed during 1998,
included the development and implementation of the corrective steps
necessary to ensure Y2K compliance.  The Company anticipates the
completion of Phase III, the final testing of all systems potentially
at risk to ensure remediation of any Y2K issues, by mid-1999.  The
Company has identified three major areas it believes are essential for
the successful resolution of any Y2K issues:  (1) financial and
informational system applications, (2) manufacturing applications and
(3) third-party relationships.

The Company has completed its review of its systems and has contacted
software suppliers to assess major areas of potential exposure due to
the Y2K issue.  While a number of the Company's systems have been
determined to be Y2K compliant, certain applications required
remediation.  The Company has substantially completed its remediation
and is currently replacing certain non-Y2K compliant hardware and
software as well as testing Y2K software changes.  Such efforts are
expected to be completed by the second quarter of 1999.  In addition,
the Company has contacted key third parties, most of which expect to
be Y2K compliant by mid-1999.

<PAGE>                            14

The Company has already spent approximately $0.5 million to identify,
modify and replace those systems with likely exposure to Y2K issues
and expects to spend approximately an additional $0.8 million to
complete this compliance program.

The Company is not able to determine the potential impact of a failure
of some or all of its systems in the event its compliance efforts are
not completely successful, nor has the Company been able to assess the
potential effect on its operations and financial condition caused by
systems failures or disruptions to any of its suppliers, customers,
service providers or other major third parties.


Item 7A.   Quantative and Qualitative Disclosure about Market Risk.

During 1998, the Company entered into interest rate swap agreements to
reduce its exposure to changes in the cost of its variable rate
borrowings as required by its Term Loan Facility.  Under the interest
rate swap agreements, which expire in January 2000, the Company
receives floating rate payments from the counterparties based upon the
three-month LIBOR and makes fixed rate payments at 5.753% and 5.765%
to the respective counterparties.  The payments are calculated based
upon a notional principal amount of $100 million.  The net
differential of interest to be paid or received under the remaining
agreements is recognized as incurred.  In 1998, net payments totaling
$30 thousand were made to the counterparties.  Off-balance-sheet risk
from the interest rate swap agreements at December 31, 1998 includes
the risk associated with changes in market values and interest rates.
The counterparties to the agreements are major financial institutions.


Item 8.   Financial Statements and Supplementary Data

See Index to Financial Information on page F-1.


Item 9.   Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure

None.

<PAGE>                            15

                               PART III

Item 10.   Directors and Executive Officers of the Registrant

Directors
---------

The number of persons presently serving on the Board of Directors of
SFC is ten.  Set forth below are the names, ages, other positions and
offices held and a brief account of the business experience for each
director. All members of the Board of Directors serve until a
successor is elected.


Name                Age     Other Positions
----                ---     ---------------                            
Robert B. Haas      51      Chairman of the Board of SFAC and
                            SFC since June 1993 and Chairman of
                            the Board of Haas Wheat & Partners
                            Incorporated, a private investment
                            firm ("Haas Wheat"), since 1992;
                            Chairman of the Board of Haas &
                            Partners Incorporated, a private
                            investment firm, since 1989.  Mr.
                            Haas is Chairman of the Board of
                            Playtex Products, Inc., NBC
                            Acquisition Corp. and Nebraska Book
                            Company, Inc. and a Director of
                            Sybron International Corporation.
                            
Thomas J. Baldwin   40      Director of SFAC and SFC since May
                            1996; Chief Executive Officer of
                            Christmas Corner, Inc. since January
                            1995 and President of PB Ventures
                            since July 1994.  Mr. Baldwin was
                            also Managing Director of Invus
                            Group, Ltd. from 1990 through
                            February 1995.
                            
Lawrence S.         43      Director of SFAC and SFC since
Benjamin                    February 1997; President and Chief
                            Executive Officer of SFAC and SFC
                            since January 1997; and President
                            and Chief Executive Officer of
                            Stella Foods, Inc. ("Stella") (a
                            former subsidiary of the Company)
                            from August, 1994 until December
                            1997.  Mr. Benjamin held various
                            positions from 1986 through August
                            1994 with operating units of Kraft
                            General Foods, Inc., including
                            President of All American Gourmet
                            Company, Vice President of Kraft
                            Frozen Products Group and Vice
                            President and General Manager of the
                            Specialty Ingredients Unit of Kraft.
                            
J. Taylor Crandall  45      Director of SFAC and SFC since
                            August 1993; Vice President and
                            Chief Financial Officer of Keystone,
                            Inc.,  an affiliate of the Company
                            ("Keystone"), since October 1986 and
                            President, Director and sole
                            stockholder of Acadia MGP, Inc.
                            (managing general partner of Acadia
                            FW Partners, L.P., the sole general
                            partner of Acadia Partners, L.P., an
                            affiliate of the Company ("Acadia"))
                            since March 1992.  Mr. Crandall also
                            is a Director of Bell & Howell
                            Company, Physicians Reliance
                            Network, Sunterra Corp., Integrated
                            Orthopedics and Washington Mutual.

<PAGE>                              16
                            
                            
Jerry M. Meyer      58      Director of SFAC and SFC since June
                            1996.  Mr. Meyer also is a Director
                            of Century Capital Financial, Inc.
                            and City National Bank in Kilgore
                            and Longview, Texas.
                            
Andrew J. Nathanson 41      Director of SFAC and SFC since
                            August 1993 and Managing Director of
                            Donaldson, Lufkin & Jenrette
                            Securities Corporation since January
                            1991.  Mr. Nathanson also is a
                            Director of Duane Reade, Inc.
                            
David G. Offensend  45      Director of SFAC and SFC since
                            August 1993 and Founder of Evercore
                            Partners, LLC since October 1995.
                            Mr. Offensend was also Managing
                            Director of Oak Hill Partners, Inc.
                            and its predecessor from April 1990
                            to September 1995; Vice President
                            and Director of Acadia MGP, Inc.
                            from March 1992 to September 1995;
                            and Vice President of Keystone from
                            March 1992 to September 1995.
                            
Marc C. Particelli  44      Director of SFAC and SFC since
                            November 1997 and Managing Director
                            of Oak Hill Partners, Inc. since
                            August 1997.  Mr. Particelli was
                            Principal of Odyssey Partners L.P.
                            from October 1995 to August 1997 and
                            Senior Vice President of Booz Allen
                            & Hamilton Inc. prior to October
                            1995.
                            
Anthony P. Scotto   52      Director of SFAC and SFC since
                            August 1993 and Managing Director of
                            Oak Hill Partners, Inc. and its
                            predecessor since March 1988 and
                            Consultant to Oak Hill Capital
                            Management, Inc. since November
                            1998.  Mr. Scotto also is a Director
                            of Ivex Packaging Corporation,
                            Holophane Corporation and Grove
                            Worldwide LLC
                            
Douglas D. Wheat    48      Director of SFAC and SFC since June
                            1993 and President of Haas Wheat
                            since November 1992; Mr. Wheat was
                            Co-Chairman of Grauer & Wheat, Inc.,
                            a private investment firm, from
                            April 1989 to October 1992.  Mr.
                            Wheat also is a Director of Playtex
                            Products, Inc.

<PAGE>                             17

Executive Officers
------------------

Set forth below are the names, ages, positions held and a brief
account of the business experience for each executive officer of SFC
and certain executive officers of the Company's subsidiaries who may
be deemed executive officers of SFC.  No family relationship exists
among the identified executive officers.  Executive officers of SFC
are elected by and serve at the discretion of the Board of Directors
of SFC.

Name                Age     Other Positions
----                ---     ---------------                            
Lawrence S.         43      See Directors.
Benjamin                    
                            
William D. Day      44      President and Chief Executive
                            Officer of H&M since August 1997.
                            Mr. Day held various positions with
                            Stella, including Vice President of
                            Operations from January 1995 through
                            August 1997.  Prior to 1995, Mr. Day
                            held various positions with Kraft
                            General Foods, Inc.
                            
Robert L. Fishbune  43      Vice President and Chief Financial
                            Officer of SFAC and SFC since May
                            1996.  Mr. Fishbune was a Partner at
                            Coopers & Lybrand L.L.P. from 1988
                            until May 1996.
                            
Henry J. Metz       48      Chairman of Metz since January 1999.
                            Mr. Metz was Chief Executive Officer
                            of Metz from August 1993 through
                            December 1998 and President of Metz
                            from February 1983 to April 1998.
                            Mr. Metz was Chief Operating Officer
                            of Metz from 1988 until August 1993.


Patrick J. O'Dea    37      President and Chief Executive
                            Officer of Mother's since April
                            1997.  Mr. O'Dea was Vice
                            President, Retail of Stella from
                            1995 to March 1997.  Prior to
                            joining Stella, Mr. O'Dea spent 12
                            years with Procter & Gamble, most
                            recently as Director of Marketing
                            for its Snack Food Business.

David E. Schreibman 31      Vice President and General Counsel
                            - Business Units of SFAC and SFC
                            since October 1998.  Mr. Schreibman
                            was Chief Counsel - Mergers and
                            Acquisitions for the Sara Lee
                            Corporation from October 1995 to
                            October 1998.  Prior to October
                            1995, Mr. Schreibman was in private
                            law practice with Sidley & Austin.
                            
                            
Lawrence J. Strain  46      President of Andre-Boudin Bakeries, Inc.
                            since January 1999. Vice President of Bakery
                            Operations from August 1990 to December 1998.
                            Prior to 1990, Mr. Strain was Vice President and
                            operating partner of BoudinInternational, Inc.

<PAGE>                                18

Item 11.   Executive Compensation

Summary Compensation Table

The following table shows compensation for the years ended December
31, 1998, December 31, 1997 and December 31, 1996 of Mr. Benjamin, the
President and Chief Executive Officer of SFAC and SFC ("CEO"), and
each of the four most highly compensated executive officers (excluding
the CEO) of the Company (including its operating subsidiaries).  The
Company has an annual bonus plan and a long-term incentive plan
pursuant to which executive officers of the Company may participate.

The compensation set forth in this table is repeated in Summary
Compensation Table listed in SFAC's Annual Report on Form 10-K for the
year-ended December 31, 1998.  The CEO and four most highly
compensated executive officers of the Company hold their respective
positions for both SFAC and SFC, however, these officers are not
compensated separately by each entity.

<TABLE>
<CAPTION>

                            Annual Compensation                        Long Term Compensation
                            -------------------                        ----------------------

                                                                         Awards       
                                                                        ------- 
    Name and                                        Other Annual    Securities Underlying   All Other
Principal Position    Year  Salary($)  Bonus($)  Compensation $ (1)  Options/SARs (#) (2)  Compensation ($)
------------------    ----  ---------  --------  ------------------ ---------------------  ----------------   
<S>                    <C>    <C>        <C>            <C>                 <C>                   <C>

Lawrence S. Benjamin  1998   625,000   1,071,000 (3)   89,000                  -               101,000 (4)
President and Chief   1997   560,000   1,015,000       84,000             1,600,000             89,000    
Executive Officer of  1996   320,000      72,000         -                   50,000               -
SFAC and SFC      

William D. Day        1998   300,000     528,000         -                     -                 8,500 (5)  
President and         1997   209,000     215,000       31,000                  -                   600    
Chief Executive       1996   145,000        -            -                   15,000                400     
Officer of H&M

Robert L. Fishbune    1998   376,000     174,000 (3)   62,000                  -                64,000 (6)
Vice President and    1997   350,000     298,000       62,000               100,000             80,000  
Chief Financial       1996   191,000     150,000       51,000               100,000             29,000   
Officer of SFAC       
and SFC

Henry J. Metz         1998   338,000     262,500         -                     -                   500 (7)
Chif Executive        1997   334,000     251,000         -                     -                 1,000         
Officer of Metz       1996   320,000     240,000       93,000                50,000             72,000
                                                                
Patrick J. O'Dea      1998   295,000     225,000         -                     -                30,300 (8) 
President and         1997   260,000     260,000         -                     -               207,000
Chief Executive       1996   184,000        -            -                   20,000                400     
Officer of Mother's    
</TABLE>
                       

(1)  The amounts set forth for Mr. Benjamin include $71,000 and
     $76,000 for tax reimbursement payments made in 1997 and
     1998, respectively. The amounts for Mr. Fishbune in 1996,
     1997 and 1998 include $43,000, $50,000 and $49,000,
     respectively, for tax reimbursement payments.  In 1997, Mr.
     Day received $31,000 in tax reimbursement.  In 1996, Mr.
     Metz received $54,000 of tax reimbursement payments and
     $39,000 for personal use of the Metz airplane.

(2)  Options were generally granted to employees of the Company, including
     the named executive officers, pursuant to the 1994 Stock
     Option Plan, which was amended in February, 1995 (the "Stock
     Option Plan").  Options granted are either non-qualified
     stock options ("NQSOs") or incentive stock options ("ISOs").
     Options granted generally have a ten year term.

<PAGE>                           19

(3)  The amounts set forth for Messrs. Benjamin and Fishbune do not include
     certain bonus amounts which will be finalized following the completion
     of the sale of H&M.

(4)  In 1998, SFC made a $90,000 contribution to a retirement
     account maintained by Mr. Benjamin.  Mr. Benjamin (and Mr.
     Fishbune) have established such accounts into which they
     contribute up to 15% of base pay (on an after-tax basis) to
     annuity or money-market funds.  The Company provides
     contributions to the employee's retirement account and a
     reimbursement for taxes incurred as a result of such
     contributions.  The amounts set forth for 1998 for Mr.
     Benjamin also include life insurance premiums ($3,000) and
     personal financial planning services ($8,000).

(5)  The amounts set forth for Mr. Day in 1998 include life
     insurance premiums ($1,500) and reimbursement of moving and
     relocation expenses ($7,000).

(6)  In 1998, SFC made a $56,000 contribution to a retirement
     account maintained by Mr. Fishbune (see note 3 for a
     description of the account).  The amounts set forth for 1998
     for Mr. Fishbune also include life insurance premiums
     ($1,500) and personal financial planning services ($6,500).

(7)  In 1998, Mr. Metz received a $500 reimbursement for
     relocation expenses.

(8)  The amounts set forth for Mr. O'Dea in 1998 include a
     $30,000 relocation allowance and payment of $300 in life
     insurance premiums.


Aggregated Options/SARs Exercised In Last Fiscal Year And Year-
End Option/SAR Values

The following table sets forth for the named executive officers
aggregated information concerning the number of shares of SFAC
common stock , par value $.01 per share ("Common Stock")
underlying unexercised stock options at December 31, 1998 and the
value of unexercised, in-the-money options at that date.

<TABLE>
<CAPTION>
                               Number of          
                              Securities           Value of
                              Underlying           Unexercised
                              Unexercised          In-the-Money
                             Options/SAR's at     Options/SAR's at
                            Fiscal Year-End (#)  Fiscal Year-End ($)
                              Exercisable/         Exercisable/
          Name                Unexercisable        Unexercisable
          ----              ------------------   -------------------
           <S>                     <C>                     <C>
          Lawrence S.         900,000/900,000              (1)
          Benjamin   
          President and Chief
          Executive Officer
          of SFAC and SFC
          
          William D. Day        18,750/6,250               (1)
          President and Chief
          Executive Officer
          of H&M
          
          Robert L. Fishbune   100,000/100,000             (1)
          Vice President and
          Chief Financial
          Officer of SFAC
          and SFC
                                          
          Henry J. Metz         153,750/31,250             (1)
          Chief Executive
          Officer of Metz 
                    
          Patrick J. O'Dea       26,250/8,750              (1)
          President and Chief
          Executive Officer
          of Mother's
</TABLE>
          
<PAGE>                            20

(1)  All of the options listed in this table have an exercise
     price of $0.021322 per share of Common Stock. Due to the
     fact that the Common Stock is not publicly traded, it is not
     currently possible to calculate a precise value for the
     Common Stock.  In October 1997, the Board of Directors of
     SFAC realized that certain previously granted stock options
     had exercise prices which exceeded the fair market value of
     the Common Stock.  In view of the diminished value, the
     Board of Directors of SFAC determined that adjusting the
     exercise price of stock options previously awarded to
     existing employees (including the named executive officers)
     was in the best interests of the Company.  On October 30,
     1997, the Board of Directors of SFAC repriced the exercise
     price of existing options from $0.726703211 to $0.021322 per
     share of Common Stock, which the Board of Directors of SFAC
     determined was not below the fair market value of the Common
     Stock.


Metz-Mother's Cake & Cookie Company Consolidated Pension Plan for
Non-Union Employees

The following table indicates the estimated annual benefits
payable upon retirement for the specified compensation and years
of service classifications under the Metz-Mother's Cake & Cookie
Company Consolidated Pension Plan for Non-Union Employees (the
"Pension Plan").  Messrs. Metz and O'Dea are the only named
executive officers participating in the Pension Plan.


Pension Plan Table For The Pension Plan


       
   Annual Final     
     Average
   Compensation                             Years of Service
   ------------                             ----------------

                                                       
                               15        20         25        30         35
                                                       
                                                       
   125,000                  $23,988   $32,547    $41,105   $49,564    $49,664
   
                                                       
   150,000                  $29,369   $39,834    $50,299   $60,764    $60,764
   
                                                       
   175,000                  $33,833   $46,466    $59,100   $71,734    $71,734
   
                                                       
   200,000                  $37,495   $52,035    $66,575   $81,115    $81,115
   
                                                       
   225,000                  $41,158   $57,604    $74,050   $90,497    $90,497
   
                                                       
   250,000                  $42,746   $60,038    $77,291   $94,564    $94,564
   
                                                       
   300,000                  $42,746   $60,018    $77,291   $94,564    $94,564
   
                                                       
   350,000                  $42,746   $60,018    $77,291   $94,564    $94,564
   
                                                       
   400,000                  $42,746   $60,018    $77,291   $94,564    $94,564
   
                                                       
   450,000                  $42,746   $60,018    $77,291   $94,564    $94,564
                                                       
                                                       
   500,000                  $42,746   $60,018    $77,291   $94,564    $94,564

<PAGE>                       21

Compensation under the Pension Plan generally refers to total
annual cash compensation (up to $160,000 for 1998, as limited by
the Code section 401(a)(17)), including pre-tax salary deferrals,
but excluding certain specified items such as compensation
received under the Metz Long-Term Incentive Compensation Plan,
the Mother's Long-Term Incentive Compensation Plan, the Metz
Annual Bonus Incentive Plan and the Mother's Annual Bonus Incentive Plan.

The amount of compensation covered under the Plan in 1998 for
Messrs. Metz and O'Dea was $160,000 (as limited by Code section
401(a)(171).  As of December 31, 1998, Mr. Metz had approximately
27 years of credited service under the Pension Plan and Mr. O'Dea
has approximately one and one-half years of credited service
under the Pension Plan.  Benefits are computed on a straight life
annuity basis and are not subject to deduction for Social
Security or other offset amounts.


Certain Employment Arrangements

The following summaries of certain employment agreements and 
arrangements are not necessarily complete and are subject to,
and are qualified in their entirety by reference to, the text of
the agreements and arrangements, copies of which are listed as exhibits
hereto and have either been filed as exhibits herewith or
incorporated by reference herein.

Employment Agreement with Mr. Benjamin
--------------------------------------

SFAC, SFC and certain subsidiaries of SFAC and SFC (collectively,
the "Employers") entered into an Amended and Restated Executive
Employment Agreement dated as of March 15, 1999 with Mr. Benjamin effective
January 1, 1999.  The Employment Agreement for Mr. Benjamin provides for
the initial term of employment to end June 30, 2001, which term will
automatically be renewed for additional one-year extension periods
unless the renewal is canceled by the Employers or Mr. Benjamin upon
six months prior notice. In addition, upon termination in certain
circumstances, the Employers will make post-termination salary and
bonus payments to such executive (or his estate).   The Employment
Agreement provides for an initial base salary of $655,000 and an
annual target bonus of 75% of base salary upon attainment
by the Company of specified EBITDA targets.

Mr. Benjamin's Employment Agreement also provides that Mr.
Benjamin may be entitled to receive, under certain circumstances,
payments to offset (at least in part) certain tax consequences to
him as a result of his exercise of stock options, the receipt of certain
payments and/or his termination in connection with a change of
control of SFAC or SFC.  These payments are limited in some circumstances
to the tax savings actually realized by the Employers
and in other circumstances by various dollar amounts.

Mr. Benjamin has agreed to be bound by certain confidentiality,
non-competition and non-solicitation restrictions set forth in
his Employment Agreement.

Employment Agreement with Mr. Fishbune
--------------------------------------

SFAC, SFC and certain subsidiaries of SFAC and SFC (collectively,
the "Employers") entered into an Amended and Restated Executive
Employment Agreement dated as of March 15, 1999 with Mr. Fishbune
effective January 1, 1999.  The Employment Agreement for Mr. Fishbune
provides for the initial term of employment to end December 31, 2000,
which term will automatically be renewed for additional one-
year extension periods unless the renewal is canceled by the Employers
or Mr. Fishbune upon six months' prior notice. In addition, upon
termination in certain circumstances, the Employers will make 
post-termination salary and bonus payments to such executive
(or his estate).  The Employment Agreement provides for an initial

<PAGE>                         22

base salary of $400,000 and an annual target bonus of 75%
of base salary upon attainment by the Company of specified EBITDA targets.

Mr. Fishbune's Employment Agreement also provides that Mr.
Fishbune may be entitled to receive, under certain circumstances,
payments to offset (at least in part) certain tax consequences to
him as a result of his exercise of stock options, the receipt of certain
payments and/or his termination in connection with a change of
control of SFAC or SFC.  These payments are limited in some circumstances
to the tax savings actually realized by the Employers and in other
circumstances by various dollar amounts.

Mr. Fishbune has agreed to be bound by certain confidentiality,
non-competition and non-solicitation restrictions set forth in
his Employment Agreement.

Employment Agreement with Mr. O'Dea
-----------------------------------

SFC, Mother's and MCC-DSD  Holdings, Inc. (parent company of
Mother's and a wholly owned subsidiary of SFC) entered into an
Amended and Restated Executive Employment Agreement with Mr.
O'Dea effective July 15, 1997.  The Employment Agreement for Mr.
O'Dea provides for the initial term of employment to end December
31, 2000, subject to earlier termination under certain enumerated
circumstances.  The Employment Agreement provides for an initial
base salary of $280,000 and an annual target bonus of 75% of base
salary upon attainment by the Company of specified performance
targets.  In addition, upon termination in certain circumstances,
the Employers will make post-termination salary and bonus payments
to such executive (or his estate).

Mr. O'Dea has agreed to be bound by certain confidentiality, non-
competition and non-solicitation restrictions set forth in his
Employment Agreement.

Severance Agreement with Mr. Day
--------------------------------

Mr. Day entered into a Severance Agreement with SFC and H&M as of
August 29, 1997.  The Severance Agreement provides that upon a
sale or change in control of H&M, that results in a termination
of Mr. Day's employment with H&M, H&M will pay Mr. Day his unpaid
base salary and payments of his base salary for the 12 month
period following such termination.

Divestiture Award Agreements
----------------------------
Certain of the executive officers and other key employees of the
Company and its subsidiaries, including Messrs. Benjamin, Day,
Fishbune and Metz have entered into Divestiture Award Agreements
with the Company.  Pursuant to these agreements, a recipient will
receive or has received a percentage of the net cash proceeds
received by the Company (after deducting fees and expenses) in
the event of a sale of various subsidiaries of the Company.

Change in Control Arrangements
------------------------------

Under the Mother's Amended and Restated Supplemental Long-Term
Incentive Compensation Plan, adopted in 1999 (the "Mother's LTIP"),
certain management employees, which include certain named executive
officers, are eligible to receive awards based upon the total value of
Mother's.  Determination of award payments under the Mother's
LTIP will be made on June 1, 2001 or earlier in the event of a
change in control.  The amounts of the awards under the
Mother's LTIP are offset, in certain cases, by amounts payable under
certain of the Deferred Bonus Agreements described below.

<PAGE>         23

Certain of the executive officers and other key employees of the
Company, including Messrs. Benjamin, Fishbune, Day, Metz and
O'Dea, entered into Deferred Bonus Agreements with the Company,
pursuant to which these employees are entitled to receive
deferred bonus payments in amounts equal to their bonus payments
under the Company's annual bonus plans.  Payments of amounts
vested that relate to bonuses earned through 1998 will be made on
March 31, 1999 and January 15, 2000.  The payments of amounts
vested that relate to bonuses earned through 1998 that are scheduled
to be paid on March 31, 1999 will be waived by Messrs. Benjamin
and Fishbune upon receipt of payments under the Divestiture Award
Agreements with such executive officers relating to H&M described
above.  In addition, with respect to Messrs. Benjamin, Fishbune and 
O'Dea, payments of amounts vested that relate to bonuses that
may be earned for 1999 and 2000 will be made on March 31, 2001.
However, in the event of a change in control, the awards that
relate to bonuses earned prior to the change in control vest
immediately and will be paid within 90 days.

Compensation of Directors
-------------------------

Employees of SFAC, SFC or their subsidiaries do not receive any
additional compensation for services as a director or on
committees of the board of directors of SFAC, SFC or any of their
subsidiaries.  Directors of SFAC, SFC or their subsidiaries are
reimbursed for reasonable out-of-pocket expenses incurred in
connection with attendance at Board of Directors and committee
meetings and are covered by director's liability insurance.  Each
of Messrs. Baldwin and Meyer also receive directors fees of
$20,000 annually.

Compensation Committee Interlocks and Insider Participation In
Compensation Decisions
----------------------

J. Taylor Crandall, Robert B. Haas, Anthony P. Scotto and Douglas
D. Wheat are all of the members of the compensation committee of
the Board of Directors of each of SFAC and SFC ("Compensation
Committee").  Each of Messrs. Crandall, Haas, Scotto and Wheat
owns a beneficial interest in or is an executive officer of one
or more of the entities that have entered into financial advisory
arrangements with SFC as described below.

Messrs. Haas and Wheat are controlling shareholders and are
Chairman of the Board and President, respectively, of Haas Wheat.
Haas Wheat was a party to a financial advisory agreement with SFC
pursuant to which Haas Wheat agreed to provide certain financial
advisory and other consulting services to SFC for a five-year
period in consideration for an annual fee of $700,000.  The Board
of Directors approved a one-year extension of the agreement in
August 1998.

J. Taylor Crandall is Vice President and Chief Financial Officer
of Keystone and is President, Director and sole stockholder of
Acadia MGP, Inc., the managing general partner of Acadia FW
Partners, L.P., the sole general partner of Acadia.  Mr. Scotto
is a Managing Director of Oak Hill Partners, Inc. and its
predecessor.  Each of Penobscot-MB Partners ("Penobscot"), an
affiliate of Acadia, and Keystone entered into a five-year
financial advisory agreement with SFC, pursuant to which they
were paid an annual fee, $200,000 per year in the case of
Penobscot and $100,000 per year in the case of Keystone. The
Board of Directors approved a one-year extension of the agreement
in August 1998.


Item 12.   Security Ownership of Certain Beneficial Owners and
           Management

All of the capital stock of SFC is beneficially owned by SFAC.
The following table sets forth, as of March 17, 1999, certain
information regarding the beneficial ownership of voting
securities of SFAC by (i) each person known by the Company to be
the beneficial owner of more than 5% of any class of SFAC's
voting securities, (ii) each of the directors and named executive
officers of SFC, and (iii) all executive officers and directors
of SFC.

<PAGE>                      24

                                               Percentage of
Name and Address of        Number of Shares    Outstanding Shares
Beneficial Owner           of Common Stock     of Common Stock (a)
----------------           ----------------    -------------------       
Acadia Partners, L.P. (b)    27,063,347            40.86%
201 Main Street
Fort Worth, Texas 76102

Keystone, Inc. (c)           9,358,502             14.13%
201 Main Street                              
Fort Worth, Texas 76102

Artal Luxembourg S.A. (d)    5,959,327              9.49%
Aandorenstraat 2
3300 Tienen, Belgium

Robert B. Haas (e)           5,881,496              9.26%
300 Crescent Court,
Suite 1700
Dallas, Texas  75201

UBS Capital LLC (f)          5,366,913              8.55%
299 Park Avenue
New York, New York 10171

DLJ Merchant Banking         3,812,562              6.07%
Partners, L.P. (g)
277 Park Avenue
New York, New York 10172

Thomas J. Baldwin               --                   --

J. Taylor Crandall (b)          --                   --

Jerry M. Meyer                  --                   --

Andrew J. Nathanson (g)         --                   --

<PAGE>                               26

David G. Offensend              --                   --

Marc C. Particelli              --                   --

Anthony P. Scotto (b)           --                   --

Douglas D. Wheat (h)         2,396,776              3.82%

Henry J. Metz (i)            1,217,750              1.93%

Lawrence S. Benjamin (j)     1,001,771              1.57%

William D. Day (k)              25,000                 *

Robert L. Fishbune (l)         125,000                 *

<PAGE>          25

Patrick J. O'Dea (m)            35,000                 *

All directors and           10,732,793             16.54%
executive officers
as a group (b)(g)

-----------------------
* Less than 1%

(a)  The holdings of all of the stockholders listed in this table may
     be diluted by the exercise of warrants set forth in footnotes
     (b), (c) and (e) below or options which, under
     employment arrangements and stock option plans approved by
     SFAC and SFC, may be granted to certain employees.  The
     Stock Option Plan makes available to certain operating
     company employees and headquarter employees options to
     purchase 5,852,917 shares of Common Stock.

(b)  Acadia's shares of Common Stock include shares owned by FWHY-
     Coinvestments VII Partners, L.P. ("FWHY"), SFC Partners,
     L.P. ("SFCP") and SFC Partners II, L.P. ("SFCII"), parties
     related to Acadia.  Acadia's shares of Common Stock also
     include 3,467,002 shares of Common Stock issuable upon the
     exercise of 8,775 Warrants issued by SFAC in favor of Acadia
     pursuant to a Warrant Agreement dated June 27, 1997.  See
     "Item 13 - Certain Relationships and Related Transactions."
     The general partner of Acadia is Acadia FW Partners, L.P.
     ("Acadia FW"), the managing general partner of which is
     Acadia MGP, Inc. ("Acadia MGP"), a corporation controlled by
     J. Taylor Crandall.  In addition, Mr. Crandall controls
     Group 31, Inc., the general partner of each of FWHY, SFCP
     and SFCII.  Therefore, Acadia FW and Acadia MGP may be
     deemed to beneficially own the shares of Common Stock held
     by Acadia, SFCP, SFCII and FWHY.  Mr. Scotto is a limited
     partner of SFCII and disclaims beneficial ownership of the
     shares of Common Stock held by SFCII.  The address of Acadia
     FW. Acadia MGP, FWHY, SFCP, SFCII and Mr. Crandall is 201
     Main Street, Fort Worth, Texas  76102.

(c)  Keystone's shares of Common Stock include 3,467,002 shares
     of Common Stock issuable upon the exercise of 8,775 Warrants
     issued by SFAC in favor of Keystone pursuant to a Warrant
     Agreement dated June 27, 1997.  See "Item 13-Certain
     Relationships and Related Transactions."  Keystone is
     controlled by Robert M. Bass.  As such, Mr. Bass may be
     deemed to beneficially own the shares of Common Stock held
     by Keystone.  The address of Mr. Bass and Keystone is 201
     Main Street, Fort Worth, Texas  76102.

(d)  The parent entity of Artal Luxembourg S.A. is Artal Group
     S.A., a Luxembourg company.

(e)  Mr. Haas' shares of Common Stock include 101,011 shares
     owned by HWP.  Specialty Subsidiary Partners, 25,253 shares
     owned by HWP Specialty Subsidiary Partners II, and 1,000,000
     shares owned by the Haas Family Long-Term Trust.  Mr. Haas'
     shares of Common Stock also include 770,445 shares of Common
     Stock issuable upon the exercise of 1,950 Warrants issued
     by SFAC in favor of Mr. Haas pursuant to a Warrant Agreement
     dated September 19, 1997.  See "Item 13 - Certain
     Relationships and Related Transactions."  The shares owned
     by HWP Specialty Subsidiary Partners and HWP Specialty
     Subsidiary Partners II also are beneficially owned by Mr.
     Douglas Wheat.

(f)  Union Bank of Switzerland owns indirectly 100% of the
     capital stock of UBS Capital LLC.

(g)  The following entities hold shares of Common Stock:  DLJ
     Merchant Banking Partners, L.P. ("DLJMBP"); DLJ
     International Partners, C.V. ("DLJIP"); DLJ Offshore
     Partners, C.V. ("DLJOP"); DLJ Merchant Banking Funds, Inc.

<PAGE>                     26

     ("DLJMBF"); DLJ First ESC L.L.C. ("DLJESC"), an "employee
     securities corporation" (as defined in the Investment
     Company Act of 1940) formed to hold securities of employees
     of DLJMBP, DLJIP, DLJOP and DLJESC); and Donaldson, Lufkin &
     Jenrette Securities Corporation (collectively, the "DLJ
     Entities"). Except for his allocable portion of the shares
     held by DLJESC, Mr. Nathanson disclaims beneficial ownership
     of the shares of Common Stock held by the DLJ Entities.

(h)  Mr. Wheat's shares of Common Stock include 101,011 shares
     owned by HWP Specialty Subsidiary Partners and 25,253 shares
     owned by HWP Specialty Subsidiary Partners II, which also
     are beneficially owned by Mr. Robert B. Haas and 150,000
     shares owned by the Carrol Wheat Jr. Children's Trust, for
     which Mr. Wheat serves as a trustee.

(i)  Mr. Metz's shares of Common Stock include 185,000 shares
     that Mr. Metz has the right to acquire upon the exercise of
     options.

(j)  Mr. Benjamin's shares of Common Stock include 925,000 shares
     that Mr. Benjamin has the right to acquire upon the exercise
     of options.

(k)  Mr. Day's shares of Common Stock include 25,000 shares that Mr.
     Day has a right to acquire upon the exercise of options.

(l)  Mr. Fishbune's shares of Common Stock include 125,000 shares that 
     Mr. Fishbune has the right to acquire upon the exercise of options.

(m)  Mr. O'Dea's shares of Common Stock include 35,000 shares that Mr.
     O'Dea has the right to acquire upon the exercise of options.


Item 13.   Certain Relationships and Related Transactions

Stockholders' Agreement

Simultaneously with the closing of the Acquisition, Haas Wheat,
Acadia, Keystone, UBS Capital, Artal Luxembourg S.A. and DLJMBP
(in some cases acting through affiliates) (collectively, with
certain of their affiliates, the "Principal Stockholders")
acquired Common Stock of SFAC at a price of $0.726703211 per
share.  On August 16, 1993, the Principal Stockholders entered
into a stockholders' agreement governing the relationships among
such stockholders (the "Stockholders' Agreement"). Subsequent
transferees of the Common Stock that are affiliates of the
Principal Stockholders or members of management have also agreed
to be bound by the Stockholders' Agreement.  The Stockholders'
Agreement imposes on the parties thereto certain restrictions and
conditions on the transfer of Common Stock, subject to certain
exceptions.  The Stockholders' Agreement provides the parties
with the right to participate in certain sales of Common Stock by
other parties.  The parties to the Stockholders' Agreement were
granted certain preemptive rights with respect to issuance of
Common Stock by SFAC and the right, in certain circumstances, to
have their Common Stock registered for public sale under the
Securities Act of 1933.  The Stockholders' Agreement also sets
forth provisions relating to corporate governance of SFAC.
Pursuant to the Stockholders' Agreement, Acadia has the right to nominate 
three Directors, Keystone has the right to nominate two Directors, Haas Wheat
has the right to nominate two Directors, and UBS Capital, Artal Belgium S.A.
and DLJMBP each have the right to nominate one Director.  Under certain
conditions Acadia and Keystone can increase the number of
Directors they can nominate.

<PAGE>               27

Certain Transactions with Stockholders of SFAC

Certain of the Principal Stockholders and their affiliates were
paid financial advisory fees by the Company in 1998 pursuant to
financial advisory agreements with the Company.  In 1998, the
Board of Directors of SFC extended the terms of the financial
advisory agreements between SFC and each of Haas Wheat, Penobscot
and Keystone for one year.  In 1998, SFC paid Haas Wheat an
annual fee of $700,000, Penobscot an annual fee of $200,000 and
Keystone an annual fee of $100,000.  See "Item 11 - Executive
Compensation - Compensation Committee Interlocks and Insider 
Participation in Compensation Decisions."

In November, 1996, SF Leasing L.L.C. (of which Acadia and
Keystone each owns a 45% interest and Haas Wheat owns a 10%
interest) purchased from Metz all of the equipment at a
manufacturing facility for $3,222,000 (which price was based on
the appraised value of such equipment), and leased such equipment
back to Metz in a transaction that was deemed by the parties to
be equivalent to an arms length transaction.  In September 1998,
SF Leasing, L.L.C. resold to Metz all of the equipment at that
manufacturing facility for $3,013,381. During 1998, SF Leasing
L.L.C. received $614,439 in rental payments from Metz.  The Board
of Directors of the Company determined that the foregoing
transactions were on terms no less favorable to the Company and
Metz than could otherwise have been obtained by the Company and
Metz in a transaction with an unaffiliated third party.

In December 1998, the Company retained Donaldson, Lufkin and
Jenrette Securities Corporation ("DLJ", an affiliate of DLJMBP)
to serve as the Company's financial advisor in connection with
its proposed sale of H&M. Upon completion of the sale of H&M, the
Company will pay DLJ approximately $1,600,000 as compensation for
such financial advisory services.

In March 1998, the Company paid DLJ $5,092,000 in connection with
the Company's refinancing of its Revolving Credit Facility and
Term Loan Facility.  DLJ acts as the Syndication Agent and
Collateral Agent under both Loan Agreements.  In 1998, the
Company paid DLJ a $100,000 retainer in connection with the
Company's currently outstanding Exchange Offers.


Tax Sharing Agreement

SFAC and SFC have entered into a tax sharing agreement pursuant
to which SFC agreed to pay to SFAC its pro rata share of SFAC's
consolidated income tax liability.  SFC and each of its
subsidiaries are also parties to a tax sharing agreement pursuant
to which each such subsidiary has agreed to pay to SFC its pro
rata share of SFC's consolidated income tax liability.

<PAGE>                          28

                              PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports
on Form 8-K

(a)(1)    Financial Statements

     Reference is made to the information set forth in Part II,
     Item 8 of this Report, which information is incorporated
     herein by reference.

(a)(2)    Financial Statement Schedules

     All schedules for which provision is made in the applicable
     accounting regulations of the Securities and Exchange
     Commission have been omitted because they are not required
     under the related instructions, are not applicable, or the
     information has been provided in the consolidated financial
     statements or the notes thereto.


(b)  Reports on Form 8-K

     The following Reports on Form 8-K were filed by the Company
     during the fourth quarter of 1998 and the first quarter of
     1999:

     (1)  A Current Report on Form 8-K dated October 14, 1998 was
          filed under Item 5 - Other Events and Item 7 -
          Exhibits:  Announcement of execution of definitive
          agreements to acquire Archway and of commencement of
          the Exchange Offers.

     (2)  A Current Report on Form 8-K dated October 26, 1998 was
          filed under Item 5 - Other Events: Announcement of the
          completion of the acquisition of Archway.

     (3)  A Current Report on Form 8-K dated March 10, 1999 was filed under
          Item 5 - Other Events and Item 7 - Exhibits:  Announcement of
          execution of definitive agreement to sell H&M.


(c)  Exhibits

     Exhibit
     Number    Description of Document
     ------    -----------------------

     3.1       Certificate of Incorporation of SFC.
               (Incorporated by reference to Exhibit 3.1 to
               Amendment No. 2 to SFC's Registration Statement on
               Form S-4 (Registration No. 33-68956))
     
     3.2       Amended and Restated By-Laws of SFC.
               (Incorporated by reference to Exhibit 3.2 to
               SFC's Report on Form 10-K for the year ended
               December 31, 1994)

     4.1       Indenture, dated as of August 16, 1993, between
               SFAC and United States Trust Company of New York,
               as Trustee ("Trustee"), governing the 13% Senior

<PAGE>                29               

               Secured Discount Debentures due 2005 issued by
               SFAC.  (Incorporated by reference to Exhibit 4.1
               to SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     4.2       Amendment No. 1 to the Indenture governing the 13%
               Senior Secured Discount Debentures, dated as of
               October 28, 1994, between SFAC and the Trustee.
               (Incorporated by reference to Exhibit 10.49 to
               SFAC's Report on Form 10-Q for the Quarter ended
               September 30, 1994)

     4.3       Registration Rights Agreement, dated as of August
               16, 1993, among SFAC, SFC and the purchasers named
               therein.  (Incorporated by reference to Exhibit
               4.3 to SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     4.4       Form of 11% Senior Subordinated Discount Debentures issued by
               SFAC.  (Incorporated by reference to Exhibit 10.27 to SFAC's
               Registration Statement on Form S-4 (Registration No. 33-68958))
     
     4.5       Form of Amendment No. 1, dated as of October 28,
               1994, to the 11% Senior Subordinated Discount
               Debentures issued by SFAC.  (Incorporated by
               reference to Exhibit 10.50 to SFAC's Report on
               Form 10-Q for the Quarter ended September 30,
               1994)

     4.6       Indenture, dated as of August 16, 1993, between
               SFC and the Trustee governing the 10 1/4% Senior
               Notes due 2001.  (Incorporated by reference to
               Exhibit 10.28 to SFC's Registration Statement on
               Form S-4 (Registration No. 33-68956))

     4.7       Amendment No. 1 to the Indenture governing the 10
               1/4% Senior Notes due 2001, dated as of October
               28, 1994, between SFC and the Trustee.
               (Incorporated by reference to Exhibit 10.47 to
               SFAC's Report on Form 10-Q for the Quarter ended
               September 30, 1994)

     4.8       Indenture, dated as of August 16, 1993, between
               SFC and the Trustee governing the 11 1/4% Senior
               Subordinated Notes due 2003.  (Incorporated by
               reference to Exhibit 10.29 to SFAC's Registration
               Statement on Form S-4 (Registration No. 33-68958))

     4.9       Amendment No. 1 to the Indenture governing the 11
               1/4% Senior Subordinated Notes due 2003, dated as
               of October 28, 1994, between SFC and the Trustee.
               (Incorporated by reference to Exhibit 10.48 to
               SFAC's Report on Form 10-Q for the Quarter ended
               September 30, 1994)

     4.10      Indenture, dated as of July 17, 1995, between SFC
               and the Trustee governing the 11 1/8% Senior Notes
               due 2002.  (Incorporated by reference to Exhibit
               to 4.6 SFAC's Report on Form 10-Q for the Quarter
               ended June 30, 1995)

     4.11      Registration Rights Agreement, dated as of July
               17, 1995, among SFC and the initial purchasers of
               the 11 1/8% Senior Notes due 2002 issued by SFC.
               (Incorporated by reference to Exhibit 4.7 to SFC's
               Report on Form 10-Q for the Quarter ended June 30,
               1995)


<PAGE>     30

     10.1      Stock Purchase Agreement, dated as of August 9,
               1993, among the sellers party thereto and SFC.
               (Incorporated by reference to Exhibit 10.1 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.2      Amendment No. 1, dated as of August 16, 1993, to
               the Stock Purchase Agreement among the sellers
               party thereto and SFC.  (Incorporated by reference
               to Exhibit 10.2 to SFAC's Registration Statement
               on Form S-4 (Registration No. 33-68958))

     10.3      Security Escrow Agreement, dated as of August 16,
               1993, by and among the sellers party thereto and
               SFC.  (Incorporated by reference to Exhibit 10.3
               to SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.4      Purchase Agreement, dated as of August 16, 1993,
               among SFAC, SFC and the purchasers named therein.
               (Incorporated by reference to Exhibit 10.4 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.5      Settlement Agreement, dated as of March 31, 1995, between
               SFC and Beledia N.V.  (Incorporated by referece to
               exhibit 10.4 to SFC's Registration Statement on Form S-4
               dated July 21, 1995)

     10.6      Financial Advisory Agreement, dated as of August
               16, 1993, among SFAC, SFC and Penobscot.
               (Incorporated by reference to Exhibit 10.10 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68758))

     10.7      Financial Advisory Agreement, dated as of August
               16, 1993, among SFAC, SFC and Keystone.
               (Incorporated by reference to Exhibit 10.11 to the
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.8      Financial Advisory Agreement, dated as of August
               16, 1993, among SFAC, SFC and Haas Wheat.
               (Incorporated by reference to Exhibit 10.12 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.9      Financial Advisory Agreement, dated as of August
               16, 1993, among SFAC, SFC and UBS Capital.
               (Incorporated by reference to Exhibit 10.13 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.10     Financing Commitment Fee Agreement, dated as of
               August 16, 1993, among SFAC, SFC and Acadia.
               (Incorporated by reference to Exhibit 10.14 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.11     Financing Commitment Fee Agreement, dated as of
               August 16, 1993, among SFAC, SFC and Keystone.
               (Incorporated by reference to Exhibit 10.15 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.12     Financing Commitment Fee Agreement, dated as of
               August 16, 1993, among SFAC, SFC and UBS Capital.
               (Incorporated by reference to Exhibit 10.16 to
               SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

<PAGE>      31

     10.13     Tax Sharing Agreement, dated as of August 16,
               1993, among SFAC, SFC and certain subsidiaries of
               SFC.  (Incorporated by reference to Exhibit 10.17
               to SFAC's Registration Statement on Form S-4
               (Registration No. 33-68958))

     10.14     Tax Sharing Agreement, dated as of August 16,
               1993, between SFAC and SFC.  (Incorporated by
               reference to Exhibit 10.18 to SFAC's Registration
               Statement on Form S-4 (Registration No. 33-68958))

     10.15     Corporate Services Agreement, dated as of June 30,
               1994, between SFAC and SFC.  (Incorporated by
               reference to Exhibit 10.14 to SFC's Report on Form
               10-K for the year ended December 31, 1994)

     10.16     Equity Investment Agreement, dated as of May 13,
               1997, by and among SFAC, Acadia, Keystone and Haas
               Wheat.  (Incorporated by reference to Exhibit
               10.93 to SFAC's Report on Form 10-Q for the
               Quarter ended June 30, 1997)

     10.17     Term Loan Agreement, dated as of March 16, 1998,
               among SFC, various financial institutions, DLJ
               Capital Funding, Inc., as syndication agent, and
               ABN Amro Bank N.V., as administrative agent.
               (Incorporated by reference to Exhibit 10.24 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1997)

     10.18     Revolving Credit Agreement, dated as of March 16,
               1998, among certain subsidiaries of SFC, various
               financial institutions, DLJ Capital Funding, Inc.,
               as syndication agent, and ABN Amro Bank N.V., as
               administrative agent.  (Incorporated by reference
               to Exhibit 10.25 to SFAC's Report on Form 10-K for
               the year ended December 31, 1997)

     10.19     Pooling Agreement, dated as of November 16, 1994,
               by and among Specialty Foods Finance Corporation
               ("SFFC"), SFC, as Master Servicer, and Chase
               Manhattan Bank ("Chase"), as Trustee (the "Pooling
               Agreement").  (Incorporated by reference to
               Exhibit 10.29 to SFAC's Report on Form 10-K for
               the year ended December 31, 1994)

     10.20     Series 1994-1 Supplement to the Pooling Agreement,
               dated as of November 16, 1994, by and among SFFC,
               SFC, as Master Servicer, and Chase, as Trustee.
               (Incorporated by reference to Exhibit 10.30 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1994)

     10.21     Series 1996-1 Supplement to the Pooling Agreement,
               dated as of August 1, 1996, by and among SFFC,
               SFC, as Master Servicer, and Chase, as Trustee.
               (Incorporated by reference to Exhibit 10.67 to
               SFAC's Report on Form 10-Q for the Quarter ended
               September 28, 1996)

     10.22     Amendment No. 1 Series to 1996-1 Supplement, dated
               as of November 29, 1996, by and among SFFC, SFC,
               as Master Servicer, and Chase, as initial VFC
               Certificate holder, and Chase, as Trustee.
               (Incorporated by reference to Exhibit 10.34 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1996)

     10.23     Amendment No. 2 to Series 1996-1 Supplement, dated
               as of December 13, 1996, by and among SFFC, SFC,
               as Master Servicer, and Chase, as initial VFC
               Certificate holder, and Chase, as Trustee.
               (Incorporated by reference to Exhibit 10.26 to
               SFC's Report on Form 10-K for the year ended
               December 31, 1996)

<PAGE>                  32

     10.24     Series 1997-1 Supplement to the Pooling Agreement,
               dated as of January 31, 1997, by and among SFFC,
               SFC, as Master Servicer, and Chase, as Trustee.
               (Incorporated by reference to Exhibit 10.36 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1996)

     10.25     Series 1998-1 Certificate Purchase Agreement,
               dated as of March 31, 1998, by and among SFFC,
               SFC, as Master Servicer and Bankers Trust Company,
               as Agent.  (Incorporated by reference to Exhibit
               10.78 to SFAC's Report on Form 10-Q for the
               Quarter ended March 31, 1998)

     10.26     Series 1998-1 Supplement, dated as of March 31,
               1998, to the Pooling Agreement, dated as of
               November 16, 1994, by and among SFFC, SFC, as
               Master Servicer, and Chase, as Trustee.
               (Incorporated by referenced to Exhibit 10.79 to
               SFAC's Report on Form 10-Q for the Quarter ended
               March 31, 1998)

     10.27     SFC Master Trust Amendment No. 5 to each of the
               Pooling Agreement and Receivables Sale Agreement
               and Amendment No. 1 to the Servicing Agreement.
               (Incorporated by reference to Exhibit 10.80 to
               SFAC's Report on Form 10-Q for the Quarter ended
               March 31, 1998)

     10.28     Amendment to Series 1998-1 Supplement, dated as of
               March 31, 1998, by and among SFFC, SFC, as Master
               Servicer, Chase, as Trustee, and Bankers Trust, as
               the sole VFC Certificate holder under that certain
               Certificate Purchase Agreement.  (Incorporated by
               reference to Exhibit 10.81 to SFAC's Report on
               Form 10-Q for the Quarter ended March 31, 1998)

     10.29     Performance Guaranty, dated as of March 31, 1998,
               by and among SFC, as Master Servicer, in favor of
               SFFC.  (Incorporated by reference to Exhibit 10.82
               to SFAC's Report on Form 10-Q for the Quarter
               ended March 31, 1998)

     10.30     Amended and Restated Receivables Sales Agreement,
               dated as of November 16, 1994, by and among SFFC,
               SFC, as Master Servicer, and certain subsidiaries
               to SFC.  (Incorporated by reference to Exhibit
               10.31 to SFAC's Report on Form 10-K for the year
               ended December 31, 1994)

     10.31     Servicing Agreement, dated as of November 16,
               1994, by and among SFFC, SFC, as Master Servicer,
               and certain subsidiaries of SFC.  (Incorporated by
               reference to Exhibit 10.32 to SFAC's Report on
               Form 10-K for the year ended December 31, 1994)

     10.32     Amendment No. 1 to SFC Master Trust Pooling and
               Servicing Agreements, dated as of December 16,
               1996, by and among SFFC, SFC, a Master Servicer,
               and Chase, as Trustee.  (Incorporated by reference
               to Exhibit 10.38 to SFAC's Report on Form 10-K for
               the year ended December 31, 1996)

<PAGE>       33

     10.33     Amendment No. 2 to SFC Master Trust Pooling
               Agreement, dated as of December 27, 1996, by and
               among SFFC, SFC, as Master Servicer, and Chase, as
               Trustee.  (Incorporated by reference to Exhibit
               10.40 to SFAC's Report on Form 10-K for the year
               ended December 31, 1996)

     10.34     Amendment No. 3 to SFC Master Trust Pooling
               Agreement, dated as of February 24, 1997, by and
               among SFFC, SFC, as Master Servicer, and Chase, as
               Trustee.  (Incorporated by reference to Exhibit
               10.41 to SFAC's Report on Form 10-K for the year
               ended December 31, 1996)

     10.35     Amendment No. 1 to Amended and Restated
               Receivables Sale Agreement, dated as of December
               16, 1996, by and among SFFC, SFC, as Master
               Servicer, and certain subsidiaries of SFC.
               (Incorporated by reference to Exhibit 10.42 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1996)

     10.36     Amendment No. 2 to Amended and Restated
               Receivables Sale Agreement, dated as of December
               27, 1996, by and among SFFC, SFC, as Master
               Servicer, and certain subsidiaries of SFC.
               (Incorporated by reference to Exhibit 10.43 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1996)

     10.37     Amendment No. 3 to Amended and Restated
               Receivables Sale Agreement, dated as of February
               24, 1997, by and among SFFC, SFC, as Master
               Servicer, and certain subsidiaries of SFC.
               (Incorporated by reference to Exhibit 10.44 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1996)

     10.38*    Amended and Restated Executive Employment
               Agreement, dated as of March 15, 1999, among SFAC,
               SFC and Lawrence S. Benjamin.

     10.39     Executive Securities Purchase Agreement, dated as
               of December 15, 1994, among Lawrence S. Benjamin,
               SFAC and SFC.  (Incorporated by reference to
               Exhibit 10.58 to SFAC's Report on Form 10-K for
               the year ended December 30, 1995)

     10.40     Stock Purchase Agreement, dated as of June 15,
               1995, between Lawrence S. Benjamin and SFAC.
               (Incorporated by reference to Exhibit 10.59 to
               SFAC's Report on Form 10-K for the year ended
               December 30, 1995)

     10.41     Securities Purchase Agreement, dated as of August
               1, 1995, between Lawrence S. Benjamin and SFAC.
               (Incorporated by reference to Exhibit 10.60 to
               SFAC's Report on Form 10-K for the year ended
               December 30, 1995)

     10.42     Amendment to Securities Purchase Agreement, dated
               as of January 2, 1996, between Lawrence S.
               Benjamin and SFAC.  (Incorporated by reference to
               Exhibit 10.61 to SFAC's Report on Form 10-K for
               the year ended December 30, 1995)

     10.43*    Amended and Restated Executive Employment
               Agreement, dated as of March 15, 1999, among SFAC,
               SFC and Robert L. Fishbune.

     10.44*    Executive Employment Agreement, dated as of July
               15, 1997, among SFC, Mother's,  MCC-DSD Holdings,
               Inc. and Patrick J. O'Dea.

<PAGE>                    34

     10.45*    Severance Agreement, dated as of August 27, 1997,
               among SFC, H&M and William D. Day.

     10.46     Stock Purchase Agreement dated as of June 15,
               1995, between Henry J. Metz and SFAC.
               (Incorporated by reference to Exhibit 10.46 to
               SFC's Registration Statement on Form S-4
               (Registration No. 33-94836))

     10.47     Form of Executive Securities Purchase Agreement
               among certain named executive officers,
               respectively, and the Principal Stockholders, SFAC
               and SFC (with schedule showing differing material
               terms for each such officer's agreement).
               (Incorporated by reference to Exhibit 10.40 SFAC's
               Report on Form 10-K for the year ended December
               31, 1993)

     10.48*    Mother's Cake & Cookie Co. Amended and Restated
               Supplemental Long Term Incentive Compensation Plan

     10.49     Stock Option Agreement, dated as of October 27,
               1997, between SFAC and Lawrence S. Benjamin.
               (Incorporated by reference to Exhibit 10.52 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1997)

     10.50     Deferred Bonus Agreement, dated as of October 27,
               1997, between SFC and Lawrence S. Benjamin.
               (Incorporated by reference to Exhibit 10.53 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1997)

     10.51     Special Bonus Agreement, dated December 21, 1997,
               between SFC and Lawrence S. Benjamin.
               (Incorporated by reference to Exhibit 10.54 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1997)

     10.52*    Retention Bonus Agreement, dated March 15, 1999,
               between SFC and Lawrence S. Benjamin.

     10.53*    Participation Award Agreement, dated as of March 15,
               1999, between Mother's and Lawrence S. Benjamin.

     10.54     Deferred Bonus Agreement, dated July 15, 1997,
               between SFC and Robert L. Fishbune.  (Incorporated
               by reference to Exhibit 10.55 to SFAC's Report on
               Form 10-K for the year ended December 31, 1997)

     10.55*    Retention Bonus Agreement, dated March 15, 1999,
               between SFC and Robert L. Fishbune.

     10.56*    Deferred Bonus Agreement, dated June 16, 1998,
               between Boudin and Larry Strain.

     10.57*    Deferred Bonus Agreement, dated July 15, 1998,
               between H&M and William D. Day.


     10.58*    Deferred Bonus Agreement, dated July 15, 1997,
               between Mother's and Patrick J. O'Dea.

<PAGE>            35

     10.59*    Retention Bonus Agreement, dated March 15, 1999,
               between Mother's and Patrick J. O'Dea.

     10.60*    Retention Bonus Agreement, dated March 15, 1999,
               between SFC and David E. Schreibman.
     
     10.61     Deferred Bonus Agreement, dated July 15, 1997,
               between Metz and Henry J. Metz.  (Incorporated by
               reference to Exhibit 10.57 SFAC's Report on Form
               10-Q for the Quarter ended March 31, 1998)

     10.62*    Form of Letter regarding Deferred Bonus Agreements
               listed as Exhibits 10.50, 10.54, 10.58 and 10.61.
               

     10.63*    Divestiture Award Agreement, dated April 8, 1998
               by and between H&M and William D. Day.

     10.64     Divestiture Award Agreement, dated October 27,
               1997, between Stella Foods, Inc. ("Stella") and
               Lawrence S. Benjamin. (Incorporated by reference
               to Exhibit 10.59 to SFAC's Report on Form 10-K for
               the year ended December 31, 1997)

     10.65     Divestiture Award Agreement, dated July 15, 1997,
               between Stella and Robert L. Fishbune.
               (Incorporated by reference to Exhibit 10.60 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1997)

     10.66*    Divestiture Award Agreement, dated March 15, 1999,
               between Metz and Robert L. Fishbune.

     10.67     Divestiture Award Agreement, dated July 15, 1997,
               between Metz and Henry J. Metz.   (Incorporated by
               reference to Exhibit 10.65 to SFAC's Report on
               Form 10-K for the year ended December 31, 1997)

     10.68*    Divestiture Award Agreement, dated March 15, 1999,
               between H&M and Lawrence S. Benjamin.

     10.69*    Divestiture Award Agreement, dated March 15, 1999,
               between Metz and Lawrence S. Benjamin.

     10.70*    Divestiture Award Agreement, dated March 15, 1999,
               between H&M and Robert L. Fishbune.

     10.71*    Divestiture Award Agreement, dated March 15, 1999,
               between Mother's and Robert L. Fishbune.
     
     10.72*    Divestiture Award Agreement, dated March 15, 1999,
               between Boudin and Robert L. Fishbune.

     10.73*    Divestiture Award Agreement, dated October 19, 1998,
               between H&M and David E. Schreibman

     10.74*    Divestiture Award Agreement, dated March 15, 1999,
               between Metz and David E. Schreibman

<PAGE>        36

     10.75*    Divestiture Award Agreement, dated March 15, 1999,
               between Mother's and David E. Schreibman

     10.76*    Divestiture Award Agreement, dated March 15, 1999,
               between Boudin and David E. Schreibman

     10.77     Amended and Restated SFAC 1994 Stock Option Plan.
               (Incorporated by reference to Exhibit 10.39 to
               SFAC's Report on Form 10-K for the year ended
               December 31, 1994)

     10.78     Amended and Restated Metz Baking Company Pension
               Plan for Non-Union Employees.  (Incorporated by
               reference to Exhibit 10.52 to SFAC's Report on
               Form 10-K for the year ended December 31, 1994)

     10.79     Amended and Restated Mother's Cake & Cookie Co. 
               Retirement Plan (Incorporated by reference to Exhibit
               10.51 to SFAC's report on Form 10-K for the year 
               ended December 31, 1994).
  
     10.80*    Coordination Document for the Metz-Mother's Cake &
               Cookie Co. Consolidated Pension Plan.

     10.81     Stock Purchase Agreement, dated as of November 26,
               1996, between SFC and B Companies Acquisition
               Corporation.  (Incorporated by reference to
               Exhibit 10.80 to SFAC's Report on Form 10-K for
               the year ended December 31, 1996)

     10.82     Stock Purchase Agreement, dated as of November 7,
               1997, by and among SFC, Saputo Group Inc. and
               Saputo Acquisition, Inc.  (Incorporated by
               reference to Exhibit 10.94 to SFAC's Report on
               Form 8-K dated as of December 22, 1997)

     10.83     Stock Purchase Agreement, dated as of October 13, 1998, by
               and among SFC, Archway and the Archway Shareholders.
              (Incorporated by reference to Exhibit 10.83 SFAC's Report
               on Form 8-K dated as of October 26, 1998)

     10.84*    Form of 1998 Annual Bonus Plan

     10.85*    Form of 1999 Annual Bonus Plan

     21.1*     Subsidiaries of SFAC

     27*       Financial Data Schedule


* Filed herewith.

<PAGE>                                37

                               SIGNATURES
 

     Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                        SPECIALTY FOODS CORPORATION


                                        By:  /s/ LAWRENCE S. BENJAMIN
                                             ------------------------
                                             Lawrence S. Benjamin
                                             President and Chief
                                             Executive Officer

                                        March 31, 1999


     Pursuant to the requirements of the Securities Exchange 
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

Signature and Title           Capacity              Date
-------------------           --------              ----                  
                                            
/s/ LAWRENCE S. BENJAMIN                         
________________________                    
Lawrence S. Benjamin       Principal Executive   March 31, 1999  
President and Chief        Officer and Director
Executive Officer


/s/ ROBERT L. FISHBUNE
----------------------
Robert L. Fishbune        Principal Financial    March 31, 1999
Vice President and          and Accounting
Chief Financial                Officer
Officer

<PAGE>                              41

Signature and Title            Capacity             Date
-------------------            --------             ----                 
                                            
/s/ ROBERT B. HAAS                              
------------------         Chairman of the       March 31, 1999 
Robert B. Haas            Board of Directors


/s/ THOMAS J.BALDWIN            Director         March 31, 1999
--------------------
Thomas J. Baldwin


/s/ J. TAYLOR CRANDALL          Director         March 31, 1999
----------------------
J. Taylor Crandall


/s/ JERRY M. MEYER              Director         March 31, 1999
------------------
Jerry M. Meyer


/s/ ANDREW J. NATHANSON         Director         March 31, 1999
-----------------------
Andrew J. Nathanson


/s/ DAVID G. OFFENSEND          Director         March 31, 1999
----------------------
David G. Offensend


/s/ MARC C. PARTICELLI          Director         March 31, 1999
----------------------
Marc C. Particelli


/s/ ANTHONY P. SCOTTO           Director         March 31, 1999
---------------------
Anthony P. Scotto


/s/ DOUGLAS D. WHEAT            Director         March 31, 1999
--------------------
Douglas D. Wheat

<PAGE>                              42


                     INDEX TO FINANCIAL INFORMATION

                                                            Page
                                                            ----
Independent Auditors' Report                                 F-2
Consolidated Balance Sheets -
  December 31, 1998 and 1997                                 F-3
Consolidated Statements of Operations -
  Years ended December 31, 1998, 1997, and 1996              F-4
Consolidated Statements of Changes in Stockholders' Equity -
  Years ended December 31, 1998, 1997, and 1996              F-5
Consolidated Statements of Cash Flows -
  Years ended December 31, 1998, 1997, and 1996              F-6
Notes to Financial Statements                            F-7 to F-23


All other financial statement schedules are omitted as not applicable or
because the required information is presented in the consolidated
financial statements or related notes.

<PAGE>                              F-1

                       INDEPENDENT AUDITORS' REPORT

The Board of Directors
Specialty Foods Corporation:

We have audited the accompanying consolidated balance sheets of
Specialty Foods Corporation and Subsidiaries as of December 31, 1998
and 1997 and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1998. These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Specialty Foods Corporation and Subsidiaries as of December 31,
1998 and 1997 and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 1998
in conformity with generally accepted accounting principles.


                                        KPMG LLP



Chicago, Illinois
March 19, 1999

<PAGE>                             F-2

                  SPECIALTY FOODS CORPORATION AND SUBSIDIARIES

                          Consolidated Balance Sheets

                                (In thousands)


                                             December 31,
                                      -------------------------        
                                            1998       1997
           Assets                           ----       ----                   
Current assets:                                     
  Cash and cash equivalents            $   5,880    $ 234,266
  Accounts receivable, net                19,327       15,504
  Inventories                             23,366       20,188
  Net assets of discontinued operations   86,632       65,192
  Other current assets                     7,234        7,157
                                         -------      -------  
          Total current assets           142,439      342,307
                                                    
Property, plant, and equipment, net      234,944      146,023
Intangible assets, net                   113,438          842
Other noncurrent assets                   39,338       23,491
                                         -------      -------
          Total assets                 $ 530,159    $ 512,663
                                         =======      =======

    Liabilities and Stockholders' Equity                
                                                    
Current liabilities:                                 
  Current maturities of long-term debt $   3,450    $   2,561
  Accounts payable                        37,779       41,925
  Accrued expenses                        80,741       80,906
                                         -------      ------- 
          Total current liabilities      121,970      125,392
                                                    
Long-term debt                           820,309      753,054
Due to Specialty Foods Acquisition       
   Corporation                             7,499        7,376
Other noncurrent liabilities              31,355       30,645
                                         -------      -------  
          Total liabilities              981,133      916,467
                                         -------      -------           
Stockholders' equity:                               
  Additional paid-in capital             275,000      275,000
  Accumulated deficit                   (725,974)    (678,804)
                                        ---------    ---------
          Total stockholders' equity    (450,974)    (403,804)
                                        ---------    ---------            
          Total liabilities and          
          stockholders' equity         $ 530,159    $ 512,663
                                       =========    =========
See accompanying notes to consolidated financial statements.

<PAGE>                            F-3

               SPECIALTY FOODS CORPORATION AND SUBSIDIARIES

                   Consolidated Statements of Operations

                    (In thousands, except per share data)


                                           Years ended December  31,
                                      ----------------------------------- 
                                            1998       1997      1996
                                            ----       ----      ----
                                                                
Net sales                              $ 742,315  $ 718,105 $ 705,996
Cost of sales                            329,567    321,851   328,422
                                         -------    -------   -------      
     Gross profit                        412,748    396,254   377,574
                                         -------    -------   -------   
Operating expenses:                              
   Selling, distribution, general
     and administrative expenses         379,794    367,051   349,463
   Amortization of intangibles             1,471        900     7,032
   Goodwill write-down                         -          -   203,304
                                         -------    -------   -------    
                                         381,265    367,951   559,799
                                         -------    -------   -------
   Operating profit (loss)                31,483     28,303  (182,225)
                                                 
Other:                                           
  Interest expense, net                   84,750     90,789    93,479
  Other expense, net                       3,129      4,729     9,132 
                                         -------    -------   -------
   Loss before income taxes              (56,396)   (67,215) (284,836)
                                                 
Provision (benefit) for income taxes        (507)       244       927
                                          -------   -------  --------
   Loss from continuing operations       (55,889)   (67,459) (285,763)
                                                 
Discontinued operations:                         
  Earnings (loss)                         10,324     31,404  (146,273)
  Gain (loss) on disposal                   (601)   133,130   (14,514) 
                                         -------   -------  ---------
                                           9,723    164,534  (160,787)
                                         -------   -------  ---------
  Income (loss) before      
    extraordinary items                  (46,166)    97,075  (446,550)
                                                 
Extraordinary items                            -     (5,714)        -
                                          -------    -------  -------      
        Net income (loss)              $ (46,166)  $ 91,361 $(446,550)
                                         ========    ======  =========

See accompanying notes to consolidated financial statements.

<PAGE>                             F-4

             SPECIALTY FOODS CORPORATION AND SUBSIDIARIES

     Consolidated Statements of Changes in Stockholders' Equity

                  (In thousands, except share data)
                                                            
                                       Additional                Cumulative
                       Common stock     paid-in   Accumulated    Translation
                      Shares   Amount   Capital      Deficit     Adjustment
                      ------   ------   -------      -------     ---------- 
Balance at    
December 31, 1995       100    $   -   $ 275,000   $ (319,656)      $ (837)
                                                            
Dividend to parent        -        -           -       (2,837)           -
Cumulative translation    -        -           -            -          837
adjustment
Net loss                  -        -           -     (446,550)           -
                        ---      ---     -------      -------          ---
Balance at
December 31,1996        100    $   -   $ 275,000   $ (769,043)      $    -
                                                            
Dividend to parent        -        -           -       (1,122)           -
Net income                -        -           -       91,361            -
                        ---      ---     -------      -------          ---
Balance at 
December 31, 1997       100    $   -   $ 275,000   $ (678,804)      $    -
                                                            
Dividend to parent        -        -           -       (1,004)           -
Net loss                  -        -           -      (46,166)           -
                        ---      ---     -------      -------          ---
Balance at
December 31, 1998       100    $   -   $ 275,000   $ (725,974)      $    -
                       ====      ===     =======      =======          ===    

See accompanying notes to consolidated financial statements.

<PAGE>                                  F-5

                SPECIALTY FOODS CORPORATION AND SUBSIDIARIES

                    Consolidated Statements of Cash Flows

                               (In thousands)

                                     Years ended December 31,
                               ----------------------------------     
                                       1998       1997        1996
                                       ----       ----        ----
Cash flows from operating activities:                          
 Loss from continuing operations   $ (55,889)  $ (67,459) $ (285,763)
 Adjustments to reconcile to net
   cash from continuing operating                       
   activities:
 Depreciation and amortization        27,204      21,087      27,868
 Debt issuance cost amortization       9,500       5,511       5,472
 Write-down of goodwill                    -           -     203,304
 Loss on disposal of property,                     
   plant, and equipment, net             436       1,521       5,747  
 Changes in assets and                           
   liabilities, net of effects
   from acquisitions of businesses:
     Accounts receivable               8,916       6,241      14,612
     Inventories                       1,338         398         214
     Prepaid expenses and              
       other assets                      274       1,576      (5,987)  
     Accounts payable                 (8,478)     (9,093)      2,064
     Accrued expenses and other      (15,537)    (13,809)     (1,627)
                                    ---------   ---------   ---------  
  Net cash used by continuing                              
   operating activities              (32,236)    (54,027)    (34,096)
  Net cash provided (used)                       
   by discontinued operations        (11,717)    (41,564)     27,055
                                    ---------   ---------   ---------          
Net cash used by operating  
     activities                      (43,953)    (95,591)     (7,041)
                                                  
Cash flows from investing activities:
  Acquisitions of businesses,    
    net of cash acquired            (135,035)          -           -
  Net proceeds from                  
    divestitures of businesses             -     384,096      69,333
  Capital expenditures               (91,445)    (36,071)    (25,218)
  Cash restricted for the purchase of
    property, plant and equipment     (8,017)          -           -
  Proceeds from sale leaseback, net        -           -      13,370
  Other                               (5,061)     (3,281)       (727)
                                    ---------   ---------   ---------  
Net cash provided (used) by 
     investing activities           (239,558)    344,744      56,758
 
                                                 
Cash flows from financing activities:                        
 Increase (decrease) in            
   revolving credit                   75,000     (78,300)      5,700
 Payments on long-term debt           (6,115)     (3,529)     (2,303)
 Payments of debt issuance costs     (12,879)          -      (3,738)
 Issuance of redeemable                 
   preferred stock                         -      19,500           - 
 Other                                  (881)       (738)     (2,837)
                                   ---------   ---------   --------- 
Net cash provided (used) by 
     financing activities             55,125     (63,067)     (3,178)
 
                                                 
Increase (decrease) in cash      
  and cash equivalents              (228,386)    186,086      46,539
Balance - beginning of year          234,266      48,180       1,641
                                   ---------   ---------   ---------  
Balance - end of year              $   5,880   $ 234,266    $ 48,180
                                   =========   =========   =========        

See accompanying notes to consolidated financial statements.

<PAGE>                                F-6

(1) Company Background

    Specialty Foods Acquisition Corporation ("SFAC") through its
    direct, wholly-owned subsidiary, Specialty Foods Corporation
    ("SFC"), is a leading producer, marketer and distributor of bakery
    products, including retail bread, cookies and other baked goods.
    The continuing operations of SFC consist of the following
    operating companies:
   
            Metz Baking Company ("Metz") - Metz is a leading retail bread
            company serving a sixteen state area of the Midwestern United 
            States. Metz's product line includes breads, buns, rolls and
            sweet goods.
          
            Mother's Cake & Cookie Co. ("Mother's") - Mother's is the second
            largest retail cookie producer and distributor in the Western
            United States.  Mother's sells its branded cookie products
            primarily to retail grocers.

            Archway Cookies, Inc.  ("Archway") - Acquired in 1998, Archway is
            one of the nation's leading cookie makers, producing more than
            one billion cookies annually.  Archway sells its branded cookie
            products through a network of independent distributors who
            resell to retail food outlets and chain stores throughout the
            U.S. and Canada.
          
            Andre-Boudin Bakeries, Inc. ("Boudin") - Boudin is a leading
            marketer of premium branded specialty breads and bread-related
            products.  Boudin sells most of its products through a chain of 46
            bakery cafes and kiosks located in California and the greater
            Chicago area.

    The Company's discontinued operations are described in Note 3.


(2) Summary of Significant Accounting Policies

        Basis of Presentation
   
    The Company's financial statements are presented on a consolidated
    basis.  All significant intercompany accounts and transactions
    have been eliminated.  Acquisitions recorded as purchases are
    included in the Consolidated Statement of Operations from the date
    of acquisition.  Divestitures reported as discontinued operations
    have been removed from continuing operations and reclassified to
    discontinued operations in accordance with Accounting Principles
    Board Opinion No. 30.
   
<PAGE>                               F-7

        Use of Estimates in the Preparation of Financial Statements

    The preparation of financial statements in conformity with
    generally accepted accounting principles requires management to
    make estimates and assumptions that affect the reported amounts of
    assets and liabilities and related disclosures at the date of the
    financial statements and the reported amounts of revenues and
    expenses during the reporting period.  Actual results could differ
    from those estimates.

        Reclassifications
   
    Certain amounts included in the 1997 and 1996 financial statements
    have been reclassified to conform to the manner in which the 1998
    financial statements have been presented.

       Cash Equivalents

    Cash equivalents represent investments in overnight bank deposits
    and commercial paper with a maturity of less than three months.
   
       Inventories
   
    Inventories are stated at the lower of cost or market.  Cost is
    determined principally by the first-in, first-out (FIFO) method.
   
        Property, Plant, and Equipment
   
    Property, plant, and equipment are stated at cost.  Depreciation
    is provided by the straight-line method over the assets' estimated
    useful lives or, in the case of leasehold improvements, over the
    terms of the leases, if shorter, as follows:

                                                  Years
                                                  -----
        Buildings and improvements                 7-40
        Machinery and equipment                    3-20
        Office furniture and vehicles              3-10
   
    Expenditures for maintenance, repairs, and minor replacements are
    charged to current operations.  Expenditures for major
    replacements and betterment are capitalized.

    The cost and related accumulated depreciation of property and
    equipment retired or sold is eliminated from the property and
    equipment accounts at the time of retirement or sale, and the
    resulting gain or loss is reported in the Consolidated Statement
    of Operations.

<PAGE>                               F-8

        Intangible Assets
   
    Intangible assets, which consist primarily of the excess of cost
    over fair value of net assets acquired, are amortized on a
    straight-line basis over the periods of expected benefit, which
    range from five to forty years.  The Company annually evaluates
    whether events and circumstances have occurred that indicate that
    the remaining estimated useful life of intangible assets may
    warrant revision or that the remaining balance of intangible
    assets may not be recoverable.  When factors indicate that
    intangible assets should be evaluated for possible impairment, the
    Company assesses recoverability of intangible assets based on its
    expectations concerning operating cash flows after interest and
    capital expenditures.  An impairment is recorded if the discounted
    value of such cash flows is less than the recorded value of the
    intangible assets.  The Company utilizes a discount rate which
    reflects its weighted average cost of capital.  Based on
    application of this methodology, an impairment was recorded in
    1996 (see Note 5).
   
        Deferred Debt Issuance Costs
   
    Deferred debt issuance costs are being amortized by the straight-
    line method over the terms of the related debt agreements and are
    classified as other noncurrent assets.
    
        Advertising Costs
   
    Advertising costs are expensed as incurred.
   
   
(3)  Discontinued Operations
   
    In March 1999, SFC signed a definitive agreement to sell its
    subsidiary, H&M Food Systems Company, Inc. ("H&M"), for $132
    million.  H&M is a producer of custom formulated, pre-cooked meat
    products that are sold primarily to national restaurant chains and
    prepared-food producers.  SFC will realize net cash proceeds of
    approximately $110 million after it has repurchased H&M's financed
    accounts receivables, established a $5 million one-year escrow and
    paid transaction costs.  Upon the closing of this transaction,
    expected in the second quarter of 1999, SFC will report a gain on
    the sale of H&M.
   
    In addition, during 1997 and 1996 the Company divested of:
   
           Stella Foods, Inc. ("Stella") - One of the largest specialty
           cheese producers in the United States with distribution to retail
           grocers, foodservice accounts, and commercial food processors.  The
           sale of Stella was completed on December 5, 1997 for $405 million.

           Gai's Seattle French Baking Company ("Gai's") - A restaurant and
           institutional bakery operation serving the northwestern United
           States.  The sale of Gai's was completed on February 24, 1997.
       
           San Francisco French Bread ("SFFB") - A sourdough hearth bread
           operation located in California.  The sale of SFFB was completed on
           March 31, 1997.

<PAGE>                                  F-9
       
           A restaurant and institutional bakery operated by Metz located in
           Illinois.  The sale of this bakery was completed on August 23, 1997.
       
           Bloch and Guggenheimer, Inc. ("B&G")/Burns & Ricker, Inc. ("B&R")
           - Pickle, pepper, and specialty snack food businesses operated under
           common management.  The sale of the combined business of B&G/B&R was
           completed on December 27, 1996.
          
    These divestitures have been reported as discontinued operations
    in the accompanying financial statements in accordance with
    Accounting Principles Board Opinion No. 30.  Operating results for
    these businesses, including revenues of $181,038, $935,424, and
    $1,333,194 for 1998, 1997, and 1996, respectively, as well as the
    applicable goodwill write-down of $152,360 in 1996, have been
    reclassified to discontinued operations.  No interest expense has
    been allocated to discontinued operations.
   
    In 1998, the earnings from discontinued operations relates solely
    to H&M.  The net loss on disposal of discontinued operations for
    1998 consists of adjustments to the estimated losses on the sale
    of Gai's, SFFB, and the Illinois restaurant and institutional
    bakery.  The net gain on disposal of discontinued operations for
    1997 consisted of the gain realized on the sale of Stella and
    Gai's, an adjustment to the estimated loss on the disposal of
    SFFB, and the loss realized on disposal of the Illinois restaurant
    and institutional bakery.  The net loss on disposal of
    discontinued operations for 1996 consisted of the realized loss on
    the sale of B&G/B&R, estimated loss on the sale of SFFB, and the
    1996 operating losses from the measurement date through the
    disposal date of B&G/B&R, SFFB and of Gai's.
   
    Net assets of the discontinued operations as of December 31, 1998
    and 1997 related to H&M and consisted of the following:

                                              1998       1997
                                              ----       ----
   Accounts receivable,
    net of allowance                       $  3,587   $  3,658
   Inventories                               16,824     15,388
   Plant and equipment, net                  53,205     41,852
   Other assets                               4,852      1,011
   Goodwill, net                             18,069     18,592
   Accounts payable                          (6,727)   (10,058)
   Accrued expenses and other liabilities    (3,178)    (5,251)
                                           --------   --------
                                           $ 86,632   $ 65,192
                                           ========   ======== 

<PAGE>                             F-10

(4) Acquisitions
   
   On October 26, 1998, SFC acquired all of the outstanding capital
   stock of Archway, a privately held Michigan corporation, from the
   previous stockholders. The purchase price totaled approximately
   $90,000 plus $26,000 to repay certain indebtedness of Archway.
   
   Additionally, in 1998, SFC also acquired four retail bakeries in
   separate transactions for a total aggregate consideration of
   $19,600.

   All of the acquisitions have been accounted for as purchases and,
   accordingly, the respective purchase prices have been allocated to
   the applicable assets and liabilities based upon their estimated
   fair values as of the acquisition date.  On a combined basis, the
   excess of the purchase price over the fair values of the net
   assets acquired was approximately $110,000 and has been recorded
   as goodwill, which is being amortized on a straight-line basis
   over 40 years.  The acquisitions were funded by a combination of
   cash and borrowings under SFC's existing revolving credit
   facility. Operating results of acquired businesses have been
   included in the Consolidated Statements of Operations since their
   respective acquisition dates.
   
   The following unaudited pro forma consolidated results of
   operations are presented as if the above acquisitions had been
   made at the beginning of the periods presented.
   
                                          1998        1997
                                          ----        ----
    Net sales                           $ 831,533   $ 828,243
    Net earnings (loss) from continuing
      operations                        $ (60,513)  $ (70,188)
                   

   The consolidated pro forma information is not necessarily
   indicative of the combined results that would have occurred had
   the acquisitions been made at the beginning of the periods
   presented or the future results of the combined operations and do
   not include the projected cost reductions and revenue increases of
   the combined operations.  Additionally, pro forma net sales
   exclude sales of Archway's franchisees and third party distributor
   mark-up.


(5)  Goodwill Write-Down
   
   As described under "Intangible Assets" in Note 2, "Summary of
   Significant Accounting Policies", the Company annually evaluates
   its intangible assets.  Based on the Company's goodwill
   assessment, a write-down of goodwill was recorded in the fourth
   quarter of 1996, which is presented in the accompanying
   Consolidated Statements of Operations as follows:
   
                                         
   Continuing operations                 $ 203,304
   Discontinued operations                 152,360
                                         ---------
                                         $ 355,664
                                         =========

<PAGE>                            F-11

   In determining the amounts of the goodwill write-down, the Company
   developed its best estimate of future operating cash flows, after
   interest and capital expenditures, over the remaining useful life
   of the goodwill.  The Company's estimates were based on recent
   historic financial trends and then current market conditions.  The
   goodwill of each business was evaluated separately for impairment.
   Individual business unit sales growth projections ranged from two
   to five percent.  Interest costs were allocated based on the
   relative level of investment in each business.  Each of the
   Company's fixed-rate debt obligations were assumed to be
   refinanced at existing interest rates.  The Company calculated the
   present value of estimated future cash flows using a discount rate
   which represented its weighted average cost of capital of 11.8% in
   1996.
   
   As of December 31, 1998, there was $109,745 of goodwill on the
   Company's balance sheet resulting from acquisitions made during
   1998.  Management believes the Company's remaining goodwill will
   be recovered over its useful life.


(6) Acquisition Liabilities

   In connection with the formation of the Company and subsequent
   acquisitions, estimated liabilities were recorded for the expected
   cash expenditures to consolidate facilities, streamline
   operations, and settle environmental, legal and tax matters.  In
   1998, $4,450 of additional estimated acquisition liabilities were
   recorded as a result of current year acquisitions. Cash
   expenditures associated with acquisition liabilities were $4,440,
   $14,043, and $10,593 for 1998, 1997, and 1996, respectively.  As
   of December 31, 1998, there are $15,797 of remaining acquisition
   liabilities, of which $4,899 is classified as current.


(7) Extraordinary Items

   In the first quarter of 1998, the Company refinanced its accounts
   receivable, revolver, and term loan financing facilities.  Due to
   this early extinguishment of debt, the Company wrote-off deferred
   debt issuance costs related to these facilities of $5,714 and has
   recorded them as extraordinary items in 1997.


(8) Accounts Receivable

   Specialty Foods Finance Corporation ("SFFC"), a wholly-owned
   subsidiary of SFC, was established for the purpose of acquiring
   substantially all of the trade accounts receivable generated by
   the operating subsidiaries of SFC.  Under the terms of the
   Accounts Receivable Facility ("Facility"), SFFC sells for cash an
   undivided interest in eligible accounts receivable.

   Under the terms of the Facility, the maximum amount of eligible
   receivables that can be sold to the Facility is $75,000.  The
   amount outstanding under the Facility varies based upon the level
   of eligible receivables and advance rate factors.  As of December
   31, 1998, the amount outstanding under the Facility was $50,000.
   The discount on receivables sold is included in other expense and
   totaled $2,445, $1,933, and $1,846 in 1998, 1997, and 1996,
   respectively.

<PAGE>                               F-12

   Trade accounts receivable are reported net of the allowance for
   doubtful accounts of $1,149 and $1,099 in 1998 and 1997,
   respectively.


(9) Inventories

   The components of inventories are as follows:

                                                 1998      1997
                                                 ----      ----                 
              Raw materials and packaging    $ 12,244  $  9,477
              Work in progress                    264       452
              Finished goods                    8,593     7,662
              Other                             3,209     2,681
                                              -------   -------
                                               24,310    20,272
              Less obsolescence and other                  
                allowances                       (944)      (84)
                                              -------   -------
                                             $ 23,366  $ 20,188
                                              =======   =======


(10)  Property, Plant, and Equipment

   The components of property, plant and equipment are as follows:

                                                 1998        1997
                                                 ----        ----              
              Land                            $  11,586   $  10,898
              Buildings and improvements         90,963      72,130
              Machinery and equipment           136,732     104,676
              Office furniture and vehicles      63,320      29,248
              Construction in progress           36,734       8,639
                                               --------    --------            
                                                339,335     225,591
              Less accumulated depreciation    (104,391)    (79,568)
                                               --------    --------
                                              $ 234,944   $ 146,023
                                               ========    ========

   Depreciation expense was $25,733, $20,187, and $20,836 in 1998,
   1997, and 1996, respectively.


(11) Restricted Cash
   
   In 1998, the Company entered into various agreements to purchase
   certain machinery, equipment and building improvements.  Funds
   were designated for these purchases and deposited in an escrow
   account which amounted to $7,915 as of December 31, 1998.  The
   escrow account is classified as a noncurrent asset.

<PAGE>                             F-13

(12) Accrued Expenses

   The components of accrued expenses are as follows:

                                             1998      1997
                                             ----      ----                    
             Accrued payroll              $  8,782  $  6,229
             Other taxes payable             4,087     3,085
             Workers' compensation          11,896     9,768
             Compensated absences            7,491     6,236
             Accrued interest               21,869    21,518
             Acquisition liabilities         4,899     7,582
             Other                          21,717    26,488
                                           -------   -------
                                          $ 80,741  $ 80,906
                                           =======   =======


(13)    Long-Term Debt

   Long-term debt consists of the following:

                                             
                                              1998       1997
                                              ----         ----               
     Revolving Credit Facility             $  75,000  $       -
     Term Loan Facility                      169,080    173,750
     10 1/4% Senior Notes due 2001           225,000    225,000
     11 1/8% Senior Notes due 2002           150,000    150,000
     11 1/4% Senior Subordinated Notes       
     due 2003                                200,000    200,000
     Other                                     4,679      6,865
                                             -------    -------   
                                             823,759    755,615
     Less current portion                     (3,450)    (2,561)
                                             -------    -------
                                           $ 820,309  $ 753,054
                                             =======    =======

   During March 1998, the Company refinanced its Revolving Credit
   Facility ("Revolver") and Term Loan Facility ("Term Loan") with a
   new syndicate of financial institutions.  Both facilities mature
   on January 31, 2000. Proceeds from these facilities can be used to
   finance working capital requirements and are available for other
   corporate purposes, including acquisitions.
   
   As required under the terms of the Revolver and Term Loan
   Agreements, the Company reduced the commitment amount available
   under the Revolver from $125,000 to $122,801 and the Term Loan was
   reduced to $169,080 with excess asset sale proceeds during 1998.
   The Company is required to make quarterly payments on the Term
   Loan in the amount of $434.
   
   The Revolver bears an interest rate of LIBOR plus 250 basis
   points.  The Revolver is secured by the assets of the operating
   companies.  Amounts outstanding under the Revolver totaled $75,000
   as of December 31, 1998.  In addition to amounts outstanding under
   the Revolver, letters of credit commitments totaling $10,200 as of
   December 31, 1998 reduce available funds under the Revolver.

<PAGE>                            F-14
   
   The Term Loan bears an interest rate of LIBOR plus 375 basis
   points.  The Term Loan is secured by the assets of SFC and a
   pledge of the stock of each of the direct subsidiaries of SFC.
   
   Semi-annual interest payments are required through maturity on the
   10 1/4% Senior Notes and the 11 1/4% Senior Subordinated Notes on
   February 15 and August 15 each year.  Semi-annual interest
   payments are required through maturity on the 11 1/8% Senior Notes
   on April 1 and October 1 each year.
   
   The 10 1/4% and 11 1/8% Senior Notes and the 11 1/4% Senior
   Subordinated are unsecured. During the fourth quarter of 1998,
   the Company commenced private exchange offers for its publicly
   held debt.  Under the offers, the existing debt of SFC held by
   certain holders would be exchanged for the debt of a new intermediate
   holding company.  SFC is offering certain holders of its existing notes
   the opportunity to exchange their existing debt for new notes
   (the "New Notes") of another intermediate holding company.  The New Notes
   have substantially the same terms and covenants as the existing notes.
   In addition, SFC is seeking the consent of its Term Loan and Revolver
   lenders to amend existing agreements to conform to the new holding
   company structure.  The proposed exchange offer has not been consummated.
   Remaining on the Company's balance sheet are unamortized deferred
   financing fees of approximately $14,000 related to the existing debt that
   is subject to the exchange offer.  Upon the completion of the exchange
   offer, this amount would be written off as an extraordinary item.

   Other long-term debt consists primarily of miscellaneous notes
   payable with interest rates ranging from 7.9% to 10.5% at December
   31, 1998.

   The provisions of the Term Loan and the Revolver contain covenants
   which require the Company to maintain specified leverage and
   interest coverage ratios. The Company also has other limitations
   regarding capital expenditures, sales of assets, loans and
   investments, encumbrances of assets and assumption of additional
   indebtedness.  In addition, the agreements governing the Term Loan
   and the Revolver and the indentures governing the Senior Notes and
   the Senior Subordinated Notes contain certain restrictive
   covenants, including, to the detriment of the holders of the SFAC
   Senior Debentures and the SFAC Senior Subordinated Debentures,
   certain covenants that restrict or prohibit (with de minimis
   exceptions) SFC's ability to pay dividends or make other
   distributions to SFAC.  Specifically, as a result of the Company's
   net losses and accumulated deficit, SFC's ability to make
   distributions to SFAC under the indentures of the Senior Notes and
   the Senior Subordinated Notes has been impaired and these
   indentures will require modification before any such distribution
   to SFAC can be made.

<PAGE>                            F-15

   Aggregate maturities of debt are as follows:

          1999                             $   3,450
          2000                               243,308
          2001                               225,234
          2002                               150,259
          2003                               200,277
          Thereafter                           1,231
                                            --------
              Total aggregate maturities   $ 823,759
                                            ======== 

   Cash paid for interest was $82,508, $85,603, and $90,533 for the
   years ended December 31, 1998, 1997, and 1996, respectively.


(14) Financial Instruments
  
       Concentration of Credit Risk
    
   The Company's exposure to credit loss in the event of nonpayment
   of accounts receivable by customers is represented in the amount
   of those receivables.  The Company performs ongoing credit
   evaluations of its customers' financial condition and generally
   requires no collateral from those customers.  As of December 31,
   1998, the Company does not believe it has any significant
   concentration of credit risk with respect to its trade accounts
   receivable.

       Financial Instruments With Off-Balance-Sheet Risk

   During 1998, the Company entered into interest rate swap
   agreements to reduce its exposure to changes in the cost of its
   variable rate borrowings as required by its Term Loan Agreement.
   Under the interest rate swap agreements, which expire in January
   2000, the Company receives floating rate payments from the
   counterparties based upon the three-month LIBOR and makes fixed
   rate payments at 5.753% and 5.765% to the respective
   counterparties.  The payments are calculated based upon a notional
   principal amount of $100,000.  The net differential of interest to
   be paid or received under the remaining agreements is recognized
   as incurred.  In 1998, net payments totaling $30 were made to the
   counterparties.  Off-balance-sheet risk from the interest rate
   swap agreements at December 31, 1998 includes the risk associated
   with changes in market values and interest rates.  The
   counterparties to the agreements are major financial institutions.

<PAGE>                               F-16

      Fair Value of Financial Instruments
   
   The Company's financial instruments include long-term debt and the
   interest rate swap agreements.  The estimated fair value and
   carrying amount of long term debt including current maturities at
   December 31, 1998 are as follows:

                                                           Estimated
                                             Carrying         Fair
                                              Amounts        Values
                                             --------      ---------
             Financial liabilities:
               Long-term debt, including
                  current maturities         $ 823,759      $ 696,259
               Interest rate swap agreements $       -      $    (906)

   The fair value of long-term debt and the interest rate swap
   agreements have been determined based on quoted market prices and
   market interest rates at December 31, 1998.


(15)    Lease Commitments

   The Company leases equipment and facilities under various
   noncancelable operating leases.  Future minimum lease payments
   under all noncancelable operating leases are as follows:

              1999                           $ 11,668
              2000                             10,879
              2001                              9,530
              2002                              8,337
              2003                              6,406
              Thereafter                       24,443
                                               ------
               Total minimum lease payments  $ 71,263
                                              =======

   Total rental expense for 1998, 1997, and 1996 was $17,318,
   $19,557, and $17,018 respectively.

   In 1998, the Company purchased certain transportation and
   production equipment which had been subject to operating lease
   arrangements. The cost of purchasing these leased assets was
   approximately $35,400.

<PAGE>                            F-17

(16)    Income Taxes

   The provision (benefit) for income taxes for 1998, 1997, and 1996
   relates to state and Canadian income taxes payable (refundable).
   An effective tax rate reconciliation is not presented because the
   Company has no federal tax currently payable or deferred income
   tax expense due to its net operating loss position.

   The components of net deferred taxes are as follows:

                                             1998           1997
                                             ----           ----              
        Deferred tax assets related to:
          Accrued expenses and other     
            liabilities                  $  24,607      $  20,670   
          Net operating losses and credits  63,820         44,514
          Other                              2,471          4,590
                                           -------         ------
            Total deferred tax assets       90,898         69,774
                                               
         Valuation allowance                72,906         53,878
                                           -------         ------  
            Total net deferred tax assets   17,992         15,896
                                               
         Deferred tax liabilities related to:                    
          Depreciation and amortization     17,992         15,541
          Inventories                            -            355
                                            ------         ------
             Total deferred tax             17,992         15,896
               liabilities                  ------         ------
             Net deferred tax            $       -       $      -
               asset (liability)            ======         ====== 


   At December 31, 1998, the Company has federal net operating loss
   carryforwards of $163,000 including $9,000 of loss carryforwards
   from predecessor companies, which are subject to limitations that
   may substantially limit future utilization.  Also at December 31,
   1998, the Company has $91,000 of state net operating loss
   carryforwards and $3,000 of state tax credit carryforwards.  The
   net operating loss carryforwards and state tax credits exclude
   H&M's allocable portions.  Net operating loss and credit
   carryforwards expire in varying amounts through the year 2018.

   Cash paid (received) for income taxes was $(613), $123 and $432
   for 1998, 1997, and 1996, respectively.

<PAGE>                             F-18

(17)    Litigation and Other Contingencies

         Litigation
   
   The Company has retained liability with respect to a proceeding
   against Stella.  In 1993, Stella was alleged to have
   misappropriated confidential and proprietary trade secrets of a
   competitor and infringed upon the competitor's purported
   trademark.  Stella has filed a cross complaint against the
   competitor for predatory pricing practices.  The proceeding is
   scheduled for trial during the second quarter of 1999.  The
   Company continues to vigorously defend against the allegations and
   pursue its claim.  Although any litigation has an element of
   uncertainty, management believes the ultimate resolution of this
   matter will not have a material adverse effect on the Company's
   financial condition or results of operations.

   In the normal course of business activities, the Company is a
   party to certain legal proceedings and claims.  Although the
   outcome of such matters cannot be determined with certainty, it is
   management's opinion that the final outcome will not have a
   material adverse effect on the Company's financial position or
   results of operations.
 
         Other

   Various operating subsidiaries are self-insured or retain a
   portion of losses with the respect to workers' compensation
   claims.  Accordingly, the Company provides irrevocable letters of
   credit or surety bonds which total $10,200 at December 31, 1998 to
   state regulatory agencies or insurance companies.


(18)  Employee Benefits

        Pension and Other Post-retirement Benefits

   Certain of the operating subsidiaries sponsor single-employer, non-
   contributory, defined benefit pension plans. The operating
   subsidiaries also participate in numerous multi-employer, non-
   contributory, defined benefit pension plans.  Substantially all of
   the Company's employees are covered by the defined benefit or
   multi-employer plans.  Certain of the subsidiaries also sponsor
   post-retirement health care benefit plans.

<PAGE>                         F-19

   Benefits for employees are based on various factors including
   length of service and average compensation.  Contributions are
   funded to the extent deductible for federal income tax purposes.
   The following table provides a reconciliation of the changes in
   the plans' benefit obligations and fair value of assets during the
   years ended December 31, 1998 and 1997 and a summary of the funded
   status as of December 31, 1998 and 1997:
   
                                       Pension Plans    Post-retirement Medical
                                       --------------------------------------- 
                                       1998      1997         1998      1997
                                       ----      ----        ----       ----
 Change in Benefit Obligation:                                   
     Benefit obligation
       at beginning of year         $  61,072  $  54,218   $  8,226  $  9,886
     Service cost                       2,248      1,914        393       345
     Interest cost                      4,111      3,956        542       602
     Participant contributions              -          -         29         -
     Plan amendments                       35      1,220          -         -
     Settlement (gain) or loss              -          -          -    (1,295)
     Benefits paid                     (3,609)    (2,527)      (591)     (339)
     Actuarial (gain) or
        loss                            1,371      2,291        111      (973)
                                      -------    -------    -------   ------- 
              Benefit obligation     
                at end of year      $  65,228  $  61,072   $  8,710  $  8,226
                                      =======    =======    =======   =======  
                                                         
    Change in Plan Assets                                
     Fair value of plan assets            
      at beginning of year          $  62,167  $  57,854   $      -  $     -
     Actual return on plan assets       7,368      6,840          -        -
     Benefits paid                     (3,609)    (2,527)         -        -
     Other                              1,028          -          -        - 
                                      -------    -------    -------  ------- 
    Fair value of plan 
     assets at end of year          $  66,954  $  62,167   $      -  $     -
                                      =======    =======    =======  =======
                                                          
    Summary of Funded Status                                     
     Funded status                  $   1,726  $   1,095   $ (8,710) $ (8,226)
     Unrecognized transition
        amount                           (274)      (381)         -         -
     Unrecognized prior 
        service cost                    1,447      1,561          -         -
     Unrecognized net
        gain or (loss)                (11,593)   (11,241)    (3,243)   (4,816) 
                                      -------    -------    -------   -------
                                                          
    Accrued benefit cost            $  (8,694) $  (8,966)  $(11,953) $(13,042)
                                      =======    =======    =======   =======
   Amounts Recognized in                                 
    Consolidated Balance Sheets
      Accrued expenses              $   2,842   $  2,464   $      -  $    251
      Other non-current
         liabilities                    5,852      6,502     11,953    12,791
                                      -------    -------    -------   -------

                                    $   8,694   $  8,966   $ 11,953  $ 13,042
                                      =======    =======    =======   =======

<PAGE>                              F-20   

   One of the Company's qualified pension plans had a projected
   benefit obligation in excess of plan assets as of December 31,
   1998 and 1997.  The projected benefit obligation, accumulated
   benefit obligation and fair value of plan assets for this plan was
   $13,815, $13,815, and $12,675, respectively, as of December 31,
   1998 and $12,669, $12,669, and $11,616, respectively, as of
   December 31, 1997.
   
   The following table provides the components of net periodic
   benefit cost for the plans for the fiscal years ended December 31,
   1998, 1997 and 1996:
   
                               Pension Plans     Post-retirement Medical
                             -------------------------------------------
                              1998    1997    1996    1998   1997    1996
                              ----    ----    ----    ----   ----    ----      
      Service cost - benifits                                            
       earned during the       
        period             $  2,248 $ 1,914 $ 2,116 $  393 $  345  $  446
                                                            
      Interest cost on the  
        benefit obligation    4,111   3,956   3,658    542    602     661
 
                                                            
      Expected return on     
        plan assets          (6,175) (5,087) (6,290)     -      -       -
                                                            
      Net amortization and  
        deferral                              1,583                  (832)
       Transition amount       (107)   (107)      -      -      -       -
       Prior service costs      149     146       -      -      -       -
      (Gain)/loss              (498)   (607)      -   (805)  (292)      -
                               -----   -----  -----   -----  -----  -----      
      Net periodic benefit   
       cost                $   (272) $  215 $ 1,067 $  130 $  655 $   275
                               =====  =====   =====  =====  =====   =====    
   
   Gains and losses in excess of 10% of the greater of the benefit
   obligation or the market-related value of assets are amortized
   over the average remaining service period of active participants
   for pension plans.  Gains and losses in excess of 10% of the
   benefit obligation are amortized over five years for the post-
   retirement plan.
   
   The Company sponsors defined benefit health care plans that
   provide post-retirement medical and life benefits to certain full-
   time employees who meet minimum age and service requirements.  The
   plans are contributory, with retiree contributions adjusted
   annually, and contain other cost-sharing features such as
   deductibles and co-insurance.  The accounting for these plans
   anticipates future cost-sharing changes to the written plans that
   are consistent with the Company's expressed intent to increase the
   retiree contribution rate annually for the expected general
   inflation rate for the year.

<PAGE>                              F-21   

   The assumptions used in the measurement of the Company's benefit
   obligations are shown in the following table:
 
                                                              Post-retirement
                                          Pension Plans            Medical
                                        --------------------------------------
                                        1998       1997       1998        1997
                                        ----       ----       ----        ---- 
   Discount Rate (Y/E Disclosures)      6.75%      7.00%   6.50% to 6.75% 7.00%
   Salary Scale                         4.00%      4.00%       N/A         N/A
   Long Term Rate of Return on Assets  10.00%      9.00%       N/A         N/A
   

   For measurement purposes, a 9.5% annual rate of increase in the
   per capita cost of covered health care benefit was assumed for
   1998.  The rate is assumed to decrease gradually to 5.5% for 2002
   and remain at that level thereafter.
   
   The health care trend rate used to determine the pre-age 65
   accumulated post-retirement benefit obligation was 14% for 1998,
   decreasing to 6% by the year 2002 and beyond.  A flat 16 % rate
   per year is used for the post-age 65 obligation.  Increasing the
   assumed health care trend rate by 1% each year would increase the
   accumulated post-retirement benefit obligation as of December 31,
   1998 and 1997 approximately $664 and $658, respectively, and the
   aggregate of the service and interest cost components of 1998,
   1997, and 1996 net retiree healthcare expense approximately $97,
   $98, and $134 respectively.   Decreasing the assumed health care
   trend rate by 1% each year would decrease the accumulated post-
   retirement benefit obligation as of December 31, 1998
   approximately $547, and the aggregate of the service and interest
   cost components for 1998 net retiree healthcare expense
   approximately $79.
   
   Certain of the operating subsidiaries also participate in various
   multi-employer defined benefit pension plans on behalf of
   employees pursuant to various collective bargaining agreements.
   Contributions to these plans included in continuing operations
   amounted to approximately $15,441, $14,822, and $14,535 for the
   years ended December 31, 1998, 1997, and 1996, respectively.
   
   The Company has various defined contribution plans which cover non-
   bargaining unit employees meeting eligibility requirements.
   Contributions to these plans were approximately $1,915, $1,444,
   and $1,296 for the years ended December 31, 1998, 1997, and 1996,
   respectively.
          
          Long Term Incentive Compensation Plans

   The Company has adopted long-term incentive compensation plans for
   several of its businesses which provide for cash awards upon the
   achievement of specified earnings or enterprise values.  Amounts
   related to long-term incentive plans will be accrued when amounts
   due participants vest.  As of December 31, 1998, no amounts have
   been accrued.

<PAGE>                          F-22

 (19) Related Party Transactions

      Certain Transactions with Stockholders of and Affiliates of
      Stockholders of SFAC

   Certain of SFAC's stockholders and their affiliates previously
   entered into financial advisory arrangements (the "Financial
   Advisory Agreements") with SFAC's subsidiary, SFC.  Haas Wheat &
   Partners ("Haas Wheat"), Penobscot ("Penobscot"), an affiliate of
   Acadia Partners, L.P. ("Acadia"), and Keystone, Inc. ("Keystone")
   each entered into such Financial Advisory Agreements.  In August
   1998, the Board of Directors approved a one-year extension of the
   financial advisory arrangements.  Under the terms of the Financial
   Advisory Agreements, SFC pays Haas Wheat an annual fee of $700 (a
   portion of which Haas Wheat is obligated by agreement to remit to
   Acadia), Penobscot an annual fee of $200, and Keystone an annual
   fee of $100.

   In 1996, SF Leasing L.L.C. (of which Acadia and Keystone each owns
   a 45% interest and Haas Wheat owns a 10% interest) purchased from
   Metz all of the equipment at a manufacturing facility for $3,222
   (which was based on the appraised value of such equipment) and
   leased such equipment back to Metz.  During 1998, the Company made
   rental payments totaling $614 to SF Leasing L.L.C. for equipment
   that was leased by the Company.   In September 1998, the Company
   purchased from SF Leasing L.L.C. this equipment for an aggregate
   amount of $3,013.

   In June 1997, the Company retained Donaldson, Lufkin & Jenrette
   Securities Corporation ("DLJ", an affiliate of DLJMBP, which is a
   stockholder of the Company), to serve as the Company's financial
   advisor in connection with its sale of Stella.  The Company paid
   DLJ approximately $5,400 as compensation for such financial
   advisory services.  In December 1998, DLJ was retained as the
   financial advisor for the sale of H&M.  Upon the completion of the
   H&M sale, the Company will pay DLJ approximately $1,600.

   In March 1998, the Company paid DLJ $5,092 in connection with the
   Company's refinancing of its Revolving Credit Facility and Term
   Loan Facility.  DLJ serves as the Syndication Agent and Collateral
   Agent under both Loan Agreements.
   

(20) Other Expense (Income)

     Other expense (income) is comprised of the following:
 
                                          1998      1997       1996
                                          ----      ----       ----   
     Loss on disposal of property,
        plant and equipment           $    436   $  1,521  $  5,747
     Discount on receivables sold        2,445      1,933     1,846 
     Other                                 248      1,275     1,539
                                         -----      -----     -----        
                                      $  3,129   $  4,729  $  9,132
                                         =====      =====     =====