Israel-based Eshbal Functional Foods is banking on acquisitions in the North American market to drive growth and triple revenue in the next two years.
The better-for-you bakery business gained a listing in Canada this year following a reverse takeover of Hakken Capital Corp. and is now preparing to take its gluten-free pitta bread into the US market with an expected launch in September.
Eshbal has also signed letters of intent (LOI) this year to acquire two US bakery brands – Dare to be Different Foods and Gluten Free Nation. It plans to use those companies to market their existing product lines but also to serve as a conduit for the sale and distribution of its own brands.
More acquisitions are likely on the cards to foster Eshbal’s Growth in North America, CEO Tomer Bar Meir told Just Food. However, there are no plans as it stands to expand outside of that region as the business seeks to complement its operations and sales in Israel.
“Once we can complete both any of the M&As they will immediately give us local revenues. It’s not only the acquired revenues from the company purchased but we will also be able to add the products that we want from Israel through these companies into the market,” he said.
“That’s what we hope to do. Regardless of what M&A will close, and how fast, I can promise you, we’ll have more LOIs in the future, hopefully the near future.”
Eshbal’s revenues are currently generated from the standalone business in Israel but will also soon reflect the contribution from Swonder Bread, a local company acquired in June.
Revenues last year were the equivalent of $11.5m and are expected to reach $12.5m to $14m in 2025. Targets have been set for $19-22m in 2026 and $31-35m the following year, according to a presentation.
The first results as a listed company in Canada – for the second quarter – are due to be submitted at the end of August, Meir said.
Eshbal has no plans as yet to establish its own manufacturing facility in North America and will instead use co-manufacturing partners.
“We are working not with one co-producer but with a few. There’s one that we like the most at the moment that suits our needs, which is in Miami [for pitta bread],” he said.
“Our focus is in North America, although we had a small opportunity in Mexico but we decided that it takes us out of the focus.
“We had a lot of debate on what to do – US production, selling to the US and Canada, or maybe do Canadian production because of the currency ratio, and then exporting to the US. But then Trump and tariffs, so everything is very fluid.”
Esbhal dates its origins to the 1940s when it repackaged food commodities such as flour for the retail trade. It then changed ownership in 2014, turning its focus to better-for-you products, especially gluten-free and functional bakery, and dietary supplements, Meir explained.
Its retail brands include Barili in pitta bread, buns, cookies and breads, along with both Caragil and Confectioner in flours and cake mixes. It also provides private label and supplies the foodservice channel.
