Hilton Food Group is set to establish its inaugural manufacturing plant in Canada following a lucrative long-term protein supply agreement with leading grocery retailer Walmart.
In its expansion strategy, the London-listed company, known for its private-label products, will open a new facility in eastern Canada under its newly-formed subsidiary, Hilton Foods Canada. This plant is projected to commence operations in 2026, and will primarily supply Walmart with beef, lamb, pork, and seafood. Additionally, the agreement also entails the future provision of value-added products.
Hilton Food currently serves various markets, including the UK, specific countries in continental Europe, Australia, and New Zealand.
The company mentioned in a statement, “This partnership signifies a significant milestone for both Walmart and Hilton Food as we respond to the growing consumer demand for high-quality, affordable, and sustainable protein products across Canada.”
Hilton Food, which recently acquired Dutch salmon processor Foppen, already supplies seafood to the US market. Nevertheless, the company does not have any manufacturing presence in the US.
CEO Steve Murrells expressed, “This agreement with Walmart further expands our global presence and will mark our first manufacturing facility in North America. Hilton Food and Walmart share the same commitment to sustainability, and we are excited to provide Walmart with Hilton Food’s renowned range of quality products and exceptional service.”
The new Canadian facility will be financed by Hilton Foods Canada, with the necessary investments in plant and equipment covered through debt. The spending plan is set to commence in 2024 and continue through 2025.
Sam Wankowski, Chief Merchandising Officer of Walmart Canada, praised the partnership, stating that it will enable consumers to enjoy meat and seafood at affordable prices while using sustainable packaging.
Murrells also confirmed that Hilton Food is successfully overcoming challenges in the seafood sector marked by hyperinflation. In its recently released trading update for the 28 weeks ending on July 6, the company reported a 1.4% rise in adjusted operating profit (£41.8m or $52.1m) based on a 5.2% increase in group revenue (£2.1bn), driven by pricing strategies. However, adjusted profit before tax decreased by 22.2% to £26.8m.
Furthermore, Hilton Food is streamlining its operations in the meat alternatives sector, with plans to consolidate production at its remaining facility in Oosterhout, the Netherlands, following the closure of its Oss plant.