Israel-based Eshbal Functional Foods is strategically leveraging acquisitions within the North American market to fuel growth and aim to triple its revenue over the next two years.
This better-for-you bakery business recently secured a listing in Canada through a reverse takeover of Hakken Capital Corp. Furthermore, it is gearing up to introduce its gluten-free pitta bread in the US market, with an anticipated launch in September.
Eshbal has signed letters of intent (LOI) this year to acquire two US bakery brands—Dare to be Different Foods and Gluten Free Nation. The plan is to use these acquisitions not only to promote existing product lines but also to facilitate the distribution of Eshbal’s own brands.
More acquisitions are likely as part of Eshbal’s growth strategy in North America. CEO Tomer Bar Meir stated that there are currently no plans to expand beyond this region, as the company focuses on enhancing its operations and sales in Israel.
“Once we complete any of the M&A deals, they will quickly contribute local revenues. We will not only benefit from the revenues of the acquired companies but also introduce products from Israel through these businesses into the market,” he explained.
“Regardless of the speed of M&A closures, I can assure you we will have more LOIs in the near future,” he added.
Currently, Eshbal’s revenues are sourced from its independent operations in Israel. However, the upcoming acquisition of Swonder Bread, a local company, will soon reflect in revenue contributions.
Last year’s revenue reached approximately $11.5 million, with projections of $12.5 million to $14 million for 2025. Targets have been established at $19 million to $22 million for 2026, followed by $31 million to $35 million in 2027, according to company presentations.
The firm is expected to provide its first results as a publicly listed entity in Canada for the second quarter by the end of August, according to Meir.
At this stage, Eshbal has no plans to establish its own manufacturing facility in North America. Instead, the company opts to work with co-manufacturing partners.
“We are collaborating not just with one, but several co-producers. Currently, one in Miami suits our needs perfectly for pitta bread,” he noted.
“Our primary focus remains North America, despite a small opportunity in Mexico that we ultimately decided to bypass,” he stated.
“We considered various options, including US production for sales in both the US and Canada or potentially Canadian production due to currency fluctuations and subsequent exports to the US. However, trade tariffs have created a fluid situation,” he explained.
Eshbal’s roots date back to the 1940s, when it began repackaging food commodities like flour for retail. Following a change of ownership in 2014, the company pivoted to focus on better-for-you products, particularly in the gluten-free and functional bakery segments, along with dietary supplements, Meir elaborated.
Its retail brands encompass Barili, offering pitta bread, buns, cookies, and breads, in addition to Caragil and Confectioner, known for their flours and cake mixes. Eshbal also supplies private label products and caters to the foodservice sector.
