Eshbal Functional Food Inc. (TSXV: ESBL) is moving into 2026 with an expansion strategy designed to translate an established Israeli manufacturing base into a scalable North American platform for gluten-free and “better-for-you” foods. In a year-end message, CEO Tomer Bar Meir positioned 2025 as a pivotal year, marked by the company’s public listing and the operational decisions needed to accelerate growth while improving profitability.
Eshbal describes itself as a food-tech operator with more than 20 years of proprietary process development and a broad product engine, having developed more than 300 SKUs, including more than 80 in “better-for-you” segments. The company operates from a roughly 60,000-square-foot production facility in Israel, with an in-house lab and food engineering support. Management also highlighted continued revenue momentum, reporting 2024 revenue of US$11.4 million and forecasting 2025 revenue of up to US$14 million, with an estimated gross margin of 24 per cent.
A public-market platform built to fund growth
The strategic logic behind the April 2025 TSX Venture Exchange listing, according to management, was straightforward: North America is too large to enter cautiously. Capital, inventory, and commercial execution capacity are required to compete in gluten-free bakery, where consumers demand taste parity and retailers expect strong service levels. Eshbal’s plan leans into that reality by combining platform acquisition, local manufacturing, and multi-channel go-to-market execution.
U.S. distribution via D2BD and a Northeast retail footprint
A key milestone late in 2025 was Eshbal’s 55 per cent purchase of U.S.-based Dare To Be Different Foods (D2BD), which management described as having an established footprint across parts of the Northeast, including Walmart locations in New York State and additional stores across New York, New Jersey, and Connecticut. Eshbal’s intent is to use D2BD as a commercial platform, expanding distribution while introducing Eshbal brands into existing store relationships and improving operational performance through tighter quality, efficiency, and cost controls.
Canadian manufacturing, DTC rollout, and broker-led retail expansion
On the manufacturing side, Eshbal says it has secured an Ontario-based gluten-free production partner in Toronto-based Queen Street Bakery. The agreement is expected to begin with pita bread production, supported by Eshbal’s specialised equipment and technical know-how, with additional products potentially following. Initial production is planned to support online inventory, buyer sampling for retail and foodservice evaluations, and early customer opportunities.
To convert operational progress into demand, Eshbal plans to launch a Shopify-based online platform in the first quarter of 2026, pairing brand communication with e-commerce and marketplace integration. Wholesale expansion is expected to be broker-led in the U.S. via Active Marketing Group, initially representing Eshbal’s Barili products alongside select D2BD items, while the company explores Canadian broker representation and pursues foodservice relationships.
Looking ahead, Eshbal says its M&A strategy targets at least one accretive acquisition annually, with the possibility of another U.S.-based acquisition in the first half of 2026. The company’s near-term success will hinge on execution: consistent Canadian production, seamless fulfilment, disciplined integration of D2BD, and retail and foodservice wins that build repeat purchase velocity without eroding margins.
