VANCOUVER, BC. — In support of its North American expansion, Eshbal Functional Food Inc., a maker of gluten-free and better-for-you baked foods and baking products, has acquired Swonder Bread, an Israel-based bakery specializing in sprouted sourdough and vegan bread.

Eshbal said the addition of Swonder marks its entry into the sprouted sourdough bread segment. Swonder’s products — all gluten-free, plant-based and free from artificial additives — are made using a natural fermentation process combined with sprouted grains, a method known to enhance digestibility and nutritional value, according to Eshbal. The Israel-based company, whose North American office is in Vancouver, noted these capabilities will boost its position in the clean label and gut-health product space.

The acquisition includes all of Swonder’s operations and core assets, namely proprietary recipes, trademarks, customer base, production equipment and inventory. Eshbal said it expects to quickly scale up Swonder’s product line in the Israeli market and leverage the acquired intellectual property and formulations for potential new offerings in North America.

Eshbal didn’t disclose the purchase price of the acquisition, which closed June 15, but said it agreed to pay Swonder C$150,000 over three years based on a revenue performance formula. Swonder’s founder also agreed to a 36-month consulting pact for Eshbal to provide expert guidance on sourdough production, process integration, client onboarding and marketing.

“From day one, M&A has been a key part of our strategy, and this transaction represents one of the many steps we intend to take,” said Tomer Bar Meir, chief executive officer of Eshbal. “Swonder Bread brings unique and hard-to-develop know-how that fits perfectly with our long-term goals. We see immediate opportunities to grow this business in Israel, and we believe the underlying technology offers exciting potential for future product development in North America as well.”

Meanwhile, Eshbal said it is planning to locally manufacture its gluten-free, plant-based pita bread in North America, and the upcoming launch will be the first time the bread will be made and distributed locally in the United States. For over a decade, Eshbal’s pita bread has been produced in Israel and exported to a California-based restaurant group, which Eshbal said has provided positive feedback indicating the product’s US market potential. 

In the United States, plans call for the pita bread to be rolled out initially in frozen form to meet distributor requirements and ensure product integrity, Eshbal said. The company added that it also is advancing development of an ambient, shelf-stable version that could enhance accessibility for retailers by reducing reliance on freezer space and simplifying logistics.

Eshbal said increased consumer awareness of celiac disease, gluten sensitivity and broader lifestyle preferences are fueling an expanding market for gluten-free products in North America, with bakery as the largest and fastest-growing category. According to the company, a rising number of shoppers are seeking baked foods that align with their plant-based, clean label or reduced-carb dietary goals while providing the taste and texture of traditional options.

An Israeli food tech company, Eshbal operates from a 60,000-square-foot facility and produces over 300 SKUs, including more than 80 proprietary gluten-free items. Made with natural ingredients such as teff and chia, its products include packaged pita and other bread, cookies, hot dog buns, bread crumbs, flour, baking mixes, powdered sugar, protein snacks, dietary supplements and superfoods under the brands Barili, Caragil, Confectioner, Komida and Zen.