Canadian snack maker Neal Brothers sees sales surge amid Loblaws fight with Frito-Lay
CBC
Canadian snack company Neal Brothers says orders have gone through the roof as a result of a fight over potato chip prices between Loblaws and Frito-Lay.
Frito-Lay, the maker of snack brands such as Cheetos, Doritos, Lays, Ruffles and Sunchips, set off an unexpected food fight last month when it abruptly cut off one of Canada's biggest grocery chains because of their refusal to raise prices.
Frito-Lay, which is owned by PepsiCo., said it took the extraordinary step because it is facing "unprecedented pressures from rising costs of items, including ingredients, packaging and transportation." It was pushing Loblaws to charge customers more for their products in order to recoup those higher costs, the company said.
But Loblaws refused to pass on those costs, with the grocery chain saying it is "laser focused" on keeping prices as low as possible.
The result has been some empty shelves for snackers but also an opportunity for alternatives such as Richmond Hill, Ont.- based Neal Brothers, which makes premium, natural and organic snacks.
"Two weeks ago today, I got an urgent call from a great partner of ours at Fortinos," company founder Peter Neal told CBC News in an interview.
Fortinos is a chain of 23 grocery stores in Ontario, owned by Loblaws, and the company was in desperate need of chips to replace the inventory lost to Frito-Lay's sudden decision.
WATCH |The food fight between Frito-Lay and Loblaws, explained:
Shortly after that call, Neal got a similar one from parent company Loblaws, asking for what he describes as a "huge" request compared to their normal order.
"We were able to fulfil part of it, and the rest of it we'll hopefully be able to fulfil early next week," Neal said.
"We just had another order come in yesterday, and that will put us up to, by the end of next week, a good 100 per cent or more."
While Neal is enjoying the new business, he doubts the company can sustain at this level of production and hopes that once the current surge calms down, sales might level off at a plateau that's maybe 20 per cent higher than the previous baseline.
"We're hoping consumers will see our product for the first time, and once this is all over, and we're not in those main aisles, they will seek us out in the natural food section."
WATCH | Follow your food from farm to fork to see why prices are going up: