Naleway Foods started out as a small family business in Winnipeg in the 1940’s. The company went through years of growth, and in the 1990s Naleway was consolidated with the business of Winston Ho Fatt, combining the companies’ customers and suppliers, creating the Naleway Foods as it is today. Ho Fatt understood that the business opportunity in the food sector came from automation, and turned Naleway into an efficient mechanized food producer. The company continued to grow its business organically and through acquisitions, and today, Naleway Foods is one of the largest manufacturers of perogies and panzerottis in North America, and the largest private label processor of perogies in Canada.
In the food industry, perogies, panzerottis and all products enrobed in dough fall into a general ‘pasta’ category; and while the sector offers a large number of pasta manufacturers, there are only two large players in the Canadian perogies sphere — one of them being Naleway. If we turned the company’s two year total production of perogies and panzerottis into a single link, it would successfully wrap around the world.
Naleway perogies have a tender but firm and delicious dough, stuffed with tasty fillings made with natural potatoes mixed with cheddar, bacon, onion, cottage cheese and other flavours, providing versatile, affordable, and nutritious feasts that can be prepared in minutes.
The company’s 40,000 square foot facility is CFIA [Canadian Food Inspection Agency] certified, employing 85 people. The plant’s strategic position in central Canada allows for Naleway Foods to effectively supply markets in Western Canada, southwestern Ontario, along with the Midwest and Northeast United States — two large markets for the Naleway Foods products in the United States. While Naleway has its own brands, including Naleway, Maria’s and Helen’s in Canada, and Baker’s Dozen in the U.S., the company largest piece of the production pie comes from producing private label products [products for other brands].
The company has been focusing on automation since its early days, which alone is a serious advantage in the food industry, but according to Peter Farkas, General Manager, it’s also the company’s location that provides an advantage, due to an accessible and stable labour market, and a strategic geographical location in regards to the company markets. Being a wholly owned subsidiary of a larger group [Beaumont Select Corporations Inc., a publicly traded company listed on the TSX Venture exchange under the ticker BMN.A] also has its upside — access to financial support as well as management expertise when required.
“All food manufacturers such as Naleway [a low cost, mass production producer] continuously wrestle with the correct business positioning between two strong economic drivers: the retail organizations – the Loblaws, Sobey’s, Metro and Costcos of the world, who have a substantial bargaining part – and the principal costs of commodities such as flour, potato, cheese, etc. The key to success in this business is to constantly work on striking the balance between the two, best achieved through efficiency — mechanization of processes, automation, and efficient overall production,” Farkas pragmatically summarized the food industry challenges.
According to Farkas, while Naleway always strived for cutting edge mechanization, Ho Fatt effectively increased the output for the company through automation, and mechanization has been Naleway’s main asset in the past years. “Automation is a continuous process, and as a food producer, we at Naleway are never really finished with improving our efficiencies, and we are preparing for more significant reinvestment and capital refurbishment over the next few years,” said Farkas.
The company also plans to improve its marketing effectiveness and address the latest developments in customer behaviours (based on data provided by the company’s key clients). “We are continuously learning about the changes of the market conditions, and how consumers respond to pricing and different products,” said Farkas. In light of the current research, the consumers looked for lower price points during the economic downturn, with brand loyalty decreasing.
Naleway sees a great opportunity in this for its private label clients who can effectively capitalize on this fact, and grow their brands and sales, ultimately benefiting Naleway’s bottom line.
Besides sticking to the food industry fundamentals of automation and constant review of customer behaviour, Naleway strategy also includes introducing new products to the marketplace. “We want to create new products under our own brands in order to increase our price competitiveness. Private label products, compared to Naleway brands products, currently represent a substantial majority of our business, and we believe that new products offered in the Naleway product lineup will help us to shift this balance slightly with a favourable result,” said Farkas, disclosing that some products are already in development stages (such as a complete meal packaged product).
“As a CFIA certified facility, we are able to process meat, which is currently a unique advantage over our main competitor. Therefore, it’s part of our strategy to introduce products that can take advantage of both, our perogies production capacity along with our ability to handle meat products.”
An example of Naleway testing a new meat product in the market was — Hearty Pockets™. Naleway created three delicious options of these miniature meat pies: beef and cheese with vegetables, beef and tTomato oregano parmesan, and spicy beef and cheese with vegetables; and the product aims to compete directly with pizza, hamburger, hotdog and spaghetti meal options.
Spearheading its business growth, the company seeks to expand its presence in the frozen food aisles right across North America. While the company has been reliant on its historical sales in the U.S., Naleway noted recent increased interest in its products on the U.S. side, and the company plans to accommodate and capitalize on this potential over the next few years, creating a thorough marketing plan to further grow the Naleway brands and private label brands in this market.