It was becoming obvious to Peter Neal that something had to be done about his tortilla chips. They were the top seller for his snack brand, Neal Brothers, stocked in stores all across Canada. But they were made in the United States, and that was quickly becoming a problem.
So he set out to find a factory in Canada. In ordinary times, this sort of thing would be a dangerous adventure. In the world of industrial-scale snack production, any little change to production can drastically alter the taste, look and texture of your product. Even something minor, like switching suppliers for a single ingredient, requires a battery of sensory tests.
But Neal didn’t feel he had much of a choice. U.S. President Donald Trump was constantly threatening new ways to set off a full-blown trade war with Canada. Neal’s brand, which he started with his brother in their mom’s kitchen north of Toronto, now found itself on the wrong side of a fervent “Buy Canadian” movement. And the weakened loonie was already squeezing his margins.
“If you can’t adapt, and you can’t make change, you’re dead,” he said. “This is big. It’s scaring our team.”
In the food business, some brands make their own products while others depend on third-party factories. Though he’d wanted his own factory for years, Neal was still in the latter camp. He was already working with some of those third-party factories in Canada to make products like salsa. But as he looked around this winter, he couldn’t find a factory that could pull off his particular chip-making procedure.
He needed big tanks to soak and boil corn kernels, and lava rocks to grind them into a paste before frying. Nobody had that, which was a pity, because, according to Neal, the method makes for a crispier crunch.
Then, last week, he made a breakthrough.
He flew to Kamloops, B.C., to meet Colin McGaffin, a chipmaker who had built a steady following behind his Fresh is Best Salsa & Co. brand in Western Canada.
Walking through the Fresh is Best factory, which makes chips and fresh salsas, Neal was getting frantic emails about how potential tariffs and counter-tariffs were going to impact some corner of the business or another. His quest for a Canadian factory started feeling more important, and the more he walked through the factory, the more it felt right.
The floors were clean and the windows gave good light and everything smelled like onion and cilantro, which was somewhat bizarre even for a salsa plant. One of the workers said it takes two or three batches before your eyes stop watering from the cut onions.
Some salsa plants have turned to flash-frozen vegetables and herbs, to save themselves the trouble of washing, trimming and chopping. So the smells can be muted. But McGaffin preferred to have it all done by hand, with each batch of salsa requiring 20 pounds of cilantro and 10 pounds of parsley.
“That’s just not normal,” Neal said, walking through the plant in a red hair net. “They’re not all like this.”
But on the chipmaking side of the factory, Neal ran into the same problem he’d had with the others. McGaffin makes what’s known as restaurant-style chips, or cantina chips. They start with a dough from corn flour and water, which is rolled out into round tortillas, baked, cooled, then cut into triangles and fried. There were no tanks for cooking corn. No lava rocks.
On paper, it wasn’t a fit. But the next morning, Neal called his team and told them he was going to do something in Kamloops anyway. He thought maybe they could launch an entirely new Neal Brothers cantina-style chip, and a line of fresh salsas. He already had ideas for flavourings. It wouldn’t solve his “Product of USA” problem with the regular tortilla chips, but he just wanted to work with McGaffin.
“This is a passion play,” Neal remembered saying on the call.
McGaffin started his company with his wife, Lisa Graham, in the late 1990s, after their upholstery shop didn’t work out. He rented space in a restaurant kitchen and worked there overnight, after the restaurant closed, frying chips. He and Lisa started by selling at farmers’ markets and over more than two decades, the pair broke into supermarket chains and rented a sprawling factory that overlooks Kamloops and the mountains.
Their next big dream was to expand into eastern Canada. But Lisa died suddenly in 2021 due to complications from surgery. After that, McGaffin didn’t know what to do. She had a talent for design and her touch was everywhere in the factory and the offices, on signage and packaging and a red couch from their days at the upholstery shop.
“I couldn’t even walk in here for a year,” he said.
Last year, McGaffin warned his landlord that he might not be able to make rent at the factory.
“We were just, I don’t know, floundering a little bit for the last couple years,” he said.
But the landlord had an idea. He introduced McGaffin to his two childhood friends in Vancouver, who worked in the food industry, with an import and retail business that focused on olive oil and other products from Greece. When McGaffin was in Vancouver for the Grey Cup last fall, he went out to dinner with them and decided to bring them in as partners.
“We just jumped in,” said George Morfidis, one of the new partners.
Together, they started looking for a distributor to help McGaffin get into markets in Eastern Canada. That’s how they met Neal in the first place.
Neal Brothers is part of a national distribution company, called Jonluca Neal, which started working with Fresh is Best late last year to expand the brand. When the tariff threats ramped up a few weeks later, Neal already knew Fresh is Best had extra space on its production lines, so they might be able to help with his chip problem.
After a factory tour last week, McGaffin, the partners and Neal were in the middle of a meeting in the boardroom. Neal’s phone buzzed, and a photo from a grocery store in Ontario popped up. The store was running a special on his chips but in the weekly flyer, it had erroneously advertised them as Canadian-made. So the store printed up a clarification notice, and slapped it on the Neal Brothers display.
“We regret any inconvenience caused,” the note said.
Neal showed the photo around the table. He was exasperated, but he couldn’t be angry with the store. He got it. He felt as betrayed as everyone else, and was doing everything he could to pull at least some production out of the U.S.
He left the factory and headed home. He still didn’t have a solution. Over the next week, however, he kept talking about Kamloops with his brother, Chris, and their team. They decided they wanted to go all in with the factory — and make more than cantina chips.
The way they saw it, McGaffin ran a good shop, he just didn’t have the right equipment and setup. For years, Neal and his brother wanted a piece of a factory in Canada, so they could make chips their way. So why not offer to invest in new equipment for McGaffin’s plant, as a partner?
“It’s time to think fast and make some changes,” Neal said. “I get so excited when I think about this stuff.”
This week, Neal made the pitch to the Kamloops team.
“They just immediately said, ‘OK, let’s look at it,’ ” he said.
It’s not a done deal. If everything works out, it could take months, even a year, to get the new venture off the ground. But for Neal it felt good. With the threat of Trump’s tariffs hanging over them, nothing was for certain, except this: He and his brother were inching closer to home.
