March 20 (Reuters) - Kraft Heinz Canada KHC.O said on Friday it will invest C$250 million ($182.22 million) to modernize its Montreal-based manufacturing plant, as the company looks to ramp up production of its staple food products in the region.

The move comes as the packaged food maker attempts to revive demand under new top boss Steve Cahillane, after pausing its plans to split, while budget-conscious shoppers are snacking less and opting to spend on cheaper private-label brands.

• The investment will be used to upgrade key plant systems at the Mount Royal factory, which employs more than 1,000 workers, to improve sustainability, automation and overall output, the company said.

• Kraft Heinz also plans to introduce new production volume as part of a broader push to strengthen domestic food manufacturing.

• Canadians are contending with strained household budgets hurt by sticky inflation, rising fuel costs and a soft labor market while trade-related uncertainties weigh on consumer sentiment.

• The company in its latest quarterly results in February fell short of estimates and its 2026 earnings outlook was below expectations.

• The Montreal facility is a key manufacturer in producing brands such as Kraft Dinner, Philadelphia cream cheese and Kraft peanut butter, according to Simon Laroche, president of Kraft Heinz Canada.

($1 = 1.3720 Canadian dollars)

(Reporting by Sanskriti Shekhar in Bengaluru. Editing by Alan Barona)

((Sanskriti.Shekhar@thomsonreuters.com))