USA – Nestlé is set to exit the dairy sector in Ecuador through an agreement with Latin American food company Grupo Gloria.

The deal involves the sale of a factory and distribution centre in Cayambe, north of Quito, along with local brands La Vaquita, Yogu Yogu, Natura, Cereavena, and Huesitos.

Grupo Gloria will also obtain licensing rights for international brands La Lechera and Svelty with the transaction subject to approval from Ecuador’s competition watchdog.

Nestlé’s exit from the dairy sector in Ecuador and Nicaragua aligns with its broader business strategy and regional considerations.

The company remains active in various sectors, including culinary products, confectionery, coffee, and infant formula.

In 2018, Nestlé acquired Ecuadorian company Terrafertil, strengthening its plant-based product offering in Latin America.

Peru-based Grupo Gloria, the acquiring party in the Ecuador deal, operates in multiple countries, producing dairy items, plant-based milk, jam, cake, canned fish, and soft drinks.

The acquisition according to the company, reflects Grupo Gloria’s commitment to the Ecuadorian market and its aim to strengthen its portfolio in Latin America.

Claudio Rodríguez, President of Gloria Foods, expressed confidence that the transaction would enhance the company’s presence in Latin America and continue delivering quality and experience to the countries it serves.

“With this purchase, we renew our commitment to the Ecuadorian market as a relevant player in the food sector and we enthusiastically welcome the excellent workforce and the important brands that the acquisition of the operation brings with it,” he said.

“We are sure that this transaction will strengthen our portfolio in Latin America and will allow us to continue bringing our quality and experience to the countries where we are present.”

This move follows Nestlé’s recent decision in February, to close a dairy plant in Nicaragua, citing “current global dynamics for efficient and productive operations.”

The Matagalpa-based plant produces dairy products for Prolacsa, a Nestlé-owned local business.

In a statement, Nestlé revealed plans to gradually shift Prolacsa’s manufacturing to other Latin American factories while maintaining commercial management and sales in Nicaragua.

Juan Gabriel Reyes, CEO of Nestlé Central America, emphasized that the closure in Nicaragua is a strategic decision at the regional level, allowing Nestlé to continue offering affordable, high-quality products to consumers.

He added that Nestlé will continue to purchase 13% of Nicaragua’s coffee, contributing to the company’s global operations.

Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE