Canadian dairy co-op Gay Lea Foods has snapped up local processor Hewitt's Dairy.

Gay Lea, Ontario's largest dairy co-op, has bought a family-owned operator based in the same province to broaden its portfolio.

"This acquisition will expand Gay Lea's presence in the Ontario dairy marketplace and increase the diversity of our basket of goods," Michael Barrett, president and CEO of Gay Lea, said.

The co-op, which generated sales of C$560m in 2013, sells butter, cheese and cream. Its brands include Gay Lea, Nordica, Ivanhoe and Salerno. The company sells into Canadian retail stores, operates in the foodservice channel and sells industrial ingredients.

Hewitt, a small business employing 65 staff, sells milk, cream, cultured beverages, yoghurt, ice cream and goat milk products, including organic goat milk and fresh organic chèvre.