Hagersville institution Hewitt's Dairy has reached a deal to be purchased by Gay Lea Foods.

The 127-year-old dairy operation will be under new ownership effective Nov. 1.

"Hewitt's Dairy and Gay Lea Foods have two strong and rich histories in the province of Ontario," Hewitt's owner and president Marie Hewitt said in a release.

"I know Gay Lea Foods is committed to the dream our family created; to our loyal employees; to our valued customers; to our quality dairy goat producers; and to the community in which we live."

Hewitt's makes a range of milk, cream, sour cream, yogurt, ice cream and goat milk products. It's widely known for its ice cream and for its milk packaged in glass bottles.

Michael Barrett, president and CEO of Gay Lea, said the dairy co-operative believes there is a growing market for goat products and saw Hewitt's as one of the leaders in the segment. The acquisition will also mark Gay Lea's foray into ice cream production.

Barrett was on hand with Marie Hewitt to announce the move to the company's 65 employees Wednesday morning.

"We are certainly committed to Hagersville," he said. "We told the employees that we will invest in the plant. As a co-operative, we recognize the importance of family business and community connections. We are of farmers, by farmers and for farmers. Our profits go right back into rural communities."

Christine Rohrbach, Hewitt's general manager and controller, said she is "very excited" by the deal. She said Hewitt's and Gay Lea have similar business philosophies.

"It's a very natural fit for our two companies to work together."

Employees received the news well, she said, and were reassured that nothing about their employment conditions will change.

"It's not without sadness, though. It will be sad not to work with Mrs. Hewitt on a daily basis."

The family opened a roadside dairy bar on Highway 6 south of Hamilton in 1962 that has become a landmark attraction. It will remain, said Rohrbach.

A purchase price was not disclosed.

Hewitt's began in 1887 when James Hewitt began to deliver milk from his farm in a horse-drawn wagon. The plant in Hagersville was built in 1950 and rebuilt in 1980. It's been expanded several times since.

It has always remained in the family's hands. Marie Hewitt's late husband Howard was James Hewitt's great-nephew.

Hewitt's produces under its own brand but also co-packs for others.

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Early this year Mississauga-based Gay Lea, Ontario's largest dairy co-op, bought Hamilton cheesemaker Salerno Dairy in a bid to make inroads into cheese sales.

The 56-year-old co-operative has 1,200 members, 835 employees and annual sales of some $560 million under several brands including Gay Lea, Nordica and Ivanhoe. The company will operate at eight facilities with the Hewitt's acquisition.