A major packaged food company is exiting an entire market after years of weak performance, saying the business had become a “drag” on overall results. It joins a growing number of food manufacturers shedding underperforming operations to focus on higher-growth opportunities.
The move reflects a broader trend across the food industry, where companies are streamlining global operations amid persistent inflation, shifting consumer demand, and increasing pressure to improve profitability.
Founded in 1891 in Austin, Minnesota, Hormel Foods Corporation is a global branded food company with a portfolio of over 40 brands, including Skippy, Spam, and Applegate, with products sold in more than 80 countries.
Hormel Foods sells Brazil business
Hormel Foods Corporation (HRL) has agreed to sell its Brazilian operations, which operate under the Ceratti brand, to Brazilian food company Zanchetta Alimentos LTDA. Financial terms of the transaction were not disclosed.
“The divestiture reflects Hormel Foods ongoing efforts to simplify and streamline its portfolio and focus its international strategy on markets with the strongest long-term growth opportunities,” the company said in a statement.
The sale is expected to close in the coming weeks, subject to customary closing conditions and regulatory approval. Until then, Ceratti’s operations will continue as normal.
Hormel Foods said the transaction is expected to have only a minimal impact on its adjusted fiscal 2026 financial results.
Why Hormel Foods is exiting Brazil
Hormel Foods entered Brazil in 2017 when it acquired Cidade do Sol, the owner of the Ceratti brand, for $104 million. At the time, the acquisition was intended to establish a foothold in South America and serve as a platform for future regional growth.
Instead, the business struggled to meet expectations.
During the fourth-quarter 2025 earnings call, Hormel Foods CEO Jeffrey Ettinger described Brazil as a “challenged” market that weighed on the performance of the company’s international segment.
Executives said they were reviewing the broader business portfolio as part of Hormel Foods’ Transform and Modernize Initiative, which focuses on optimizing manufacturing, expanding distribution, improving operational efficiency, and reallocating products across facilities.
“Brazil for sure has been a drag in terms of our overall performance,” said Hormel Foods President and Director John Ghingo during the earnings call. “Everything is under review. We do continue to look at our portfolio in total for what makes sense, what doesn’t.”
The comments came after Hormel Foods reported mixed fourth-quarter earnings results. Overall net sales increased 1.5% during the quarter, while international net sales declined 5.6%, reflecting continued weakness in Brazil.
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Food companies continue reshaping global operations
Hormel Foods is not the only food manufacturer to exit Brazil in 2026.
In March, General Mills agreed to sell its Brazil business to local beverage and food company Grupo 3corações. Three months later, Leprino Foods sold its operations in the country to Brazilian dairy brand Catupiry.
Here’s some of my previous coverage of closures and market exits:
- Dunkin’ could exit an entire market in 2026 after 14 years
- Iconic seafood chain files lawsuit after bankruptcy
- Popular frozen yogurt chain closes most locations
The sale underscores a broader trend of global food manufacturers reevaluating their international portfolios as higher operating costs, inflation, and shifting consumer spending continue to pressure earnings.
Rather than maintaining operations in slower-growing or underperforming markets, many companies are redirecting investments toward businesses and regions with stronger growth potential.
According to the U.S. Bureau of Labor Statistics, prices for food away from home increased 3.5% over the 12 months ending in May 2026. During the same period, three of the six major grocery store food group indexes also posted price rises, highlighting the ongoing cost pressures facing both consumers and food manufacturers.
As food manufacturers navigate higher costs, uneven international demand, and evolving consumer behavior, portfolio optimization has become an increasingly common strategy for improving efficiency and supporting long-term profitability.
Related: 79-year-old fast-fashion retailer closes 128 stores