Premier Foods is to close its own label powdered drinks products factory at Knighton in Adbaston, Staffordshire, with the loss of 300 jobs.
The Ambrosia and Mr Kipling group said shutting the factory would cost £10mln but immediately boost profits and increase the proportion of branded sales.
Knighton is not "aligned to the group's branded growth model strategy and is marginally unprofitable", added the food products group.
Premier announced the closure alongside a statement reporting 'strong' trading for the period over Christmas.
Sales in the thirteen weeks ended 31 December 2022 rose by 12% with branded sales 8,8% higher as Premier pushed through price rises.
Grocery was particularly strong added the statement, with third-quarter sales up 17.4% with international also going well.
Alex Whitehouse, chief executive, noted: “Our major grocery brands produced a particularly good set of results for us, continuing to grow faster than the market, taking 66 basis points of share."
Ambrosia custard sold well, he added, alongside new launches such as Bisto pigs-in-blankets gravy granules while Mr Kipling had another “strong performance” and grew its Mince Pie market share.
Recent acquisition The Spice Tailor also saw double-digit growth.
Higher prices were behind much of the sales rise, Whitehouse said, adding that input cost inflation remains at “elevated levels”.
“With strong trading momentum as we enter our final quarter of the year, and with more brand investment and new product launches to come, we are well on track to deliver on expectations for the full year."