Hostess eyes 'sweetest' comeback next month
NEW YORK — Hostess is betting on a sweet comeback for Twinkies when they return to shelves next month.
The company that went bankrupt after an acrimonious fight with its unionized workers last year is back up and running under new owners and a leaner structure. It says it plans to have Twinkies and other snack cakes back on shelves starting July 15.
Based on the outpouring of nostalgia sparked by its demise, Hostess is expecting a blockbuster return next month for Twinkies and other sugary treats, such as CupCakes and Donettes. The company says the cakes will taste the same but that the boxes will now bear the tag line “The Sweetest Comeback In The History Of Ever.”
“A lot of impostor products have come to the market while Hostess has been off the shelves,” said Daren Metropoulos, a principal of the investment firm Metropoulos & Co., which teamed up with Apollo Global Management to buy a variety of Hostess snacks.
Hostess Brands Inc. was struggling for years before it filed for Chapter 11 bankruptcy reorganization in early 2012. Workers blamed the troubles on years of mismanagement, as well as a failure of executives to invest in brands to keep up with changing tastes. The company said it was weighed down by higher pension and medical costs than its competitors, whose employees weren't unionized.
To steer it through its bankruptcy reorganization, Hostess hired restructuring expert Greg Rayburn as its CEO. But Rayburn ultimately failed to reach a contract agreement with its second largest union. In November, he blamed striking workers for crippling the company's ability to maintain normal production and announced that Hostess would liquidate.
The shuttering triggered a rush on Hostess snack cakes, with stores selling out of the most popular brands within hours.
About 15,000 unionized workers lost their jobs in the aftermath.
In unwinding its business, Hostess sold off its brands in chunks to different buyers. Its major bread brands including Wonder were sold to Flowers Foods, which makes Tastykakes. McKee Foods, which makes Little Debbie snack cakes, snapped up Drake's Cake, which includes Devil Dogs and Yodels.
Metropoulos & Co. and Apollo bought Twinkies and other Hostess cakes for $410 million.
Apollo Global Management, founded by Leon Black, is known for buying troubled brands then selling them for a profit; its investments include fast-food chains Carl's Jr. and Hardee's. Metropoulos & Co., which has revamped then sold off brands including Chef Boyardee and Bumble Bee, also owns Pabst Brewing Co.
That could mean some cross-promotional marketing is in store.
“There is certainly a natural association with the two,” Metropoulos said. “There could be some opportunities for them to seen together.”
The trimmed-down Hostess Brands LLC has a far less costly operating structure than the predecessor company. Some of the previous workers were hired back, but they're no longer unionized.
Hostess will also now deliver to warehouses that supply retailers, rather than delivering directly to stores, said Rich Seban, the president of Hostess who previously served as chief operating officer. That will greatly expand its reach, letting it deliver to dollar stores and nearly all convenience stores in the U.S.
Previously, he said Hostess was only able to reach about a third of the country's 150,000 convenience stores.
Production was also consolidated, from 11 bakery plants to four — one each in Georgia, Kansas, Illinois and Indiana. The headquarters were moved from Texas to Kansas City, Mo., where Hostess was previously based and still had some accounting offices.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- 7 shot at Florida spring-break house party
- A bipartisan push on toxic chemicals makes some Democrats fume
- Run from Cuba, Americans cling to claims for seized property
- Attorneys: Sterilizations were part of plea deal talks
- Mysteries of dark matter come to light in Science study
- Republican presidential hopefuls near-unanimity on the issue of their own guns
- Global warming is slowing down the circulation of the oceans — with potentially dire consequences
- Christie rails against high N.J. estate tax
- American crash victims: U.S. government contractor, daughter
- Pentagon shielded Chilean torture, slaying suspect
- Bergdahl, speaking for 1st time, claims 12 attempts to flee Taliban