The sweetest comeback – Twinkies to reappear in July

Junk food aficionados and loyal Twinkie fans can breathe a sigh of relief – Twinkies are set for an official and sweet American comeback. [Click pic to enlarge]

Metropoulos & Co and Apollo Global Management, the firms that purchased Twinkies and other Hostess products when Hostess Brands shut down in 2012 after bankruptcy and an acrimonious fight with its unionised workers, is bringing the original Twinkie back.

Says the LA Times: “Looks like the prayers of every golden-sponge-cake-creamy-filling lover have been answered. And Hostess knows it. The words ‘The Sweetest Comeback in History Ever’ will be written, right on the new Twinkie boxes.”

A slew of imposters tried to take the Twinkie’s place during its six-month absence from stores shelves. Those included a Twinkie look-a-like product from Flowers Foods, a company that purchased some of Hostess’ assets; a similar snack cake called “Bingles” from the Blue Bird brand; the Mrs Freshley “Dreamies” cream-filled snacks; and the Little Debbie “Cloud Cakes”.

But the real fans weren’t fooled and were quick to purchase every last remaining Twinkie on store shelves. The news of the Hostess shutdown spurred an outcry from loyal fans on social media outlets including Facebook, demanding the real thing.

Twinkies – looking back, looking ahead

Hostess Brands struggled for years before it filed for Chapter 11 bankruptcy reorganisation 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 unionised.

To steer it through its bankruptcy reorganisation, 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 unionised 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 has a far less costly operating structure than the predecessor company. Some of the previous workers were hired back, but they’re no longer unionised.

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 has 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.

Looking ahead, Seban sees Hostess improving and expanding its product lineup. He noted that Hostess cakes are known for three basic textures: the spongy cake, the creamy filling and the thicker icing. But he said different textures — such as crunchy — could be introduced, as well as different flavours.

“We can have some fun with that mixture,” he said.

He also said there are many trendy health attributes the company could tap into, such as gluten-free, added fibre, low sugar and low sodium.

During bankruptcy proceedings, Hostess had said that its overall sales had been declining, although the company didn’t give a breakout on the performance of individual brands. But Seban is confident Twinkies will have staying power beyond its re-launch.

As for the literal shelf-life, Seban is quick to refute the snack cake’s fabled indestructibility.

“Forty-five days — that’s it,” he said. “They don’t last forever.”

Twinkies will remain the same price at $3.99 for a box of 10.

Sources: LA Times, Associated Press