Massive sugar rush: Hostess Twinkies hit comeback trail

Drakes Cakes also to return. Mayor Bloomberg likely not amused. Photo: AP/Hostess, Inc.

WASHINGTON, June 24, 2013 — Sugar rush addicts of the world unite! A time of great rejoicing is at hand. Hostess Twinkies, the ultimate anti-health food snack, is slated to reappear on store shelves starting this coming July 15. Under new ownership and management, the company formerly known as Hostess Brands, Inc.

Equally exciting: once popular but currently defunct Drake Cakes are also on the comeback trail, with product availability rumored to be scheduled for late summer or early autumn. 

As most Twinkies fans and business news fanatics are likely well aware, the company formerly known as Hostess Brands, Inc. finally succumbed last year to a one-two punch from intransigent unions and their legacy health care and pension overhang as well as the company’s own cost-inefficient management and distribution methods. Hostess filed for and never emerged from Chapter 11 bankruptcy and was forced to sell off its brands and many of its baking facilities to satisfy creditors as it dissolved. 

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.

A nearly-new box for Hostess Twinkies. (AP/Hostess, Inc.)

Ultimately, Hostess’ bread brands, including its ubiquitous, balloon-festooned Wonder Bread label, were acquired by Georgia-based baking giant Flowers, Inc., the maker of Tastykakes, Nature’s Own breads and numerous additional nationally distributed products. Flowers reportedly intends to re-introduce Wonder Bread to stores later this year, although its plans are currently on hold pending approval of this acquisition by the Department of Justice. 


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Hostess’ snack products were also a little tricky to sell, attracting numerous bidders and deals for the company’s iconic snack cake brands, which also include Hostess Cupcakes and Donettes. The ultimate winning bid was submitted by an investing team consisting of giant Apollo Global Management and investment firm Metropoulos & Co., which already controls numerous nationally known brands including Pabst. 

Now under the management of these two venture capitalist-investment company firms, the new management of the Hostess snack food brands is getting excited about the return of these products to store shelves next month. The brands’ familiar packaging will reportedly carry a new banner, bragging that the return of Hostess snacks will be nothing less than “The Sweetest Comeback in the History of Ever.” 

New management promises that the recipes and content of the Hostess products will remain largely the same. However, the popular Hostess Cupcakes will reportedly get an upgrade without a price boost. Formerly, the recipe had used milk chocolate. But now, perhaps upgrading to more demanding consumer tastes, the recipe will use dark cocoa instead which should provide the product with a more robust taste and appearance. Product pricing will remain the same. 

Once the system is back up and running, the company will also consider adding a few new products and product textures to its traditional lines. 


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Freed from the money-losing constraints of its old contract, the new Hostess will bake snacks with a smaller, non-union labor force and fewer standalone bakeries. 

Hostess products will now be delivered to giant, independent warehouses, which supply an array of customers as opposed to the company’s previous delivery methods, which, under Teamsters contracts, required the use of costly company drivers and trucks to deliver products to each individual store. 

Drake’s Cakes also set to return. Packaging for some of its brands pictured here. (Drake’s)

An additional benefit to the company’s new, modern delivery method: general warehouse distribution will bring the Hostess brand to stores that never carried its products before, particularly currently popular and prospering “dollar stores” and a wide array of convenience stores. 

Meanwhile, Drakes Cake, which suffered a near-death experience similar to that of Hostess and was acquired by McKee Foods—the maker of Little Debbie snack cakes—is also readying for a re-emergence of its own popular brands, including Devil Dogs, Funny Bones, YankeeDoodles and Yodels. 

McKee has been tight-lipped about precisely which Drakes products it plans to re-introduce to the marketplace, saying only that those products chosen for the initial rollout will be baked in its own facilities.

Whatever the case, whether Hostess, Tastykake, Little Debbies or Drake’s, consumers will likely enjoy the return of their favorite sugary snack foods, the increased variety of choice on the shelves, and, perhaps, even the benefit of a little cost competition. 

Little Debbie was apparently not amused by the recent upsurge in competition. She was unavailable for comment, but the paparazzi caught this one candid photo. (Original image, McKee/mod. Ponick)

The only people likely to be chagrined by these latest developments are New York’s Mayor Michael “Nanny” Bloomberg whose anti-sugary food crusading is as well known as it is nationally despised; and Little Debbie herself who is reportedly chagrined, as she’s being forced once again to compete against her old rivals. Neither the Mayor nor Debbie was made available for comment. 

    —AP contributed to this report.

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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