The Snack Is Back

Published in CSP Daily News

Twinkies return to retail shelves (early in some cases); former union critical of re-launch

SCHILLER PARK, Ill. -- As Hostess Brands LLC executives, family members of Twinkie founder James Dewar and others gathered to celebrate the historic comeback at the Hostess bakery in Schiller Park, Ill., where Twinkies were born in 1930, Twinkies and other Hostess snack cakes returned officially to store shelves on Monday, July 15, after an eight-month absence.

Wal-Mart announced that it would began selling Twinkies on July 12 at some U.S. stores and July 14 at all U.S. stores, although according to a Bloomberg report, Hostess said it had not given any retailers permission to sell its products before July 15.

And a Corner Store in San Antonio treated customers to an early free sampling of Twinkies on July 13, reported KENS-TV.

Approximately 100 million snack cakes, including Twinkies, CupCakes and bags of Donettes, will hit store shelves over the first two weeks of the comeback, as will Zingers, HoHos, DingDongs, fruit pies and mini muffins. SnoBalls and SuzyQs will return in the next few months. Because of the overwhelming demand, Hostess will have five times more Twinkies on the market during the first two weeks of the comeback than during the same two-week period last year, the company said.

Meanwhile, the new boxes hitting shelves list the snack cakes as having 135 calories and 38.5 grams per cake, reported the Associated Press. Right before it went out of business, the predecessor company told the news agency that Twinkies were 150 calories per cake. Photos of past boxes online also indicate the weight to have been 42.5 grams per cake.

A spokesperson for the new Hostess, Hannah Arnold, told AP that the size change was made in "mid-2012″ by the predecessor company. Arnold also said that the longer shelf life of Twinkies reported by AP earlier this month was made by the predecessor company right before it went bankrupt. The 45-day shelf life, up from 26 days, was a separate change and hit shelves Nov. 1, she said. For retailers who request it, the company also said it is freezing Twinkies so stores can stamp their own expiration dates on them.

The company has said that Twinkies will remain at the same suggested retail price, $3.99 for a box of 10.

The "historic milestone" comes four months after investment firms Metropoulos & Co. and Apollo Global Management LLC rescued the brand, buying select assets out of bankruptcy and setting in place plans to bring back iconic Hostess snack cakes.

"We are committed to investing in this company, reinvigorating these beloved brands, innovating to meet evolving consumer preferences with new products and continuing to bake the high-quality, fresh and delicious snack cakes that have given Hostess its enduring appeal," said Dean Metropoulos, CEO of Hostess, Kansas City, Mo.

Retail customers representing more than 100,000 stores placed significant orders in advance of the comeback, said the company. Bakeries have been running at capacity, but because of the number of orders, it is possible that not all stores will have all products on shelves immediately.

Hostess products are currently being produced in four bakeries: Schiller Park, Ill.; Emporia, Kansas; Columbus, Ga.; and Indianapolis. Under the company's new distribution model, Hostess products are delivered to retailers' warehouses, rather than individual stores. This will enable the company to reach about 160,000 stores by the end of the year, including tens of thousands of dollar stores, club stores, drug stores and vending machines that were previously inaccessible.

"Our goal is as simple as it is ambitious: wherever consumers can buy a candy bar, they should be able to purchase a Twinkie," said Dean Metropoulos.

The company's new owners, which emerged as winning bidders for the majority of Hostess' snack cake business on March 12, 2013, plan to invest approximately $100 million this year making upgrades to bakeries and facilities. In addition, it has plans to open a fifth bakery next year, at a cost of up to $80 million, in a yet-to-be-determined location.

Working with the new owners in connection with this historic comeback have been Acosta Sales & Marketing, which has been instrumental in merchandising activities and helping to facilitate Hostess' expanded reach; Lean Logistics, which has facilitated logistics and distribution; and Accenture, which has played a key role in the implementation of new IT systems.

Hostess, then based in Irving, Texas, last November announced it was shutting down and selling off its approximately 30 brands and 36 plants, a move expected to result in the loss of more than 18,000 jobs. Hostess moved to liquidate after it failed to reach a deal on cost cuts with its second-largest union, representing thousands of bakers.

On Monday, Bakery, Confectionery, Tobacco Workers & Grain Millers International Union (BCTGM) president David B. Durkee issued the following statement:

"This coming week, Hostess Brands, LLC is expected to re-enter the wholesale snack cake market. Despite the fanfare, the long-term viability of this effort is highly uncertain. Rather than hire professional, experienced bakers who have produced quality snack cakes in the company's bakeries for decades, Hostess management has chosen instead to hire primarily workers with little or no experience in the demanding wholesale snack cake baking industry.

"The BCTGM has consistently stated our interest in working cooperatively and productively with the new owners of this company. We have always maintained that the experience, skill and professionalism of our members offer the new owners, who have no experience in the wholesale snack cake business, the best chance for long-term success in consistently putting out a quality product" ( click here to view the full BCTGM statement).