Twinkies' Comeback Could Mean Expanded Lineup

July 15 return bringing changes to production, delivery, marketing, products themselves

Published in CSP Daily News

KANSAS CITY, Mo. -- With the imminent return of Hostess Twinkies and its other snack cakes to convenience stores and other retailers on July 15 under new ownership, will consumers want to wash down their snack cakes with an ice-cold Pabst?

Apollo Global Management LLC and C. Dean Metropoulos & Co. bought Hostess Brands earlier this year for $410 million. Apollo, 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 consumers will see cross-promotional marketing, according to a report by the Associated Press.

"There is certainly a natural association with the two," Daren Metropoulos told the news agency. "There could be some opportunities for them to [be] seen together."

The acquisition has brought immediate changes to the company, the report detailed. 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, Rich Seban, the president of Hostess who previously served as chief operating officer, told AP. 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.

The company has also consolidated production 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.

In the months since they vanished from shelves, the cakes have been getting a few touchups as well, the report said. For the CupCakes, the company is now using dark cocoa instead of milk chocolate to give them a richer, darker appearance.

Seban stressed that the changes were to improve the cakes, not to cut costs. Prices for the cakes will remain the same; a box of 10 Twinkies will cost $3.99.

Looking ahead, Seban said he sees Hostess 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 flavors.

"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 fiber, 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.