Wal-Mart wants to save the Twinkie

The retailing giant is one of several bidders reportedly interested in purchasing parts of Hostess Brands.

By Jonathan Berr Dec 14, 2012 11:17AM
Wal-Mart store in Secaucus, New Jersey / Jin Lee/Bloomberg via Getty ImagesWould a Twinkie taste just as good if Wal-Mart (WMT) made it?

According to Bloomberg News, the largest retailer is making a run for the assets of Hostess Brands, the bankrupt maker of Twinkies, Sno-Balls and Wonder Bread. Other bidders include grocery chain Kroger Co. (KR) and Grupo Bimbo, the Mexican conglomerate whose brands include Entenmanns's baked goods and Thomas' English muffins. Some of the bids are for all the company's assets and others are for lines of business and individual products, the news service said.

The interest is a sign that Hostess, which has begun to liquidate its assets after unionized workers balked at agreeing to additional concessions, will live to fight another day in some form or another.

The 18,000 Hostess employees who lost their job shouldn't rejoice quite yet. Any new owner of Hostess or its businesses will not be bound by any agreements that prior management made with the unions. A new buyer may demand wage concessions as steep, if not steeper, than the ones demanded by the current owners. Sadly, the $1.8 million that the bankruptcy court approved as retention bonuses for top executives will be paid no matter what.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union say they are not to blame for the company's demise. Its website argues that its members dedicated their working lives to their work and had to "watch helplessly as the company was run into the ground, over and over again." Ironically, I attended a conference on corporate restructuring a few years ago where Hostess was touted as a success story. 

Even if Hostess had the best labor relations in the world, the company would face a tough road ahead. For one thing, the costs for ingredients have skyrocketed  this year as U.S. crops withered following the worst drought in more than five decades. America's dietary habits have also changed in the wake of soaring rates of obesity.

Take Twinkies. When I grew up in the 1970s and 80s, parents would think nothing of putting the creme-filled spongecake in a kid's school lunch. Today's parents would think twice before letting their children eat something so unhealthy.

Hostess products such as Twinkies are like newspapers. People like them in theory, but can't remember the last time they bought one. That needs to change if Hostess hopes to survive.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr

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414Comments
Dec 14, 2012 3:35PM
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Vulture Capital...(Venture Capitalist) took the Hostess Company down....

 

Read the whole saga, from 1930 until 2-3 weeks ago....

You really need to quit harping on Unions....It not only shows, but proves your ignorance.

Dec 14, 2012 3:34PM
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Walmart and Twinkies.  You know that is a match from the very mention of the concept, they definitely fit together!
Dec 14, 2012 3:33PM
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Our parents put a Twinkie in our lunch without a thought when we were in school, because we had recess and played outside for hours to burn off that kind of thing, without knowing that was happenning, nowadays, kids sit behind video games and computers without ever playing outside. No wonder the obesesproblem is more than it should be....quit blaming the foods and realize it is our lazziness and failure to make children exercise 
Dec 14, 2012 3:32PM
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I like to share something funny aside from union and labor disputes, I work for a used car dealership and a few weeks ago I got a "customer" that made my day, he came asking for the price of the nicest and more expensive vehicle on the lot and told me he had an offer that I needed to be foolish to refuse, and starting to educate me about the possible closing of Hostess bakeries and how the price of the TWINKIES will skyrocket up, and that someone already made $200,000 for a box of twinkies on E-Bay, so here comes his AWESOME offer, he was willing to give me not ONE but FOUR, yes FOUR boxes of TWINKIES for my $27, 000 vehicle, straight up,well needless to say I was overwhelmed by his generosity, I couldn't believe there was people this stupid and sent him to see the next dealership and share that awesome  offer of his with my friends.

Dec 14, 2012 3:30PM
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I Will tell you that it was the union that killed hostess.  Every time they went on strike all of their costumers grocery stores, schools. hospitals, restaurants and so on had to call other bakeries to get what they needed, Well not all but a lot of them said yes we will supply you but you have to sign a contract to buy just from us for a year then when hostess went back to work they lost a lot of their customers. But I Guess the Union Feels like they don't have to tell you that!!!!!!   Its like every other business  NO CUSTOMERS = NO JOBS
Dec 14, 2012 3:30PM
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Our hearts go out to The Families,Children and Teachers at the school back East, in Conn.

About 18 children,8 adults...Maybe the shooter a 24 year old male is also dead.

Dec 14, 2012 3:29PM
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so is this just for twinkies or would it be the whole line of there snack stuff along with wonderbread? Id rather have the bread then a twinkie not a fan but the coffee cakes are awesome
Dec 14, 2012 3:29PM
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I can count on the thumbs of one foot how many Twinkies I've eaten in the last 20 years or so.
Dec 14, 2012 3:29PM
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These bonuses went to execs to keep things going until the end instead of jumping ship.  They were paid this for a job they had to do, which was to manage the end of the company, due to the union people not being willing to do what it took to keep the company open.

 

Dec 14, 2012 3:26PM
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Any parent that won't allow their kid to eat a Twinkie....IS A BAD PARENT....
Dec 14, 2012 3:26PM
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Unless you had a Hostess outlet store near you, how could you afford to buy them? That's why Hostess went down the tubes, their prices. Love the product, couldn't afford the price.

 

I grew up in the 60's-70's and if you wanted to go somewhere, you walked. In this day and age you can't just let your children run free on the streets. There are just too many screwed up people out there, so you can't just tell your kids to be home when the streetlights come on, like we were able to do.

 

Not even safe to allow them to go to school.................What do you do? Buy them games.............

Dec 14, 2012 3:26PM
Dec 14, 2012 3:22PM
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My son was in regional distribution for Hostess.  He acknowledged the mistakes made by management but his job was not made miserable by the decisions of the people upstairs.  When he could not get his union people to do their jobs and not be able to do anything about it, his service to his customers suffered and he began losing outlets for Hostess products.  This affected sales and the profitability of the company.

When did it become a crime in this country to get educated, trained and succeed as management, climb the ladder due to your abilities get paid for these abilities?  All you hear about are the union workers that lost their jobs but there are many management people that lost their jobs, also.  Unions did their memebership well when they viewed the members working with management creating success for all.  When they lost sight of the synergy necessary between workers and management working together for success and created an "us against them" mentality, everyone loses.

Dec 14, 2012 3:22PM
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I was never a real Twinkie fan. I was a SuzyQ freak tho.   Until they raised the price to 37¢.

Then I switched to Little Debbie brand cakes. Eventually they raised prices but also increased size a little.

File for bankruptcy and triple bonuses for ceo'S does not seem logical.

Maybe workers would be happier if ceo bonuses were done away with and replaced with profit sharing for every employee. After all, ceo'S already get best salaries in plants.

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food stamps are the leading cause in obesity
Dec 14, 2012 3:22PM
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From my cold, dead, sponge cake filled, hands...Twinkies Forever.
Dec 14, 2012 3:15PM
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Unions killed this country one job at a time. What is the difference between Hostess and a car company???   The size of the union. Where was the bama-o-rama bailout. bama-o-rama is killing this country and with his union pals doing a great job.   "Jeb is 2016"
Dec 14, 2012 3:14PM
Dec 14, 2012 3:12PM
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Twinkies can only be saved if they are "Made in the USA"...
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