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 5:11PM
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Sadly?  Are you a socialist?  That is the law, approved by a Judge for reasons you probably don't understand.  I walked out of a gifted/talented school presentation because they were so proud of how they wouldn't even allow twinkies and other such garbage at their school.  Cheeseburgers were even suspect.  Wow.  I guess the government will tell us all what to do, and we will all like it.  Not me though.  I prefer freedom to promises (i mean illusions) of equality.
Dec 14, 2012 5:07PM
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I agree with many posters - when I think of the cookies, candy and ice cream and chips and sugared drinks we had as kids...... Yet no one in my family was fat, except for  third grade. All three of us  kids went through a "stocky" stage at that age before a seemingly overnight growth spurt and back to being scrawny again. But besides the exercise, these snacks were a treat. We didn't have them every day. In fact. my mom bought one bag of cookies for the family - five people - and they had to last the week. Once we ate them all, there was no going back to the store for more junkfood. A bag of Hershey's miniatures lasted the entire holiday season. I'm not sure when the occasional treat became a major food group in this society.

Dec 14, 2012 5:02PM
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I ate my share of Twinkies Ho Hos' Ding Dongs and Hostess cupcakes. I also was not fat i played hard until the Street lights came on.kids today are sissies they stay inside and play video gamsn and get no excersise so they become fat
Dec 14, 2012 5:02PM
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What is the insane obsession w/ Twinkies? I'm a junk food junkie and consider salsa a vegetable but can't understand this silly phenomenon.

Dec 14, 2012 4:56PM
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Twinkies should be gone now, save our future youth
Dec 14, 2012 4:55PM
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“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”

 

The new owner of the brands will likely produce the products elsewhere and will not have to deal with the people in that area. Even if the new owner buys the facilities they can still hire, or bring in a whole new workforce, they are not obligated to hire any of the fired Hostess employees.

 

Wal-Mart already has a distribution system in place and they can easily contract out the production elsewhere. They do not have to buy the facilities or use them, they can produce the snacks any place they want.

Dec 14, 2012 4:53PM
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Am I the only one that has been watching this, Hostess wanted their Employees to take an 8% PAYCUT while they gave the upper crust a big fat bonus. All this at a time when things were going up.I don't believe that the Union had a thing to do with the downfall. I believe that Hostess itself planned on closing the company down. It doesn't take a Rocket Scientist to see this. Yep they don't have to pay employees and managment gets a big fat going away present. I got to say one thing Companies are learning from Investment Compaanies like "Bain" really good. They figured out how to cut out the middle man "Bain".
Dec 14, 2012 4:46PM
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Little Debbie is now making a twinkie called clouds. I bought them expecting to be didappointed but they look and taste exactly like twinkies--so goodbye hostess. Union should be banned period. 18,000 people could not sqeeze another dime out of hostess and I am proud that they went under instead of giving into these demands. let it be a lesson to the rest of the unions.
Dec 14, 2012 4:46PM
Dec 14, 2012 4:43PM
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If Walmart sells twinkies they for sure will be made in Mexico or China with non union labor of probably about 25 cents and hour. Its only for the money and not the nostalgia.
Dec 14, 2012 4:41PM
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Unions, and I mean all Unions, suck. I do not mean the majority of the hard working union members but the parasitical union bosses and the minority lazy parasites that ride on the back of the hard working union members. Why does a union need to spend hundreds of millions of dollars a year on political campaigns? Why don’t they give that money back to its members in the form of better pay, better benefits, better healthcare? All unions require their members to buy health insurance from the union. My nephew would be alive today if the union bosses would have paid his medical bills instead of denying his medical claims. They are all malignant parasites!!!

Dec 14, 2012 4:40PM
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Back in the early 70's I worked at Continental Baking and made Twinkies and Snowballs and you couldn't pay me to eat one! I had an old Chevy Vega that had rust holes on it and bondo never held up. I used the marshmallow from the snowballs from the bottom of the tubs and it worked like a charm and lasted until the car finally gave out! And people want to put that junk in their stomachs. YUCK!
Dec 14, 2012 4:39PM
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I hope not.. Because after they get done "tweaking" the recipe to save on costs, they won't taste the same....
Dec 14, 2012 4:37PM
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Twinkies Forever!! They have nothing to do with obesity or anything like that. It's not the food that hurts you, it's your LIFESTYLE. And the lifestyle of most people is just sitting around their home. No more walks in the park, no more jogging, running, playing basketball or street hockey. Nope. Just sitting down watching TV-- if anything is "unhealthy" it has to be TELEVISION. Why don't they go bankrupt instead? C'mon peple-- what will the world be like without Twinkies?!
Dec 14, 2012 4:34PM
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If  WALMART owned TWINKIES they would probably be MADE IN CHINA.
Dec 14, 2012 4:34PM
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The union thinks it's not there fault? Okay who refused to take the concessions and save the jobs. Teamsters took the deal, the Bakery, Confectionery, Tobacco Workers and Grain Millers Union refused they are totally at fault for this. I think every member of the union who lost there job should sue the Union for gross negligence of there duty to represent them in there best interest.. Leaving your people without a job even it pays a little less versus unemployment looks like a total lack of credible representation to me.
Dec 14, 2012 4:33PM
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Here is my Twinkie story. I used to work at Hostess when I was in high school (40 years ago). I used to go in, in the morning before school. I would punch in, then get a cup of coffee and a Twinkie, or some other cake, and I would have that for breakfast. Well after I quit, I didn't eat a Hostess cake for close to 30 years. One night, about 10 or so years ago, coming home from the bar my wife and I hung out at, I had a few too many, we stop at the grocery store for something. I seen a box of Twinkies and they looked great. I bought them, then ate 5 of them on the drive home. I ended up puking them up, threw the rest out, and haven't touched one since.
Dec 14, 2012 4:32PM
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1st of all get rid of Walmart totally, let another US Baker or Hotess to continue making quality baked products, BUT keep it in the US and away from WALMART!!!!!!!!!!!        I grew up in the 50s and60s and we played outside till dark WITHOUT all the electronics of today and we weren't fat.........
Dec 14, 2012 4:29PM
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Why bother?  Little Debbie makes the same thing called Cloud Cakes and they are cheaper too.
Dec 14, 2012 4:27PM
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Now all the bakeries that currently supply Walmart need to be worried.   What am I saying?, everybody that supplies Walmart is always worried!
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