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 15, 2012 12:18PM
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It was Walmart who contributed to the failure of Hostess with their complete ripoff cakes at one-third the price.  I know, I used to buy them.
Dec 15, 2012 12:17PM
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Oh boy, there gonna be making twinkies in china now.
Dec 15, 2012 12:04PM
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DON'T SELL TO WALMART!  Out of all the potential buyers this company would be the worse.  They will only allow to be sold in their stores.  No more gas stations, mom-and-pop stores will ever see them again.  Think of American Interstate brands, don't totally screw over the customers that were always so loyal to the brand.  Sell to a company who will distribute them to ALL stores.  Not the crappy Walmart monopoly.  That would be even a sadder day in America!

 

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Eating ten Twinkies a day, and shopping at Walmart.  Yeah, I can see how those go together.
Dec 15, 2012 11:49AM
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Putting aside the arguments of unhealthy products and union issues, I would propose that Hostess failed at some point to be cost effective and affordable to the consumer. I grew up with Hostess products and don't recall any real competition other than Dolly Madison. At some point, Little Debbie came into the marketplace with .25 cent twin cake packages and boxes of 6 or 8 for .99 cents (they have since gone up, I know). Consumers were able to buy the same type of junk food for way cheaper and pick from a broader variety of items. Hostess continued along, charging $4.00+ dollars a box and thinking customer loyalty would never falter. Not so. I think they completely out-priced themselves from the market-place. Wal-Mart, with it's global purchasing power and business structure, could start selling Hostess items at more competitive prices. In fact, I think they are probably the only ones who could do so and still turn a profit. Wal-mart has been fighting unionization successfully for years and that doesn't appear likely to change in the near future.
Dec 15, 2012 11:48AM
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Well, I never liked Twinkies or even the other Hostess cupcakes.  Back in the '40's or so they only had the cupcakes with no filling inside for a nickel.  Then came the "decorated" filled ones for a dime.  To me they were too dry and Twinkies too sweet.  But let WalMart get them, they'll go to China, and be filled with who knows what just to keep the price down even lower than now.  And I never shop WalMart.
Dec 15, 2012 11:47AM
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More fuel for the WalMachine.  Twinkies and WalMart customers- an ideal, perfect match.

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Oh! hell no, I may tolerate wally world, but I don't want them owning the world.
Dec 15, 2012 11:01AM
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twinkies will have zero employees after walmart buys them and tells them they have to work for 10 dollars a hour and no benefits, walmart better start looking for illegals. 
Dec 15, 2012 10:49AM
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another bull crap story from the unions that there not at fault for hostess going under when in fact the unions are are the very reason why hostess failed. and wal mart you better stay way from this cause your letting your self open for the unions to get in your door
Dec 15, 2012 10:47AM
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What people forget that it is a private company. Workers don't invest their money into it. Hostess management tried to make the company work but labor in Blue states is to much. You seen it coming. Hostess won't die they will just open up in a right to work state and be able to make a profit. If the current hostess employee didn't like the pay he could of went somewhere else to work. That would either make the company fold of increase wages. It's called supply and demand. I know it's something union and Obama supporters no nothing about and they all think they are so smart. Give me a break 
Dec 15, 2012 8:58AM
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Wal-Mart is a monopoly!!!!! people just can't see that,....everybody should watch the video WAL-MART THE HIGH COST OF LOW PRICES!!!! every time you shop at WALLYWORLD! you promote welfare , foodstamps, fuel assistance, gov. paid health care for there employees,.etc, most of there employees are on some kind of GOV. assistance.. 28 HOURS IS A FULL TIME JOB FOR THERE EMPLOYEES but not enough hours for any benefits, WALMART'S BENEFITS ARE GOV. ASSISTANCE!!!  Wal-Mart is what is wrong with this country,  Wal-Mart now has 15 full time lobbyist in dc lobbying for sales tax on the internet!!! NOW THEY WANT TWINKIES!!!  ( sounds right more scap to sell in there crap store )

>>>>>>>>>>WAL_MART AND QUALITY.............OXYMORON<<<<<<<<<<<

they have killed all the little towns and mom and pop stores all over this country , 

WAKE UP PEOPLE SHOP LOCAL AND STOP WAL-MART!!!!!!!!!!!!!!!!! 

Dec 15, 2012 8:44AM
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I laugh every time i read the comments about walmart.  Correct me if I am wrong but this article is not about 18000 jobs lost at walmart now is it.
Dec 15, 2012 8:44AM
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it is > obamas fault<<this country will go to hell because of him
Dec 14, 2012 8:19PM
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I thought Ho-Hos..=..Chinkies was damn funny.

 

BTW....You can eat them cupcakes from the bottom, not as messy as trying to peel the top off...

All you have to do.....Is turn them upside down....But they don't come with instructions.

Sorry just couldn't help myself...Ho,ho, ho,ho...

Dec 14, 2012 7:32PM
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I do have to agree with Michael Desentis??(something)...Sorry Mike.

 

I'm always amazed about the people that RAG on UNIONS...Probably really know the least.

I'm not going to get into their Accomplishments, Someone listed them well...

 

When all the Unions are gone...And every State is a Right to Work State, then you will be living the dream....And all will be fools and owe the Company Store....Mark it now.!!!

I am just assuming you all embrace wanton Capitalism....And Dictatorships too.

Dec 14, 2012 7:16PM
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The Article is about Twinkies and WalMart....Did I see/miss something about Obama...

 

Or do only Morons read someting into The Twinkie deal......? 

Dec 14, 2012 6:23PM
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Liberal writing...probably by an Obama supporter.   "Sadly, the $1.8 million that the bankruptcy court approved as retention bonuses for top executives will be paid no matter what"  

Why is it sad? Have to have executives to liquate the company the unions destroyed. Just because men/women in running the company went to college, did well and rose up the ranks, should get what they earn.   Those that don't try and rely on union bosses to tell them what they will get have to reap what they sow.

 

Michigan got it right and they are on the path to being a right to work state.  Union bloodsuckers do not have much life left.

 


 

Dec 14, 2012 6:22PM
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This is why we need stronger unions and more government, but not conservative, regulation of businesses.  Reports have shown that it was the management's poor decisions and their greed that caused this company to fail.  Until we strenghten our unions and strictly regulate businesses, nothing will get better.
Dec 14, 2012 6:08PM
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Speak for yourself their reporter, I just finish my last box of Ding Dongs last week and a month ago we had a box of twinkies to snack on while watching TV programs...so....and if give in rations appropriately they are not a bad snack issue. Besides, the parents are giving their children something to make them fat..so what is it? What?
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