Hostess Brands may file for Chapter 11 -- again

Twinkie maker is in the fight for its life.

By Jonathan Berr Jan 10, 2012 3:50PM
Image: Close up of fresh sliced loaf of bread (© Adam Gault/OJO Images/Getty Images)Hostess Brands, maker of Twinkies, Ho-Hos and Ding Dongs, is on the verge of filing for bankruptcy protection for the second time since 2004 in the face of mounting debt and skyrocketing prices for ingredients, according to the Wall Street Journal.

As the Journal noted, times are tough for the privately held Irving, Tex. baker, which had been held up as a model of corporate restructuring since emerging from its first bankruptcy in 2009. Not only does the maker of Wonder Bread carry $860 million in debt, it owes "more than $50 million to vendors, which have been demanding payments on shortened time frames because of Hostess's financial condition," the paper said.

Above all, Hostess wasn't able to change with the times. Its whole grain bread, "Nature's Pride," was a flop and its other products are being hurt by the growing awareness of the obesity epidemic sweeping the country, especially among children. That trend is particularly evident with respect to its signature product -- Twinkies.

Twinkie inventor James Dewar swore by the cream-filled cake he invented in 1930 and ate at least two packets of them a week, before passing away in 1985 at the age of 88.   "Some people say Twinkies are the quintessential junk food, but I believe in the things," the Los Angeles Times quoted him as saying. These days, many consumers don't share Dewar's heart-felt dedication to what were once dubbed "the cream puff of the proletariat." Twinkies have an "F" grade from the nutrition website Calorie Count because they pack a whopping 150 calories. That means that these snacks have evolved from a daily treat in kids' lunches to an occasional food. Little wonder that Twinkie sales are flat.

The news for Hostess may go from bad to worse. According to the Journal, the company will file a "Chapter 22" bankruptcy, since it already got protection from creditors once before. "One of Hostess's challenges will be to avoid liquidation, the fate of some other companies seeking bankruptcy protection a second time," it says.

Jonathan Berr is trying real hard not to go off his diet after writing this story.
119Comments
Jan 11, 2012 9:23AM
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Funny how when I was growing up in the 70's there were always Twinkies and Ding Dongs etc. in the house, but neither me nor my sister were the slightest bit overweight.  Of course, we actually got our butts off the couch, played outside and rode our bikes every day.  Parents can cut out all the "junk food" from the kids' diets, but until they uproot them from in front of the DVD/XBox/computer, we're going to continue to raise a generation of little piglets.
Jan 10, 2012 10:14PM
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Twinkies receive an "F" in nutitional value ratings.???........Who is the idiot that eats twinkies for the nutritional value????
Jan 10, 2012 7:31PM
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Gee Hostess going broke whats next Sara Lee. Times are hard and peoples salary is not keeping pace with rising prices gas food and other items. Glad I grew up in the fifties when America was America. The local movie house local milk shop everything was local today everything is chain stores and fast food joints and we have lost our way due to corporate greed. The 1 percenters have the money and the rest of us get by and for the most part have to put up with the crap. Twinkies are a great snack ate many of them in my life and still do.
Jan 10, 2012 8:07PM
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Oh, how I love Twinkies.  I agree with another poster who said they aren't as good as they used to be, but I still like one from time to time.  I love that greasy film they leave on the roof of your mouth--kinda like Cap'n Crunch cereal does, as well.  Tongue out  Why is it that we ate stuff like this when we were little, and yet there was usually only one fat kid in school?  Now obesity is rampant among children.  Oh, that's right.  They never leave the house to play.  Their gaming thumbs are in excellent shape.  The rest of them, not so much...
Jan 11, 2012 12:52AM
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My husband has worked for Hostess for 11 years. and it is really a pity that this is happening(again)...The last few years, the employees have taken pay cuts, and benefit cuts just to stay afloat. Now their pensions are on the chopping block. I know that my husband can get another job, but there will be a lot of people who might not be so lucky. And that is sad, whether you eat Twinkies or not.
Jan 10, 2012 7:00PM
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there is nothing like  a hostess  cupcake  (choclate) and  a cup of coffee on the way to work,,  a great convenience store stop !! montanatomkat
Jan 10, 2012 10:32PM
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Hostess' problem is much like every other sugar based product. They use corn syrup instead of sugar and people can tell the difference and it makes you FAT. People weren't fat eating sugar, they got fat when the government allowed Corn By-Products in our foods and drinks.
Jan 10, 2012 10:16PM
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I have read a few comments here that mention Twinkies don't taste the way they used to . . . I agree with that; I also agree that this is one part of the company's many problems (the war on obesity being their biggest), but the ingredients are not the same with so many of the products I grew-up with. The twinkie is the best example. I would cheat on my diet more if Hostess made the same ingredient snacks they did in the sixties, seventies and eighties. You know the Staples, but somewhere in and along the nineties they switched ingredients (high fructose?) for many of their products and they just taste - blah! I don't know if the company can reverse their misfortunes at this point, but when you have a winning formula don't screw with it.

 

Case in Point - Take Kraft's Macaroni & Cheese (Not a Hostess Product, I know). Does this taste the same as it did in the eighties? I don't think so. Kentucky Fried "Original" Recipe Chicken is another offender of recipe meddling. It may not be the cure-all for many food manufacturers in financial turmoil  like Hostess, but it could sure boost some sales figures by providing a comfort food memory that was such a part of so many of our lives.  

Jan 11, 2012 9:14AM
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As a former Bakery manager for many companies, including Hostess, their demise started in the early 90,s when they could not match the pricing in the market by Little Debbie and the Private Label influence perpetuated by Flowers Baking Company, both Southern based bakers.. I spent the last years of my term in Chicago, IL with a privately held company and we competed against Wonder-Hostess. Our pay was commensurate with them as we were in the same union environment

 

. Route sales reps averaged over 50K per year due to a base pay of over 400 weekly and a 7 percent commission on sales. We contributed their health care to the unions who covered them .It was very expensive, like 200 per week per employee. That coupled with the vacation policy of up to 5 weeks brouht our average cost of wages and benefits to nearly 75K per year. That said bakery plant workers wages varied from 15 per hour to 25 per hour plus benefits which pushed our per employee average to over 65K per year. We had 280 route sales reps and nearly 300 inside workers, yet we made profits because our quality was first rate and our service was first rate. Yes, sales reps worked 10 hours per day or more but the harder they worked and sold the more money they made. The killer for Hostess came when they overexpanded, lowered their quality, added preservatives to extend the freshness code to 12 days from 5. Won't work in this world.

Jan 10, 2012 10:45PM
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Wonder Bread, Hostess and Twinkies never used to be made with corn sweetener, now it's in everything... lets think back when did they first start manipulating our food? Can you even say the ingredients anymore? I feel America has been ripped off by crooks at every turn. Why is a good product so hard to find today?
Jan 10, 2012 8:55PM
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Obesity is not an epidemic.  Obesity is the result of poor choices and lack of self control.  The only epidemic in the US is that of laziness and stupidity.  There's also an epidemic of people who make excuses and try to blame everything and everyone except the true person who is to blame - themselves.
Jan 10, 2012 7:11PM
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I used to love to eat Twinkies in college when I got stoned and had the mad dog munchies

 

And the times, they are a changin'

Jan 11, 2012 7:38AM
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I loved Hostess before they started to make crap.  Not real anything in them anymore.  It is a shame that science and stupid people running a company.  Bring back the original recipe and watch your sales grow beyond your expectations.  As for the fat slobs out there well get up off your asses and do something physical.  Get your kids outdoors to ride bikes and run around instead of sitting in front of the tv,computer and wii.  Watch the fat roll away. LMAO! Lazy people, poor quality food = FAT!
Jan 11, 2012 8:28AM
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My husband works for Wonder Bread IBC for the past 20 years.   All the talk about union wages being so high and that is the cause of the problems.  I think reporters need to get some facts straight.  In 2004, they took a $100 a week pay cut to save their jobs. They also had an increase in their insurance contributions.   He is in route sales and works over 10 hr. days.  So if you figure out what he brings home for his wage, he makes around $14.00 an hr.  You think that is a high union wage for a employee that has worked for 20 yrs. at the same job??  We hope they can save the company... 
Jan 11, 2012 12:16AM
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Would love to see Hostess put out a line of "throwback" or "classic" products (like Pepsi did with Pepsi and Mountain Dew), using the original recipes for their snack cakes.  I know they wouldn't be able to include trans-fats (a rant for another time, perhaps), but the snacks had changed significantly for the worse before the trans-fats law.

 

I would pay extra for a real Ding-Dong, Twinkie or (my favorite) Ho-Ho!

 

By the way, I am very healthy "for my age group" (my doctor's caveat) and pay a lot of attention to nutrition.  My healthy diet has room for the occasional non-nutritious treat!

Jan 10, 2012 7:32PM
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I love Twinkies and other hostess cakes. I still do.  I think there are too many other choices of  cakes out there these days, compared to the old days.  Times are changing alright!  What do kids eat these days?  And with diabetes, health issues and weight issues, it is certainly hard to keep up with all those yummy hostess foods and cakes!!!

I truly hope that Twinkies will continue to go on.

Jan 11, 2012 9:03AM
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My husband can not retire as he is not even 50 yrs. old yet in age.  And the comment regarding take home pay, I should have said his gross pay. 

Overinflated,undertalented, underworked unions - someone who has worked for a company for over even 10 years can not be undertalented or they would not be working there anymore - underworked - working over 10-12 hrs. a day for 5 days a week is underworked??  All the talk about who cares if they close as the products are not good for us to eat...  If we closed all the companies that made products that were not good for us, where would the majority of employees in USA be - unemployed?

Jan 10, 2012 7:21PM
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Look for another baking or food company to keep Twinkies and cupcakes on the market.  Even if Hostess dies, the Twinkies will go on. 
Jan 10, 2012 10:56PM
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"Everything tastes different because all the trans-fats were banned. KFC went to a no trans-fat oil. Clinton outlawed hydrogenated oil when he was in there, it ruined margarine, it's mostly water and alginates now."
 
For your information Clinton had nothing to do with the outlaw of trans-fats.  Those were banned under GW's administration.
According to the commercials for corn syrup by corn farmers supposedly, "the body can tell the difference". Hoseshit on that statement, everyone can tell the difference between sugar and corn syrup.  We've had more obesity since manufactures have been allowed to replace sugar with corn syrup.
Jan 11, 2012 3:00AM
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Everything in moderation.  I still like the lemon pies.  I agree with other posters who say the quality has gone down (more crust, less filling).  And I think there is nothing wrong with the argument "Personal responsibility".  It is OUR responsibility to eat wisely, if we so choose to.  Parents need to dole out sweets in moderation, too..  I grew up in the mid70s to 80s.  My mom occasionally put Twinkies in our lunches.....operativ​e word, occasionally.  It was a bigger treat when it was least expected and not a daily occurrence.  AND we weren't 150 pounds in 3rd grade, either.  I will miss Hostess should it go.  Just sad to see the stalwarts go, I suppose.  Also makes me feel OLD.
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