Hostess Brands may file for Chapter 11 -- again
Twinkie maker is in the fight for its life.
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.
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.
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.
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'
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!
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.
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?
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