Farewell Hostess, long live Twinkies
As Hostess Brands moves to close down, it seeks to sell its iconic brands like Twinkies to the highest bidder.
There were fears today that "life's little Twinkie gauge is going to go empty," to borrow a phrase from Woody Harrelson's sponge-cake loving character in "Zombieland." Hostess Brands announced it's shutting down for good, and there were reports from across the country that fans of the iconic snack were emptying store shelves in their quest for one last Twinkie fix.
Hostess had filed for bankruptcy protection in January, but kept on making Twinkies, Dolly Madison cakes, Wonder Bread and a host of other baked goods that have long been household names. In recent weeks, the bakers' union rejected a new contract and went on a crippling strike. Today, Hostess followed through on its warnings that the company would be liquidated, and said it hopes to sell off at least some of its 30 brands.
Richard Chesley, a bankruptcy expert at the law firm DLA Piper, predicts Hostess could command a "substantial" sum for its best-known names, although he adds that the brands have "been under duress for such a long period of time, it's going to take work" to revive them.
Chesley, who has been involved in a number of big-name corporate liquidations, notes that the company's products still command a respectable share of shelf space. Beyond that, he says, an enterprising investor could turn those names into merchandising gold.
"You could license the Wonder Bread name and logo for any number of uses or products throughout the world," Chesley says, especially in Asia where demand has been growing for products with American brands.
NPD Group food industry analyst Harry Balzer says iconic brands get passed along all the time. "It's very difficult to have them leave the scene completely," Balzer says. Borden no longer makes Cracker Jack and Ralston Purina no longer makes Chex cereals, for example, but they live on.
Joshua Sosland, editor of the trade publication Milling and Baking News, says he'll be surprised if the company's popular brands don't survive. "Some way or another, there will be bakers baking Wonder Bread in the next year, baking Twinkies and Ding Dongs and everything else that this company makes, using the company's formulations."