Last call for Twinkie? Hostess fails to reach agreement with union

Trucks sit idle at the Hostess baking facility on November 16, 2012 in Oakland, Calif.

Hostess, maker of Twinkies, heads towards Chapter 11 for the second time in eight years.

Last-ditch talks to save the Hostess company from liquidation have failed. So today, the Twinkie and Wonder Bread maker will likely begin the legal winding down process, to shut everything down and sell off remaining brands and assets.

Already, corporate vultures are waiting to snatch pieces of the carcass. Private equity firm Sun Capital is rumored to be interested in the whole company. That comes as a surprise to many, because Hostess is saddled with old trucks, inefficient plants, high labor costs, and loads of debt.

“Hostess may be more attractive to strategic buyers that are just looking to buy the individual brands, rather than acquiring the entire company,” says Morningstar packaged foods analyst Erin Lash.

Of course, the iconic brand that is perhaps most recognizable? Hint: It starts with "T," and rhymes with "Slinkies."

It’s hard to know how much the company -- as a whole, or in parts -- might fetch at auction. But despite all the healthy food talk in today’s America, there still seems a viable market for empty calories.

“There still is a place for less nutritious snacks and food items,” Lash adds.

Hostess says the auction and entire liquidation process could take a year.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.

Hostess, maker of Twinkies, heads towards Chapter 11 for the second time in eight years.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...