Jokes about Twinkies, Ho-Hos and Ding Dongs may never end. And it's possible that those names and even products, possibly even their parent brand, could live on.
But now, rather suddenly, Hostess Brands, the company that has made them all possible through the decades, has met its apparent end, with the CEO filing for bankruptcy Friday morning, a move he's been threatening while playing hardball with striking workers. The move means the end for the company that brought the world not only Twinkies, but also Wonder Bread, Dolly Madison, and a host(ess) of other branded baked goods.
After a troubled few years dealing with its union-represented employees, Hostess Brands has finally decided to go out of business and liquidate its assets after failing to win back striking workers. Changing American tastes to "better-for-you" snacks, and higher commodity costs, also conspired to sink Hostess.
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Gregory F. Rayburn, Hostess CEO, said in a statement. "Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."
An #RIPtwinkies hashtag quickly rose on Twitter, while eBay has been flooded with memorabilia (and actual Twinkies and other products). One wag is even asking $10,000 for a box of 10 Twinkies.
About one-third of the company's workers were union members who bucked Hostess's cutbacks during a bankruptcy reorganization. But Rayburn insisted on The Today Show on Friday that his decision wasn't simply a tactic to bring striking unions crawling back to the negotiating table.
"It's over," said Rayburn, who joined Hostesss earlier this year as a restructuring expert. "The problem is we don't have enough [workers crossing picket] lines to maintain normal production." Output at about a dozen of the company's 33 plants had been seriously affected by the strike.
Hostess Brands owns not only the bakeries but also 565 distribution centers, about 5,500 delivery routes and 570 bakery outlet stores around the country. Delivery will continue for a while, the company said, and the retail stores will remain open for "several days."
The move sounds a death knell for about 30 brands unless they're acquired, as the bankruptcy statement notes:
In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes®. Bread brands to be sold include Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, and Beefsteak®, among others.
As for the brands, their fate remains uncertain, set to be decided by a bankruptcy-court auction run by Hostess's investment bankers, according to the Wall Street Journal, or maybe determined by a group of liquidators. Rayburn told the newspaper he is unsure which brands might sell or how much they might garner in purchases.
Rayburn told the Journal that the names have decades of brand equity and demand for Hostess products and brands remain "pretty significant" — the company has had revenues of $2 billion a year. But a competitor would have to ramp up its own output of the newly acquired brands and figure out how they jibe with their own existing shelf space.
But it's always hard to keep a good brand down forever. That's why we may not have eaten our last Twinkie just yet, even as it's ScaryCakes time for its employees, distributors, backers and fans of its brands. (Update: Mexico's Grupo Bimbo, which owns Sara Lee and its Entemann's and Thomas' English Muffins brands, is reportedly a contender to salvage at least some Hostess Brands.)
Below, WSJ.com's tribute to Hostess Brands: