Twinkies and other snack cakes from the bankrupt Hostess Brands will coming back to store shelves on July 15, according to a report from the Associated Press based on the announcement of Daren Metropoulos, one of the principal owners of private equity firm C. Dean Metropolous & Co.
In May, Apollo Global Management LLC (NYSE:APO) and C. Dean Metropolous & Co. jointly acquired Twinkies and other snack brands for $410 million. Hostess Brands filed for Chapter 11 bankruptcy after a workers’ strike led to the shutdown of its business operations. The company will restart its business operations with a smaller structure under its new owners.
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America Wants ‘Real’ Twinkies
According to Mr. Metropolous, Twinkies will taste the same, and the packaging have a similar look to its old box, but it has a new tagline: “The Sweetest Comeback in the History of Ever.” The comeback price of Twinkies for a box of 10 is $3.99, the same price as when Hostess Brands shut down in November last year.
“A lot of impostor products have come to the market while Hostess has been off the shelves. America wanted Hostess back, they wanted the original,” said Mr. Metropolous.
Ho Ho’s Are Back!
Aside from Twinkies, the restructured company will also start selling all of itasnack products under the Hostess and Dolly Madison brands including CupCakes, Donettes, Zingers, Ho Hos, Ding Dongs, fruit pies and mini muffins. According to the company, some of the products such as Sno-Balls will return to store shelves at a later date (in the next few months).
Flowers Foods, Inc. (NYSE:FLO), the second largest bakery by sales in the United States, acquired the other assets and five Hostess brands including Wonder, Butternut, Home Pride, Merita and Nature’s Pride. McKee Foods bought Drake’s Cakes, which includes the Devil Dogs and Yodels brands.
The operating cost of the reorganized Hostess Brands is substantially lesser than its old structure. The new owners rehired previous employees of the old company, but they are no longer unionized. When Hostess Brands ceased its operations last year, 15,000 employees lost their jobs.
Hostess Distribution Model Will Be More Efficient
Rich Seban, president of Hostess Brands said the company will now deliver to warehouses that supply products to retailers, instead of directly delivering to stores. The strategy will help expand its distribution to dollar stores and to a majority of convenience stores in the United States.
Seban noted that Hostess previously delivered its products to approximately one third of the 150,000 convenience stores in the country. The company’s production has been trimmed down from 11 bakery plants to four plants (Georgia, Kansas, Illinois, & Indiana), and its headquarters was moved to Kansas City.
Dark Chocolate To Replace Milk Chocolate in CupCakes
According to Seban, the company is now using dark cocoa for its CupCakes to offer a richer taste and darker appearance instead of using milk chocolate. He emphasized that the change aims to improve the quality of the product, and not to cut costs. Seban also stated that Hostess plans to expand its products offerings.