Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Twinkies Make Their Way Back to the Shelves as the Brand Seeks to Reinvent Itself
Author: Joel R. Glucksman
Date: July 15, 2013
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If you’re a regular reader, you know I always post on Tuesday. However, I wanted to post this article today because Hostess Twinkies made their way back on the shelves this morning. Everyone at the office is excited about this; perhaps it calls for an office-wide get together featuring a few boxes of our old friends.
The announcement that America’s beloved Twinkies brand would make its way back to the shelves this summer after its previous owners filed for bankruptcy law protection has been met with jubilation from Twinkie lovers across the country. Now, as Twinkies return to retailers, the new owners of the popular brand seeks to reinvent itself with more efficiency and strategy to avoid falling into financial disarray.
The iconic Hostess brand was purchased by Apollo Global Management and Metropoulos & Co. for $410 million after its former owners filed for bankruptcy in January 2012. Company owner C. Dean Metropoulos said in his first interview that the new Hostess brand – which is now free of union contracts and $1.3 billion in liabilities that led to the previous company’s demise – will take on an aggressive growth plan to lower the risk of future bankruptcy filings.
He explained that the union rules and complicated policies of the previous Hostess organization limited distribution of Twinkies to only 50,000 of the 150,000 convenience stores in the U.S., according to the Wall Street Journal. In addition, certain regulations – such as a requirement that breads and cakes be delivered in separate trucks – also tacked on more costs and led to unsustainable business operations.
The new Hostess will rely on third-party drivers, rather than unionized workers, to conduct operations and product distribution, a move that will allow the company to deliver Twinkies to up to 110,000 convenience stores by the end of 2013.
“Wherever you find a Snickers bar or M&Ms, you should be able to find a Twinkie,” Metropoulos told the Journal.
The snacks, which officially returned to shelves today, July 15, will also have a longer shelf life this time around, as the previous owner introduced new Twinkies that last 45 days, rather than 26 days, prior to its bankruptcy liquidation and asset sales.
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