Long Live the Twinkie!

Following a union strike, Irving-based Hostess Brands announced on Friday that it would liquidate its factories.
Sat November 17, 2012 4:36 am
AP

The time has come to fill your underground bunker with Twinkies. After months of financial difficulties, Hostess Brands is shuttering its 33 factories and selling off the right to produce its yellow snack cakes. But, while supplies will dwindle in the coming weeks (the last batches rolled off the production line early Friday morning, a Hostess spokesperson said), the Twinkie is unlikely to go extinct anytime soon. Instead, many anticipate a spongcake phoenix rising from the ashes of Hostess, as other companies snap up the rights to produce the brand. 

"The company, which has been in bankruptcy court since January, said delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products," Karen Robinson-Jacobs reported at the Dallas Morning News . None of the Irving-based company's factories are located in Texas, but 18,500 jobs will be lost in other states. 

Hostess has declared bankruptcy twice in recent years, in 2004 and in January. The company blamed a union strike for their ultimate decision to liquidate. Thousands of workers had been striking since last Friday after members of the company's second largest union--the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union--declined to approve a deal that would have led to an eight percent wage cut. The company had been "operating on thin margins and stalling production meant the loss of critical sales," the AP reported Friday.

“The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the company’s largest unions…, initiated a nationwide strike that crippled the company’s ability to produce and deliver products at multiple facilities,” the company said in a statement. 

So what will become of the 82-year-old yellow spongecake , a favorite of school lunches for generations? Well, don't panic yet: someone will probably buy the rights to produce them, as they still have "decades of brand equity" and "pretty significant demand," the Wall Street Journal reported. However, "a competitor would have to ramp up production if it took on the Twinkies or Ding Dong brands and give up valuable shelf space already devoted to its own goods, [Hostess Chief Executive Gregory Rayburn] noted," according to the WSJ.  

At Forbes, Dan Primack tried to reassure worried consumers that the " foodstuff of choice for the zombie apocalypse" would continue to be produced:

The truth is that the Twinkies brand still has value, and will be acquired. Same for Ding Dongs. And (probably) Wonder Bread. America may be undergoing major demographic shifts, but empty calories cut across age, gender and ethnicity. 

Another bakery, or even a private equity firm, will likely jump at the right to make them. So, in short, "don't worry about Twinkies. After all, there was enough demand last year to make 500 million of them. Someone will buy it, and they'll look exactly the same. Even if someone besides Hostess is making them," he concluded. 

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