January 24, 2013

The Associated Press

Hostess Brands' announcement that it would wind down its operations set off a wave of nostalgia for Twinkies, with sellers seeking hundreds of dollars for them on eBay.

Somebody's going to make Twinkies, but who?

The Washington Post

The last Twinkies rolled out of Hostess factories in November. But the iconic brand appears to be making a comeback.

Eleven companies have submitted bids to acquire the Hostess cake brands, which include Twinkies, out of the bankruptcy process, according to court documents filed this month. The number of bidders indicates a robust interest in reviving the snacks.

"Somebody's going to make Twinkies -- that's not a concern," according to a source close to the negotiations. "The question is who and how."

A winner could be announced as early as next week, although the process could drag on in bankruptcy court in New York much longer.

Hostess Brands announced Nov. 16 that it would wind down its operations, closing 33 bakeries, 565 distribution centers, about 5,500 delivery routes and 570 bakery outlet stores throughout the United States. More than 18,000 people lost their jobs.

The announcement set off a wave of nostalgia for Twinkies, with consumers emptying shelves and scavengers seeking to sell them for hundreds of dollars on eBay.

Reportedly among the leading bidders is C. Dean Metropoulos and Co., a private equity firm that also owns Pabst Blue Ribbon.

Separately, Hostess is also selling off its bread business, including Nature's Pride and Wonder, which attracted 13 bidders.

The Hostess cake business -- also including Donettes, Ding Dongs and Ho Hos -- had nearly $1 billion in sales last year, according to figures from SymphonyIRI Infoscan, which does not include sales at Walmarts.

And though Twinkies have dominated coverage of the company's demise, Hostess actually sold many more doughnuts and cupcakes. Twinkies sales amounted to $73.7 million, according to the figures.

The bakeries where the cakes are made are likely to be acquired by the bidders, a source said, because there is a shortage of such facilities. Twinkies were baked at Hostess plants in Columbus, Ga.; Emporia, Kan.; Ogden, Utah; Schiller Park, Ill.; Seattle; and Wayne, N.J.

Hostess also had a bakery in Biddeford, which could be part of a package deal proposed by Georgia-based Flowers Foods. Flowers Foods has expressed an interest in picking up some of Hostess' bread brands.

But the return of Twinkies and other brands does not mean the company's former employees will regain their jobs.

Hostess's bankruptcy was precipitated, according to the company, by the union refusing wage and benefit concessions that management had demanded. However, a union representative said this week that for any of the bidders, the former workers offer the best chance of restarting operations swiftly.

"The Bakers look forward to the next phase for these iconic brands that past generations have grown up with -- as a fourth generation baker, believe me I know," David Durkee, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement. "While we don't know what the outcome will be of either the auction process or who will be hired to work in the plants, what we do know is that our members provide new owners the best chance of success in a seamless revival of operations."

2012 Press Herald file/Gregory Rec

A truck enters the Hostess plant in Biddeford on Nov. 16, 2012, the day the company announced it would wind down its operations.

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