Who will take over Wonder Bread, Twinkies?
Junk food rummage sale: Will Bimbo, J&J Snack, Tastkake's Flowers bid for brands?
Who will take over Wonder Bread, Twinkies?
Joseph N. DiStefano
After a decade of bankruptcies and fights with its Teamster drivers and Bakery, Tobacco and Confectionery plant workers, the current bosses at Hostess Brands say they are shutting down their bakery in Northeast Philadelphia, laying off 300 workers; closing distribution centers in King of Prussia, Wilmington, and South Jersey; laying off 18,500 in closing all bakeries and warehouses nationwide; and seeking a bankruptcy liquidation sale.
Who are the likely buyers of Twinkies, Hostess cupcakes, Drake's Cakes, Wonder Bread, Ring Dings, and dozens more iconic fatty snack brands?
Sales of many of these products have been slipping for years; in their efforts to shore up profits, Hostess and predecessor Interstate Bakeries have been unable to convince union workers to give up pensions and other pay and benefits.
So the creditors want someone else to try. "They'll sell to the highest bidder," suggests Robert Costello, boss of $55 million asset Costello Asset Management in Huntingdon Valley, and a former stock analyst who covered Tastykake and other foodmakers.
The many possible buyers of one or more Hostess brands include three big Philadelphia-area employers: - Horsham-based, Mexican-owned Bimbo Bakeries USA, owner of Arnold's, Thomas' English Muffins, Stroehmann's, Entenmann's and dozens more brands -- though Bimbo is already so big another acquisition could face antitrust protests; - Georgia-based Flowers Foods, which owns Tastykake and is expanding production of its own sliced sandwich bread lines at its Oxford, Chester County bakery;
- J&J Snack Foods, the Pennsauken-based owner of dozens of frozen, cafeteria and packaged snacks lines, and a major supplier to Wawa and other retailers.
Maybe buyout firms and other private equity financiers will compete with bakeries to bid for some of the brands, notes Stephanie McAlaine, of the Philadelphia chapter of the Association for Corporate Growth.
If sales were sliding for many years, what was done to fix that?
Was management to focused on what they could get out of staff in pay reductions and such when they should have put efforts into increasing sales?- This comment has been deleted.— jconrad19090
- Jconrad, you are a dimwit. You exemplify what the Republican governor of LA, Bobbie Jindal refers to as the Stupid Party. Hostess makes bad, unhealthy food. Period. Most if not all of their products have low nutritional value. And eh, who do you blame for their sales drop before the Obamas went into office? LOL. There is no limit to Conservative stupidity! — CommonSense in Philly
- This sounds like cover for bad market conditions. People are buying wheat, rye and multi-grain breads. White bread has very little flavor, uses bleached flour etc. And they get to blame the Union, too.— clarktacular
- They overpaid their hourly workers - relative to the market - for too many years, and this is the natural consequence. I understand the employee's reluctance to see their wages reduced to competitive rates, but that was the only solution.— Tony Stark
- The industry is still over capacity. The lines (machines)are worth 1-2 cents on the dollar; the iconic brand name(s) may be worth something. As horrible as it sounds, this helps their competitors - most of whom are in the Philadelphia market.— tooly
- Wow!!! A union that got to big for their pants. This isn't the first firm that liquidated as a result of union troubles.— jerryk2b
- this is capitalism folks..if you cannot survive you get eaten up...its the way of the world...if no one wants your products you have to find a product they do want.— Shemp Howard
- I don't know the answer to this bit I wonder of they ever explored healthier alternatives as their market share was declining?— ghall1961
- Antitrust considerations go out the window when job creation is paramount as 18K workers are laid off. Only idiots at FTC, DOJ would do antitrust examination and screw up things.— Aces high
- Still, a pity for family supporting wage jobs.— robinlupe
This is Tastykake's chance for world domination!!!- I betcha Bimbo buys it.— jcpaul
- Be interesting to see what CEO Gregory Rayburn walks away with.— Smokey
- His millions in bonuses. No doubt everybody on the executive board got their bonuses throughout their financial difficulties. Cut wages, cut benefits, but DON'T cut executive salaries and bonuses. — CommonSense in Philly
