The Twinkie’s twilight
Ho Hos, Wonder Bread also toast as Hostess Brands closes its doors in the U. S.
A snack that’s more American than apple pie becomes a collector’s item as its extinction, along with that of other Hostess snacks, looms in the U. S.
Twinkie junkies have spoken. Since Hostess Brands Inc. announced Friday it is going out of business after striking workers across the country crippled its ability to make its snacks, Americans have been scooping up Twinkies, Ding Dongs and Ho Hos as supermarkets are running out and fans are pushing up prices on eBay.
A Jewel- Osco store in Chicago was already out of Twinkies on Friday.
“We may have a few things left, but pretty much we’re out of our Hostess stuff,” Paul Knoblock, assistant store manager, said in a telephone interview.
The store is supposed to receive another Hostess delivery Saturday and he hasn’t heard of it being cancelled, he said.
Meanwhile, a 10- pack of Twinkies was available on eBay for $ 24.99 and four 10- packs were listed for $ 99.99 on the online retailer’s website. Other Hostess products including Zingers, Coffee Cakes and Cup Cakes were also for sale on eBay.
Hostess, which also makes Wonder Bread, plans to fire more than 18,000 employees and liquidate assets after a nationwide strike by bakery workers crippled operations. The 82- year- old maker of snack cakes was undone by the strike after changes in American diets led to years of declining sales while ingredient costs and labour costs rose.
In Canada, George Weston Ltd. of Toronto counts Wonder Bread among its brands while Montreal- based Saputo Inc. has rights to the Hostess brand but doesn’t include Twinkies in its current lineup of snack cakes.
Weston holds the rights to the Wonder Bread name in Canada independently and company spokesman Geoff Wilson said Friday that it has no interest in acquiring the manufacturing assets or brand names of Hostess in the U. S.
On Friday, searches for Hostess on Google were about 11 times higher from a week ago, and searches for Twinkies were 17 times higher, according to data from Crystal Dahlen, a spokeswoman for Google Inc.
“We’re actually seeing a big jump in searches for both Hostess and Twinkies,” she said in an email.
Supervalu Inc., the third- largest U. S. grocery- store chain, also reported it’s seeing a jump in sales.
“We are definitely seeing an increase in customers purchasing Hostess products and expect this will continue as news about the company spreads,” Mike Siemienas, a spokesman for Eden Prairie, Minn.- based Supervalu, said in an interview. Hostess delivers its food directly to stores, so there is no inventory in Supervalu warehouses, he said.
“We will only have the products while supplies last,” he said.
“I don’t know if they thought that was a bluff,” CEO Gregory Rayburn said on CNBC Friday. He said the financial impact of the strike makes it “too late” to save the company even if workers have a change of heart. That’s because the clients such as retailers decide to stop carrying products when supplies aren’t adequate.
Rayburn said he’s hopeful that the company will find buyers for its roster of about 30 brands. The company books about $ 2.5 billion in sales a year.
Hostess, based in Irving, Texas, said its stores will remain open for several days to sell remaining products. Operations at its 33 factories were suspended Friday. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.
The move comes after thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike last week after rejecting a contract offer that slashed wages and benefits in September. The bakers union represents about 30 per cent of the company’s workforce.
A union representative did not immediately return a call seeking comment.
Hostess had said earlier this week that production at about a dozen of its plants were seriously affected by the strike. Although many workers decided to cross picket lines, the company said it wasn’t enough to keep operations at normal levels. Three plants were closed earlier this week.
Hostess had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. The Teamsters had urged the bakery union this week to hold a secret ballot on whether to continue striking.
Hostess said the company is unprofitable under its current cost structure, in large part because of union wages and pension costs. Rayburn said in a statement on the company website that all employees will eventually lose their jobs, “some sooner than others.”
“Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the ( company) can offer you at this time,” Rayburn wrote.
Hostess, founded in 1930, was fighting battles beyond labour costs. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating.