Twinkies Maker Hostess Files for Chapter 11 Protection

I guess America has reduced its twinke consumption enough to help push Hostess into chapter 11.  This is the second major restructuring for the privately held company in the past three years.  Not even the free publicity Hostess received sponsoring Ricky Bobby's race car in Talladega Nights could prevent this situation from happening.


The real reasons for the filing according to the company are higher input costs such as sugar and flour as well as increased labor costs.


The company stated the following;

• "Whether the debtors can achieve long-term viability depends directly and substantially on the debtors' ability to achieve dramatic change to their labor agreements, with a corresponding material reduction in their cost structure and legacy pension and medical obligations, and a restructuring of their capital structure," Hostess said in court papers. "That is the purpose and the focus of these Chapter 11 cases."
• "We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees," President and Chief Executive Brian Driscoll said in the statement. 
• "While no agreement has been reached to date, the Teamsters Union remains committed to working with all stakeholders during the bankruptcy to find a mutually agreeable solution, if possible," said Dennis Raymond, director of the Teamsters Bakery and Laundry Conference, in a statement

A Breif History of Twinkies

According to this WSJ article, Sales of its signature Twinkies have declined a bit recently while the overall bakery-snacks category has been about flat. Nearly 36 million packages of Twinkies were sold in the year ended Dec. 25, down almost 2% from a year earlier, according to data from SymphonyIRI Group, a Chicago-based market-research firm. The data captures sales from supermarkets, drugstores, mass-market retailers and convenience stores, but exclude sales from Wal-Mart Stores Inc. and club stores.