SAN FRANCISCO (KCBS)— It wasn’t long ago that we were reporting on the demise of the iconic snack food company behind Twinkies.
Hostess had gone through two bankruptcies and five CEO’s before finally shutting down in November of 2012, but investors took over, forming Hostess Brands. Little more than two years later business seems to be booming, so much so that Standard & Poor’s upgraded the company’s corporate rating from B minus to B.
Many people thought we’d be seeing the last of the ‘Twinkie’. What happened?
“There was national mourning it seemed when there were no more Twinkies,” Forbes Magazine Editor Randall Lane quipped.
Lane says many wrote Twinkies off, but as it turns out, it’s still got some life left in it along with that mysterious white filling.
“A little bit of financial reengineering and a little chemical engineering actually lengthening the shelf life of the Twinkie, allowing it to be warehoused, has made it incredibly valuable,” he said.
The entrepreneurial team behind the Hostess restructuring is expected to make $2 billion in less than two years from their endeavor on Twinkies alone.
But you’re probably thinking, ‘Don’t Twinkies last forever already?’ Truth be told, according to Forbes, the Twinkies’ shelf life was 25 days.
“We call it the cockroach of consumer foods here,” he said. But Hostess figured out a way, “chemically” to make the spongey snack to last 55 days. “Believe it or not, the Twinkie has become more bullet proof.”
The business partners did not buy the Wonder Bread brand, simply honing in on Hostess to figure out a way they could make it so their products could be warehoused.
“All of a sudden you’re doing with 1,000 people what it used to take 19,000 to do. And all of a sudden instead of losing lots of money, it’s incredibly profitable,” Lane said.
The irony is that this comes at a time when there seems to be a cultural shift away from processed foods for more health-conscious options.
“There’s a nostalgia. There’s a reason that everyone heard when the Twinkie went bankrupt and why a lot of people are talking about our cover story today. This is a very unique brand. It’s a very iconic, nostalgic brand.”
So there you have it; Ding Dongs, Sno Balls and Hostess Cupcakes appear to be here to stay.