Hostess Brands, Inc. (Nasdaq: TWNK), makers of iconic American snack cakes like Twinkies, Ding Dongs, Ho Hos and CupCakes, visited the Nasdaq MarketSite in Times Square on Thursday, November 10, to celebrate the company’s listing on The Nasdaq Stock Market.
Hostess has seen considerable changes over the past four years. In November 2012, Hostess filed for Chapter 11 bankruptcy protection. But in 2013, a new Hostess Brands company was formed under the leadership of Apollo Global Management and Metropoulos & Co. By June of that year, the bakeries were operational, with its range of classic snack cakes hitting stores by July.
Since then, sales have steadily climbed. As Snack Food & Wholesale Bakery reported in its 2016 State of the Bakery Industry Report published this past summer, Hostess Brands saw growth of 3.20 percent in dollar sales in the Bakery Snacks category for the 52 weeks ending April 17, 2016, posting $599.11 million in sales, per IRI, Chicago. This week’s public offering valued the company at $2.3 billion.
In order to learn more about this latest development in the growth of Hostess Brands, we reached out to Bill Toler, CEO, Hostess Brands, who rang the Nasdaq opening bell to commemorate the occasion.
Douglas J. Peckenpaugh: Why did Hostess Brands make the decision to go public?
Bill Toler: Hostess can realize significant growth potential and further capitalize on its momentum through its recent acquisition by Gores Holdings, Inc.
DJP: To what do you attribute this amazing turnaround by Hostess over the past few years?
BT: We’ve invested significant energy and resources in three key areas:
- Quality and efficiency, creating a more efficient company with streamlined operations.
- Through our enhanced distribution model, we’ve been able to extend our products’ reach, ultimately getting into the hands of more consumers.
- A focus on product innovation, including a range of seasonal flavors, sweet shop brownies and exciting new products like Deep Fried Twinkies.
DJP: How will Hostess continue to build momentum across retail grocery and foodservice channels?
BT: Our innovation pipeline continues to keep our classic brands fresh and interesting, exciting consumers and driving sales. In addition to our introduction into the freezer aisle with Deep Fried Twinkies earlier this year, consumers can expect to continue seeing a robust portfolio of interesting flavors and snack items.
DJP: Why do Hostess products have such an enduring appeal with American consumers?
BT: The Hostess brand—and its sub-brands including Twinkies, CupCakes and Donettes—have a tremendous nostalgic connection with consumers that crosses generational lines. Parents remember eating Twinkies as children and in turn share their fondness for this indulgence with their children, creating a new generation of Hostess fans.
DJP: What’s next for Hostess Brands?
BT: In 2017, consumers can expect to see innovation specifically for Twinkies, our most-iconic snack cake. Our focus on product innovation also reaches into the frozen aisle, as we continue to expand in the area building on the excitement of Deep Fried Twinkies. And finally, due to the escalating popularity of peanut butter, we’ll be incorporating this favorite flavor into a number of exciting new products, such as an upcoming Peanut Butter Ho-Ho.
For more on the trends shaping the snack cakes market, including comments from Hostess Brands, see “State of the Industry 2016: Flavors, indulgence continue to drive snack cake sales.”