A sweet century
Hostess Brands celebrated its 100th anniversary in 2019. The first Hostess CupCakes hit the market in 1919, marking the sweet beginning of one of the most-beloved American bakery brands. The company marked the occasion with the launch of a special LTO birthday cake flavor of its iconic CupCakes.
Clearly, SF&WB’s readers are big fans. Hostess Birthday CupCakes emerged as the clear favorite in audience voting last month to win “Best New Bakery Product” honors for 2019. The commemorative Birthday CupCakes featured golden cake baked with rainbow sprinkles, then topped with vanilla icing and more rainbow sprinkles.
The revival of Hostess Brands over the past several years is a great success story, and the company is in the process of diversifying its portfolio. Last month, Hostess Brands acquired Voortman Cookies Ltd., a Canadian cookie company with the No. 1 wafer brand on the market. I’ve been hearing buzz about the burgeoning wafer market in the U.S., and this acquisition should bring some momentum to Voortman’s positioning. According to IRI and as reported in our June 2019 “State of the Industry” analysis, Voortman saw its sales grow 10.4 percent to $116.3 million for the 52 weeks ending March 24, 2019. In addition to its strong wafers business, which includes sugar-free options, Voortman offers a range of specialty cookies.
Hostess Brands naturally has significant strength in snack cakes and sweet goods. Our 2019 “State of the Industry” coverage, anchored by IRI data, saw Hostess Brands hit sales of $688.5 million in bakery snacks, and $388.7 million in doughnuts. Its pastry/Danish/coffee cakes business dropped just a bit to $172.0 million, and muffin sales declined 10.1 percent to $44.5 million.
With Voortman, Hostess Brands is clearly looking to breathe some diversification into its business. The company is also shaking things up in the front office. As of last month, Tom Peterson, formerly executive vice president and CFO, is now in the newly created role of executive vice president, strategy and M&A, leading us to believe that there are more acquisitions coming down the pike. Hostess Brands is smartly positioning itself for continued growth—hopefully for another 100 years and beyond.