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(BusinessWeek)   What really killed Twinkies   (businessweek.com) divider line 158
    More: Followup, Hostess Brands, Wonder Bread, Clorox, toiletries, Oil of Olay, market data, Procter & Gamble, Self-Defense Forces  
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8390 clicks; posted to Business » on 20 Nov 2012 at 2:56 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-20 08:34:15 AM
Hostess got Bained.
 
2012-11-20 08:39:24 AM
Greed
 
2012-11-20 08:44:15 AM
Armchair quarterbacks gather together for a harrumph meeting, ask plaintively, "why you no innovate, hostess?" Note that no question of "why you buy debt like bowls of hotel desk mints?" was posed.
 
2012-11-20 09:17:11 AM

bunner: Armchair quarterbacks gather together for a harrumph meeting, ask plaintively, "why you no innovate, hostess?" Note that no question of "why you buy debt like bowls of hotel desk mints?" was posed.


I don't think TFA was arguing that Hostess should stop making Twinkies. I think what they're saying is that the Hostess Brands are devoid of anything healthy.
 
2012-11-20 09:30:32 AM

slayer199: I think what they're saying is that the Hostess Brands are devoid of anything healthy


Possibly, but that had nothing to do with their slow float to the top of the tank, or else every burger joint, Taco Bell and DQ would be auctioning off their griddles.
 
2012-11-20 12:21:46 PM

MaudlinMutantMollusk: Greed


And poor management.
 
2012-11-20 12:53:23 PM
The market was ready for whole-grain twinkies, but NO!
 
2012-11-20 01:06:04 PM
Bullsh*t.
Sure, they could do orange Twinkies for Halloween (or whatever) like Oreo does, but it wouldn't have saved them. Their classic stuff was still selling. The company was poorly run.
 
2012-11-20 01:10:46 PM

violentsalvation: The market was ready for whole-grain twinkies, but NO!


LOL. Hell no. If I want a twinkie, I want all the sugary goodness. But Hostess could have come out with protein bars or healthy alternatives to their gloriously sugary junk food. I think TFA has a legitimate point regarding Hostess NOT expanding beyond their junk food.
 
2012-11-20 01:19:50 PM
All I know is that Tallahassee is gonna be pissed.
/not obscure.
 
2012-11-20 02:29:01 PM
This never would have happened under Fruit Pie the Magician's watch.
 
2012-11-20 02:58:41 PM
There ain't never gonna be no more Twinkies ever again!
 
2012-11-20 03:02:49 PM
They were managed by Frank Burns.
 
2012-11-20 03:04:21 PM
Their market was not expanding, when news of Twinkies demise reached me I went looking for one just for nostalgia sake, then I realized I haven't had a twinkle in 25 years, If I haven't used a product in a quarter century why would I miss it, and my experience is amongst my friends was not unique, I have not stopped snacking it's just that I have no use for Twinkies or even Wonder bread, the most anti-nuritious bread on the market.
 
2012-11-20 03:05:24 PM

give me doughnuts: Hostess got Bained.


Done in one.

Even the ultra-conservatives I know - who were all for Romney and the free market - are speaking out against the vulture capitalism that took away their Twinkies.
 
2012-11-20 03:05:38 PM
I think Twinkies suck, and I haven't had one in at least a decade. It's my fault. Sorry guys.
 
2012-11-20 03:10:20 PM
When the product has nothing that resembles, milk, eggs, sugar or flour, Im out. Havent had one in almost a decade either. I can make a nice sponge cake with a cream topping for damn near the price of a box and it tastes a hell of a lot better. TFA sort of alluded to that.
 
2012-11-20 03:12:27 PM

slayer199: I think TFA has a legitimate point regarding Hostess NOT expanding beyond their junk food.


There is a difference between expanding and losing. I don't think anyone is arguing that they expected hostess to grow 20% per annum with the current product line.

But they still sold! How do you lose money selling twinkies?

Unions, that's how.
 
2012-11-20 03:14:19 PM

bunner: slayer199: I think what they're saying is that the Hostess Brands are devoid of anything healthy

Possibly, but that had nothing to do with their slow float to the top of the tank, or else every burger joint, Taco Bell and DQ would be auctioning off their griddles.


Yeah, but even McDonald's branched out with the salad. Doritos comes out with new flavors practically every year. When's the last time you heard about a new snack cake come out from Hostess?
 
2012-11-20 03:17:55 PM

Rev. Skarekroe: Bullsh*t.
Sure, they could do orange Twinkies for Halloween (or whatever) like Oreo does, but it wouldn't have saved them. Their classic stuff was still selling. The company was poorly run.


And they did try to do gimmicky stuff like a ridiculous cookbook and limited edition flavors. Even colored Twinkies like you suggest would only do a nominal, short-term boost. Everything I've read on this has pointed mainly to horrible, incompetent management. The unions were a HUGE drain on expenses, yes, but their management seemed primarily interested in making a quick buck.

/If they were going to make an "innovative" product, they should mass-produce fried Twinkies & sell them in frozen cases. I'm betting that would have been a big seller. Look at what Crave Cases did for White Castle, for example.
 
2012-11-20 03:23:06 PM
It doesn't cost that much to put "organic" on the box.
 
2012-11-20 03:23:42 PM
FTF-marketdroid-A: As a result, the grocery store is full of brands that haven't truly innovated in years and are dying long, slow deaths. Many of them are iconic and well-known, including Palmolive (CL) dish soap, Morton Salt (SDF), and Crisco (SJM) oil.

img11.imageshack.us

You want me to farking innovate the marketing of salt? SALT?  Go kill yourselves.
 
2012-11-20 03:26:01 PM

EighthDay: give me doughnuts: Hostess got Bained.

Done in one.

Even the ultra-conservatives I know - who were all for Romney and the free market - are speaking out against the vulture capitalism that took away their Twinkies.


For all the farklibs desperately spinning to blame this on private equity, it's not private equity's fault. It was a flawed company that private equity tried to turn around:

Ripplewood, which was founded by Timothy C. Collins, a major Democratic donor, is expected to lose most, if not all, of the $130 million or so it invested in Hostess.
 
2012-11-20 03:26:53 PM

brigid_fitch: And they did try to do gimmicky stuff like a ridiculous cookbook and limited edition flavors. Even colored Twinkies like you suggest would only do a nominal, short-term boost. Everything I've read on this has pointed mainly to horrible, incompetent management. The unions were a HUGE drain on expenses, yes, but their management seemed primarily interested in making a quick buck.

/If they were going to make an "innovative" product, they should mass-produce fried Twinkies & sell them in frozen cases. I'm betting that would have been a big seller. Look at what Crave Cases did for White Castle, for example.


The company was a mess...from management down to the unions. While farkers may agree or disagree with TFA, it is true that Hostess did not expand their markets which certainly hasn't done them any favors.

Your idea is spot on. If Snickers can cross-market with ice cream, then Hostess could come up with some other tasty treat to sell.
 
2012-11-20 03:31:45 PM
Really, failing to market your brand is a death wish. I can't think of any Hostess product I've seen advertised in several decades. Back in the 50s, I don't think TV would have survived without Hostess ads.
 
2012-11-20 03:32:24 PM
It's easy to say "Well, they needed to innovate!", but I'd love to see the same people saying that have even a somewhat realistic idea of HOW to innovate snack cakes. Every example they gave of other businesses were businesses that could branch out easily while still delivering their product. What would Hostess have done, released Bake your own Bread kits? Make Your Own Twinkies?
 
zez
2012-11-20 03:32:31 PM
I think the author wanted Hostess to start doing the same crap that Mt Dew, Doritos and Cheeze-its do now by coming up with stupid trendy crap and mixing flavors all around.
 
2012-11-20 03:36:17 PM

SevenizGud: slayer199: I think TFA has a legitimate point regarding Hostess NOT expanding beyond their junk food.

There is a difference between expanding and losing. I don't think anyone is arguing that they expected hostess to grow 20% per annum with the current product line.

But they still sold! How do you lose money selling twinkies?

Unions, that's how.


More like Hostess wasn't making ENOUGH, so they liquidated the company and blamed the unions. Don't get me wrong - I detest unions like the next guy, but VC firms shut down profitable companies all the time not because they aren't profitable, but because they aren't profitable *ENOUGH*.
 
2012-11-20 03:38:30 PM
Not sure why the author says Morton is dying a long slow death. They mine and sell salt. I'm pretty sure if they're involved with the Mining part of salt-selling, and their mining efficiency meets or beats their competitors, they're not going anywhere.
 
2012-11-20 03:40:19 PM

Nezu Chiza: It's easy to say "Well, they needed to innovate!", but I'd love to see the same people saying that have even a somewhat realistic idea of HOW to innovate snack cakes.


There's no point in innovating snack cakes, it's all the other stuff Hostess made that needed innovation, like all the bread products.
 
2012-11-20 03:43:02 PM

neilbradley:
More like Hostess wasn't making ENOUGH, so they liquidated the company and blamed the unions. Don't get me wrong - I detest unions like the next guy, but VC firms shut down profitable companies all the time not because they aren't profitable, but because they aren't profitable *ENOUGH*.


That's why some TV shows get shi*t-canned, but I doubt that's the case here.
That statement would only make sense if they could take the resources they dedicated to Hostess, and bring that money elsewhere to invest more profitably (like using a TV time slot better, for instance.)

The VC guys are losing their money. Lost money isn't profitably invested elsewhere- it's gone.
 
2012-11-20 03:45:15 PM

Arkanaut: Yeah, but even McDonald's branched out with the salad. Doritos comes out with new flavors practically every year. When's the last time you heard about a new snack cake come out from Hostess?


www.rottenecards.com

Seriously. How many people EAT those? Almost none. They sell Big Macs. Lots of them,. Hostess sold a lot of Twinkies and it didn't make them go broke and neither did paying the people who brought the money in the door a decent wage.
 
2012-11-20 03:46:00 PM
failure to innovate is a minor part of the problems that killed Hostess, getting bained as Give me donuts so perfectly put it is what really did it. Instead of putting the profits to work to fix Hostess' ails the execs pocketed it slowly sucking the ability to function out of the company. The they had the gall to give them selves massive raises and force paycuts on the unions and now they have unmittigated gball to ask the bankruptcy court to allow them to give the very execs that killed the company a $1.75 million dollar bonus.

Link
 
2012-11-20 03:56:16 PM

dfenstrate: The VC guys are losing their money.


There was no venture capital here, it was private equity, and private equity people borrow most if not all of the money use.
 
2012-11-20 03:58:09 PM

Lawnchair: You want me to farking innovate the marketing of salt? SALT? Go kill yourselves.


Look, I'm a big proponent of the suicide of marketing people, but I have to say, I agree with TFA. There are somethings that are just waiting to be sold and need marketing to make people aware of them. Innovative salt products are just waiting to be sold. Ionized salt, ick. But sea salt from various exotic places? Sign me up. I just bought some pink Himalayan sea salt. I love it.... I can totally think of five other products that are just waiting to be sold that are salt based (Mortons people, call me.) Garlic flavored salts (yeah it's just garlic salt)... nacho flavored salt.... cayenne pepper salt.
 
2012-11-20 04:02:45 PM

DemoKnite: When the product has nothing that resembles, milk, eggs, sugar or flour, Im out. Havent had one in almost a decade either. I can make a nice sponge cake with a cream topping for damn near the price of a box and it tastes a hell of a lot better. TFA sort of alluded to that.

Enriched Bleached Wheat Flour [Flour, Reduced Iron, B Vitamins (Niacin, Thiamine Mononitrate (B1), Riboflavin (B2), Folic Acid)], Corn Syrup, Sugar, High Fructose Corn Syrup, Water, Partially Hydrogenated Vegetable and/or Animal Shortening (Soybean, Cottonseed and/or Canola Oil, Beef Fat), Whole Eggs, Dextrose. Contains 2% or Less of: Modified Corn Starch, Glucose, Leavenings (Sodium Acid Pyrophosphate, Baking Soda, Monocalcium Phosphate), Sweet Dairy Whey, Soy Protein Isolate, Calcium and Sodium Caseinate, Salt, Mono and Diglycerides, Polysorbate 60, Soy Lecithin, Soy Flour, Cornstarch, Cellulose Gum, Sodium Stearoyl Lactylate, Natural and Artificial Flavors, Sorbic Acid (to Retain Freshness), Yellow 5, Red 40.


No milk, although 'sweet dairy whey' is something anyone who makes cheese will recognize.

Seriously, I don't eat twinkies either, but stop the bullshiat, OK? You're as bad as the people saying Arby's is made out of liquid beef substitute. Can't they just taste shiatty and that's reason enough? You have to try to lie to make people think they don't have natural ingredients? Thinking of the usual Twinkie fan, even if it were true how many would stop?
 
2012-11-20 04:07:39 PM

Bacontastesgood: Seriously, I don't eat twinkies either, but stop the bullshiat, OK? You're as bad as the people saying Arby's is made out of liquid beef substitute.


Did you know they had to change the name of "Kentucky Fried Chicken" to "KFC" because legally the genetically engineered abominations they serve to the publicly are no longer technically or legally chickens?

/kidding
 
2012-11-20 04:07:58 PM
The Ghostbusters did in Twinkie the Kid?
 
2012-11-20 04:10:56 PM
Open Hostess outlets next to medicinal marijuana distributers.
 
2012-11-20 04:12:05 PM

Nezu Chiza: It's easy to say "Well, they needed to innovate!", but I'd love to see the same people saying that have even a somewhat realistic idea of HOW to innovate snack cakes. Every example they gave of other businesses were businesses that could branch out easily while still delivering their product. What would Hostess have done, released Bake your own Bread kits? Make Your Own Twinkies?


I think you missed the point.

They needed to branch out from Twinkies with new innovative products.

How about a line of Mexican pastries to take advantage of the increases in the Hispanic population? The Japanese seem to go gaga over jellied seaweed.
 
2012-11-20 04:20:36 PM

Snarcoleptic_Hoosier: MaudlinMutantMollusk: Greed

And poor management.


Yep. Bad management made it possible for the vulture-capitalists to dive in. As soon as that happened, the grave was dug.
 
2012-11-20 04:26:46 PM

EighthDay: give me doughnuts: Hostess got Bained.

Done in one.

Even the ultra-conservatives I know - who were all for Romney and the free market - are speaking out against the vulture capitalism that took away their Twinkies.


In addition to taking away their "bread," vulture capitalists are about to take away their circuses as well -- Clear Channel is axing shows and employees to pay its over-20-billion-dollar debt to Bain Capital.
 
2012-11-20 04:27:08 PM

beantowndog: It doesn't cost that much to put "organic" on the box.


ORLY?
 
2012-11-20 04:27:33 PM
How in the blue f*ck do you innovate a twinkie ?
 
2012-11-20 04:28:26 PM
Asset stripping: it's not just for former Soviet manufacturing concerns anymore
 
2012-11-20 04:29:09 PM
Shoulda brought back banana twinks 

you know what I mean
 
2012-11-20 04:33:29 PM
I always wondered why they never came out with a fried twinkie.

/Staple of all the State Fairs I have ever been to.
Shudders
/Now what will the State Fairs do? C'mon Hostess, think of the State Fairs. Do it for the State Fairs.
 
2012-11-20 04:34:21 PM

zerkalo: Shoulda brought back banana twinks 

you know what I mean


If you do a GIS of that, make sure you have Safe Search turned on.
 
2012-11-20 04:37:19 PM
No, they had no need to innovate. People would have bought their products regardless.

It's just a few jackasses up at the top who got greedy and decided that they'd rather ruin it for everybody else than miss out on a bonus this year.
 
2012-11-20 04:39:29 PM

simplicimus: All I know is that Tallahassee is gonna be pissed.
/not obscure.


overcompensating.com

/yeah, I know that's not what you meant
 
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