Published July 15, 2013
Hostess Brands made its triumphant return Monday after an eight-month hiatus, satisfying millions of Americans who were hungry for its iconic Twinkies and other cakes.
But not everything is the same for Hostess. Its headquarters was moved from Texas to Kansas City, Mo. The bakery slashed costs and changed the way it delivers its products.
And unlike its bankrupt predecessor, the revamped bakery is taking the fight for snack-cake dominance head-on, creating a large-scale marketing campaign that puts Hostess in clear view.
Hostess President Rich Seban said the company set in motion a grass-roots campaign, complete with a food truck making the rounds. The bakery is also promoting its comeback using social media and a website called Prepare Your CakeFace, which encourages fans to post Instagram and Vine videos of themselves enjoying their favorite Hostess snack.
“We’re not only trying to return. We want to return stronger than before,” Seban, who previously served as chief operating officer, said of the marketing blitz.
Regardless of how well-known the brand is, it’s typical for companies emerging from a long hiatus to market heavily since consumers have short memories, said Anthony Michael Sabino, a professor at St. John’s University.
For Hostess, the situation was a bit different than some other restructurings like American Airlines.
“This is unique. You won’t see this for another 100 years. Hostess didn’t really need to advertise. The moment there was a threat that Twinkies would disappear from shelves, America went bonkers,” Sabino said. “The new owners didn’t have to go through the trials and tribulations of rebranding.”
Those new owners, Apollo Global Management (APO) and C. Dean Metropoulos & Co., paid $410 million for Hostess-brand cakes, including Twinkies, Ding Dongs, CupCakes and Ho Hos. Hostess interested the private equity firms because of its iconic nature, a characteristic it shares with some other Metropoulos brands such as Pabst Brewing Company and Chef Boyardee.
Despite having name recognition some brands can only dream of, the new Hostess was intent on coming out of bankruptcy swinging, especially with former Hostess brand Drake's now in the hands of McKee Foods.
“It’s not just about yesterday. It’s about today, and we’re going to continue to market the brand aggressively,” Seban said.
Hostess expects to invest in developing new products. Gluten-free snacks and low sugar alternatives are in the works, while new tastes and textures will be explored.
“It’s about knowing what the customer wants,” Seban said. “We’re going to work hard on the innovation side.”
Sabino said Hostess’ main job now will be to focus on deflecting some criticism over the size of Twinkies, which are now smaller than most consumers will remember. The change was made by the former Hostess in the months leading up to bankruptcy.
“Still, Americans are fully aware products that fall on hard times usually go through a metamorphosis,” Sabino explained. “The American consumer will be forgiving. They won’t be worried about Twinkies shrinking. It’s better to have the product out than not at all.”
He added: “All I can say is, God bless America, the Twinkies are back.”