Hostess' Comeback Now Includes Twinkies Ice Cream

By Daniel B. Kline Markets Fool.com

Hostess' revival from bankruptcy protection to growing brand continues with three of the company's signature pastry treats -- Twinkies, Sno Balls, and CupCakes -- being made into ice cream. These limited-edition frozen treat pints will hit Dollar General (NYSE: DG) stores in February before being released to convenience stores later in the year, CSP Industry News reported. This introduction, which may include even more Hostess-inspired flavors down the line, follows deep-fried Twinkies being added to the freezer section at Wal-Mart (NYSE: WMT).

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The ice cream will be a partnership between Hostess and Nestle (NASDAQOTH: NSRGY). Neither company has said how long the "limited-time" offer will last.

Hostess makes Twinkies and a number of other pastry treats. Image source: Hostess.

What will Twinkies ice cream be?

The Twinkies ice cream flavor will, according to CSP, include "sweet buttercream-flavored ice cream, sponge cake pieces and a vanilla frosting swirl." For the CupCakes variety, Nestle will use "chocolate ice cream, cake pieces and a cream frosting swirl," while the SnoBalls flavor will have a "marshmallow-flavored ice cream with chocolate cake pieces and a whipped coconut swirl."

Why is this happening?

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Taking well-known food brands and moving them into new areas has been a growing trend. It's a phenomenon that has driven traffic to fast-food brands that have added snack chips including Doritos, Cheetos, and Fritos, to everything from tacos to hamburgers and fried macaroni and cheese balls.

For the rights holder, these partnerships offer an opportunity to leverage a familiar brand name into a new format, which can bring in licensing revenue while serving as promotion for the original product. For a restaurant chain or stores like Dollar General and Wal-Mart, the tie-in with a well-known brand can bring in more foot traffic as fans of the original product seek to try it in its new form.

Is this a good idea?

While it's hard to see Twinkies, CupCakes, and SnoBalls being a long-term ice cream brand, as a short-term novelty it could be a hit as the products have fans young and old.

Choosing to distribute through Dollar General and convenience stores instead of traditional supermarkets will limit sales, but the exclusivity could push curious customers to the places stocking these novelty treats. In addition, should the line be successful, Nestle and Hostess can eventually broaden distribution.

Twinkies, Sno Balls, and CupCakes ice cream flavors could be a traffic driver for Dollar General because they are unique, but the concept is easy to understand. Mixing ice cream and baked goods is not a new idea as Oreo/cookies and cream flavors have long existed as have ice creams tied to various Girl Scout cookies. Using a well-known brand name like the Hostess products should spur at least one-time interest and should send Dollar General some new customers.

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The author(s) may have a position in any stocks mentioned.

Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Nestle. The Motley Fool has a disclosure policy.