New business model means sweet victory for Hostess

Remember the so-called "panic" over a potential Twinkie shortage several years ago?

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Hostess CEO Andy Callahan says the company has recovered from a workers' strike and subsequent bankruptcy in 2012 and it plans to continue expanding.

He told FOX Business' Stuart Varney that changes to the company's business model under investor Dean Metropoulos helped restore Hostess' name.

“We're highly profitable. We're one of the highest margin businesses in food, and we're growing,” Callahan said on Tuesday. “And we have the entrepreneurial spirit of a new team, and the iconic brands of a hundred years.”

Hostess has saved money switching from a direct-to-store sales model to a warehouse shipping model, according to Callahan. Instead of maintaining its own fleet of trucks, Hostess now keeps their products in a central warehouse and supermarkets send their own trucks to the warehouse to collect products from multiple brands at once.

Callahan also admitted that the company's most popular item, the Twinkie, has undergone a recipe change since the company's restructuring.

"From a consumer standpoint, they are very similar if not the identical - but what they do have is a longer shelf life for them to get into the market," he explained.

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When asked how much money Hostess makes from Twinkie sales every year, Callahan wouldn't commit to an exact number, but said it's in the “hundreds of millions.”

“Last year, we had revenue of over $900 million, close to $900 million in sales. We'll do over that this year.”

Callahan became CEO in 2018 and has been capitalizing on the 100-year-old brand's status as an American icon.