Wednesday, July 10, 2013

Twinkies Return - July 15


On Monday, all will be right with the world once more.

From the Wall Street Journal:

As more than 50 million Twinkies start making their way to stores next week, the first order of business for the 83-year-old brand's new owner is to let customers know a classic is back.

But behind the return of the familiar cream-filled sponge cake is a leaner operation, free of the union contracts and the $1.3 billion in debt that saddled the brand's previous owners. With that clean slate, the new owner and chief executive, C. Dean Metropoulos, plans to launch an ambitious growth plan and avoid the problems that led to two Chapter 11 bankruptcies, the last of which ended in liquidation.

In his first interview about the company's strategy, Mr. Metropoulos said the new Hostess Brands LLC, based in Kansas City, Mo., will be focused on innovation, efficiency and getting more Twinkies in more places.

"Wherever you find a Snickers bar or M&Ms, you should be able to find a Twinkie," he said.

Some workers who are returning to the company are being paid significantly less than they were before the bankruptcy.

The previous distribution system involved roughly 6,000 drivers—all with union wages and pension benefits—delivering products to stores and placing them on shelves. The old Hostess distribution was governed by complicated work rules that required drivers to deliver bread and cakes on separate trucks, adding costs. Those delivery routes also reached only 50,000 of the country's roughly 150,000 convenience stores, and left some pockets around the country entirely without Twinkies.

Now Mr. Metropoulos is using third-party drivers to deliver products to retailers' warehouses, which he said will enable big expansion. He expects to reach a total of about 110,000 convenience stores by year-end—and to start reaching dollar stores, club stores, drug stores and vending machines, where its products previously were absent.

Mr. Metropoulos's workforce isn't unionized and he is moving to automate and improve the capacity of the plants, while eliminating products that sold poorly or were only sold regionally, such as jelly doughnuts and Strawberry CupCakes.

The old Hostess had approximately 19,000 employees, many of whom worked on brands such as Wonder Bread that Mr. Metropoulos's group didn't buy. The new Hostess is planning to have about 1,800 workers when it is fully staffed in the next couple of months.
I'm sure union hacks aren't happy, but employing 1,800 people is better than none.

The most efficient, cost-effective process in making and delivering Twinkies or any product is what matters in a free market.

People want Twinkies and now they can get them.

That's good.

Twinkie love should encourage entrepreneurs to create a must-have treat.

I wonder if Michelle will push Obama to put out a statement declaring Monday a dark day in our history.

(Note to Michelle: Twinkies have NOTHING to do with obesity. They've been around since 1930. High-calorie sweet stuff has been around forever.)

Will Mayor Michael Bloomberg ceremonially dump a box of Twinkies in the East River, in protest?

Will Obama issue an executive order demanding that Twinkies be banned?

No, not before the 2014 elections.

He may declare July 15th Broccoli Awareness Day.

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