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non-starter

Saint Paul, MN

#1 Mar 22, 2013
Judge OKs Hostess's Twinkies, Ding Dongs sale

Credit: Reuters/Jim Young

Tue Mar 19, 2013 3:11pm EDT

(Reuters)- Twinkies, Ding Dongs and Wonder Bread may soon be back in stores after a bankruptcy court judge on Tuesday approved sales of several iconic brands that had been owned by the failed Hostess Brands Inc.

Buyout firms Apollo Global Management and Metropoulos & Co teamed up for Hostess's snack cake brands, paying $410 million for Twinkies, Ho Hos, Ding Dongs and Donnettes.

Flowers Food Inc, which makes Tastykakes snacks, picked up most of Hostess's bread business, including its Wonder and Nature's Pride brands for $360 million. The No. 2 U.S. baking company also bought 20 bakeries and other operations.

The Beefsteak brand of bread was sold for $31.9 million to Mexico's Grupo Bimbo S.A.B. de C.V., the world's largest bread maker. Bimbo already owns Entenmann's cakes, Arnold bread and Thomas' English Muffins.

Hostess also said on Tuesday that United States Bakery had the winning bid in the March 15 auction for its remaining bread brands: Eddy's, Standish Farms and Grandma Emilie's. United States Bakery agreed to pay $30.9 million.

Hostess filed for bankruptcy last year and gave up on its plans to emerge from bankruptcy in November, blaming a strike by its bakers union for its failure to emerge from Chapter 11.

The bakers union said in a statement on Tuesday its members would be "indispensable partners" in restarting the former Hostess facilities and getting the products back into stores.

The money raised from the sales will be used to pay off Hostess's creditors, which the company said totaled $1.43 billion when it filed for bankruptcy.

Hostess will return to court on April 9 to ask U.S. Bankruptcy Court Judge Robert Drain to approve the sale to United States Bakery and a separate sale of its line of Drake's snacks. Drake's Coffee Cake, Ring Dings and Devil Dogs were sold to McKee Foods Corp for $27.5 million.

The bankruptcy is: In re Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

I especially liked this line in the Reuters article.....

"The bakers union said in a statement on Tuesday its members would be "indispensable partners" in restarting the former Hostess facilities and getting the products back into stores."

Yeah, like any of the new owners are going to start off with the union that killed off the restructuring in bankruptcy court.

Unions, for people bad at rational thought.
non-starter

Saint Paul, MN

#2 Mar 22, 2013
How Do You Revive Twinkies? A Q&A With the New Owners: The Metropoulos Brothers
By Josh SanburnMarch 21, 20130

A few months ago, Twinkies appeared to be on the brink of extinction. The snack cake was disappearing from store shelves across the U.S. because of consumer fears that the cakes would be no more. Hostess Brands — which at that time included Wonder Bread, Ding Dongs, Ho Hos, Zingers, and a couple dozen other snacks and foods — filed for Chapter 11 bankruptcy protection in January 2012 and began shutting its doors by November.

Last week, private equity firms Apollo Group Management and Metropoulos & Co. snatched up the “snack cake” portion of Hostess for $410 million, on March 19 a Manhattan bankruptcy judge officially approved the sale. Metropoulos & Co. has purchased several instantly recognizable all-American brands, including Bumble Bee Tuna, Chef Boyardee, and Pabst Blue Ribbon, Twinkies might be their most iconic holding yet. C. Dean Metropoulos, the 66-year-old founder of the firm, will serve as CEO. But it’s up to his two sons — Daren, 29, and Evan, 32 — to breathe life into the business again.

TIME spoke to Daren and Evan last week about why they bought the Hostess brands.

So, why buy Twinkies?

Evan Metropoulos: It’s an iconic brand and it’s something that millions of Americans love and enjoy. It’s very much worth saving.

But the Hostess brands have been struggling for years. Do you think those brands still have value?

Daren Metropoulos: Throughout the turmoil that the company has had the last few years, the consumer base has not declined. There continues to be strong demand for these products in the marketplace, and we feel we can capitalize on that with some fresh new marketing ideas and some more consistent sales efforts.

EM: Our father is very, very talented as a turnaround specialist, and he has taught us that these brands are resilient and very hard to take down. They have a hard consumer loyalty and with some TLC and some good management fundamentals, these brands can flourish and grow with new audiences.

You guys own a bunch of well-known American brands — Chef Boyardee, PBR, now Twinkies.What’s the common thread in all those?

EM: I don’t know that it always makes sense. We’re talking about several different acquisitions over many years. Luckily some of these brands, because they’re so nostalgic, have struck a chord with younger hipster consumers and people that are on the pulse of what’s trend-setting. If you look at the stock market today, you’ll see a premium being paid for brands that are all-American brands that people grew up with, like Clorox, Smuckers. I think people pay a premium for what they know, what they’re comfortable with.

DM: The commonality has always been that they’re great iconic heritage brands that have intrinsic value. These brands, no matter how badly they’ve been mismanaged, cannot be killed over time. They just need a fresh perspective. They need reinvestments. What we’d like to do is create efficiencies in these companies and reinvest those profits back in product innovation, new marketing ideas, restructuring the sales force, making it a better company from all different angles and on all levels. We move quickly. We don’t like to be slowed down with analytics or bureaucracy. We like to put together a team of people who have a sense of urgency and share the same same vision for these brands, and we move quickly to cut through the red tape, beat the pavement, and try to get better displays, better shelving, better pricing.

EM: Don’t forget, these brands are very coveted trophies. But once these giant conglomerates get a hold of them, they become lost in the shuffle. They become mismanaged because they don’t have entrepreneurs behind them pushing for results, pushing for innovation, for new products. They just become part of a larger investment scheme. So if we could get some individual brands away from some of these conglomerates, we could do miracles with them.
non-starter

Saint Paul, MN

#3 Mar 22, 2013
But hasn’t the era passed when parents are putting Twinkies in kids’ lunchboxes and regularly eating them as a snack? It seems like more Americans today opt for foods that are more nutritious.

DM: Listen, we’re never going to neglect the consumer that loves to buy Twinkies at the convenience store. But we also have to realize that tastes change. So of course we’re going to look to reinvest and innovate new products, whether they be 100-calorie packs or healthier alternatives. I think a grocery strategy would be more targeted towards mothers and healthier options for children and younger consumers. Conversely, there will be an independent convenience store strategy that looks to nurture the core consumer.

How do you think the brand was mismanaged over the years?

EM: I don’t know necessarily that it was mismanaged. I can’t say that it was. I think there were some outside factors that gave the management team some challenges that maybe we won’t have in the future to deal with. I think there are brand extensions and new business opportunities like dollar stores that Hostess hasn’t even tapped into.

What did you guys actually buy?

DM: We’re getting the Hostess brands, which are Twinkies, Ho Hos, Ding Dongs, Cupcakes, Donettes, Zingers, Snoballs, Dolly Madison. And you get the recipes, also.

You actually get the recipe. Like, Here’s the Twinkies recipe. Here it is on this card.

DM: Yeah. Absolutely. And let me tell you this. Research and development will be a big part of this going forward, in terms of increasing shelf life. Currently these products have a 45-day shelf life. We think we can make that better in some respects. And we think there’s always things we can do to refine the taste and the quality and especially in new product development.

(MORE: Time to Start Stockpiling Twinkies? Hostess in Limbo as Workers Strike)

So you’re going to change the Twinkie recipe?

EM: I don’t know if the product needs to be improved, per say. I think the product is excellent, and there was no issue with the product amongst consumers. What I think we’re trying to say is that when you’re starting or using new baking facilities and you have a fresh perspective — and one of the things we’ve always valued over the years is research and development — there will be opportunities to look at baking them to make them as fresh and tasty as possible and to get to the consumer as quickly as possible and to be priced as fairly as possible.

How will the marketing the change? There are reports Zack Galifianakis is on board to be in Twinkies commercials.

EM: I can’t say that is accurate. I can say that we know him. We’ve exchanged e-mails. He’s a huge talent now and I don’t even know if the schedule permits.

DM: I think a lot of it will be guerrilla marketing that we’ve done with many other brands in the past, building on the retro nostalgia of these brands. And we think there’s serious opportunity to develop a merchandise business. So I think it’s going to be a mix of very guerrilla-type, tactical creative marketing and then some more traditional stuff. There could be possibilities for 30-second media advertisements. But certainly there will be an element of guerrilla marketing, or social media marketing, through Twitter, through Facebook, through Instagram, to really get some great viral buzz.

What are your day-to-day responsibilities? And what will your dad be doing?

DM: Our father’s going to be the chief executive officer. We will have roles at the Hostess company. Nothing too defined yet because we’re still putting this deal together. But we will be intimately involved every step of the way.

When can we expect Twinkies to be back on store shelves?

DM: We’re shooting for the summer to get the products back out there.

LIST: Top 10 Iconic Junk Foods

Read more: http://business.time.com/2013/03/21/how-do-yo...
non-starter

Saint Paul, MN

#4 Mar 22, 2013
From the article above, "I don’t know necessarily that it was mismanaged. I can’t say that it was. I think there were some outside factors that gave the management team some challenges that maybe we won’t have in the future to deal with."

I wonder if one of those factors is moving the bakery facilities to a right to work state.
Bushwhacker

Seattle, WA

#5 Mar 22, 2013
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.
non-starter

Saint Paul, MN

#6 Mar 22, 2013
Bushwhacker wrote:
BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.
As usual, a quick quote from an unattributed source, in this case likely a think progress blog. http://thinkprogress.org/economy/2012/11/16/1...

There, I posted your source for you. Notice, think progress says the unions don't shoulder the blame. Notice that those same unions refused a contract negotiated in bankruptcy court, causing the company to liquidate. I guess the unions do shoulder the blame for the sale of Hosetess' assets to the highest bidder, at least the bakers' union.
Bushwhacker

Seattle, WA

#7 Mar 22, 2013
I guess the unions do shoulder the blame for the sale of{{{{{ Hosetess'}}}}

Sure, tell me what the SMURT contingent "thinks" !!! LMAOROFU~! Explain managerial raises, too.

Bushwhacker

Seattle, WA

#8 Mar 22, 2013
Triple the CEO’s Salary, then Blame Lack of Profits on the Union

Hostess Twinkies’ former CEO tripled his salary earlier this year to $2.55 million while the company knew it was heading towards bankruptcy, according to a statement by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

And a number of top executives reportedly saw massive pay raises, some nearly doubling their salary. And now the new CEO is blaming the unions for the company’s demise.

Ah, another CEO who courageously blames the union for his company’s failure, while omitting the part about the company tripling his immediate predecessor’s pay, and reportedly doubling the salaries of other top executives, while knowing that the company was on life support. Damn unions, indeed.

Is this what they teach in business school these days? As popular as “peer group compensation benchmarking” is in the corporate world, there’s a distinct lack of evidence that higher compensation delivers results.(Case in point: Hostess. Second case in point: Wall Street.)
DSM Local

Ankeny, IA

#9 Mar 22, 2013
non-starter wrote:
From the article above, "I don’t know necessarily that it was mismanaged. I can’t say that it was. I think there were some outside factors that gave the management team some challenges that maybe we won’t have in the future to deal with."
I wonder if one of those factors is moving the bakery facilities to a right to work state.
You can forget Minnesota then, no company wants to move there
non-starter

Saint Paul, MN

#10 Mar 22, 2013
Did union workers simply get their 'Just Desserts' for backing Hostess into a corner with too many unreasonable demands? Consider the evidence.

Union workers have now completed their mission. 18,500 jobs are gone forever.

The national labor bosses stood firm. Labor leaders are proud they stood up to those nasty ‘suits’[see Entourage for definition] who refused to run a money-losing business simply to continue paying salaries and benefits.

Hostess posted a $341 million loss in 2011 on revenues of about $2.5 billion. Contributing to those 2011 losses:
$52 million in Workers’ Comp Claims
Dealing with 372 Distinct Collective-Bargaining Contracts
Administration of 80 Separate Health and Benefits Plans
Funding and Tending to 40 Discrete Pension Plans
$31 million in year-over-year increases in wages and health care benefits for 2012 v. 2011

Uncounted in the above numbers were the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:
No truck could carry both bread and snacks even when going to the same location
Drivers were not permitted to load their own trucks
Workers who loaded bread were not allowed to also load snacks
Bringing products from back rooms to shelves required another set of union employees
Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all

America has come to this. The only defense against insane union demands is the willingness to walk away and close shop.
PHD2

Minneapolis, MN

#11 Mar 22, 2013
This product line will surly fail.

NYC will ban their sales for sure and the rest of the country will follow NYs lead ad ban these evil products that cause obesity.

Maybe these products could be exported to Communist nations where there is freedom to consume whatever they choose.
Bushwhacker

Seattle, WA

#12 Mar 22, 2013
Triple the CEO’s Salary, then Blame Lack of Profits on the Union

Hostess Twinkies’ former CEO tripled his salary earlier this year to $2.55 million while the company knew it was heading towards bankruptcy, according to a statement by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

And a number of top executives reportedly saw massive pay raises, some nearly doubling their salary. And now the new CEO is blaming the unions for the company’s demise.

Ah, another CEO who courageously blames the union for his company’s failure, while omitting the part about the company tripling his immediate predecessor’s pay, and reportedly doubling the salaries of other top executives, while knowing that the company was on life support. Damn unions, indeed.

Is this what they teach in business school these days? As popular as “peer group compensation benchmarking” is in the corporate world, there’s a distinct lack of evidence that higher compensation delivers results.(Case in point: Hostess. Second case in point: Wall Street.)
[Could you pass a US citizenship test?]
Bushwhacker

Seattle, WA

#13 Mar 22, 2013
non-starter wrote:
Did union workers simply get their 'Just Desserts' for backing Hostess into a corner with too many unreasonable demands? Consider the evidence.
Union workers have now completed their mission. 18,500 jobs are gone forever.
The national labor bosses stood firm. Labor leaders are proud they stood up to those nasty ‘suits’[see Entourage for definition] who refused to run a money-losing business simply to continue paying salaries and benefits.
Hostess posted a $341 million loss in 2011 on revenues of about $2.5 billion. Contributing to those 2011 losses:
$52 million in Workers’ Comp Claims
Dealing with 372 Distinct Collective-Bargaining Contracts
Administration of 80 Separate Health and Benefits Plans
Funding and Tending to 40 Discrete Pension Plans
$31 million in year-over-year increases in wages and health care benefits for 2012 v. 2011
Uncounted in the above numbers were the outrageous union-imposed rules that made for a too-high-to-bear cost of sales:
No truck could carry both bread and snacks even when going to the same location
Drivers were not permitted to load their own trucks
Workers who loaded bread were not allowed to also load snacks
Bringing products from back rooms to shelves required another set of union employees
Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all
America has come to this. The only defense against insane union demands is the willingness to walk away and close shop.
Funny, you cite worker's comp claims ??? Would you prefer shooting injured on the job Americans ????
Bushwhacker

Seattle, WA

#14 Mar 22, 2013
Funding and Tending to 40 Discrete Pension Plans ??

When they failed to FUND THEM ????

Since: Sep 11

Rogers, MN

#15 Mar 22, 2013
non-starter wrote:
<quoted text>As usual, a quick quote from an unattributed source, in this case likely a think progress blog. http://thinkprogress.org/economy/2012/11/16/1...
There, I posted your source for you. Notice, think progress says the unions don't shoulder the blame. Notice that those same unions refused a contract negotiated in bankruptcy court, causing the company to liquidate. I guess the unions do shoulder the blame for the sale of Hosetess' assets to the highest bidder, at least the bakers' union.
Yeah! Good thing those 5600 bakers stood up to the evil management and cost 18,000 people their livelihoods. That'll learn 'em.

Since: Sep 11

Rogers, MN

#16 Mar 22, 2013
PHD2 wrote:
This product line will surly fail.
NYC will ban their sales for sure and the rest of the country will follow NYs lead ad ban these evil products that cause obesity.
Maybe these products could be exported to Communist nations where there is freedom to consume whatever they choose.
Twinkies and Ho Ho's don't make people fat. People make people fat.
Bushwhacker

Seattle, WA

#18 Mar 22, 2013
Funny, a poor product choice is MANAGEMENT, right ???
Bushwhacker

Seattle, WA

#19 Mar 22, 2013
Sure, work without promised pay, RIGHT ??

Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers' pension money for other company uses.

The bankrupt baker told The Wall Street Journal that money taken out of workers' paychecks, intended for their retirement funds, was used for company operations instead.

STEALING WORKERS PAY ?????
non-starter

Saint Paul, MN

#20 Mar 22, 2013
Bushwhacker wrote:
Funny, a poor product choice is MANAGEMENT, right ???
Hostess' union rules:

No truck could carry both bread and snacks even when going to the same location
Drivers were not permitted to load their own trucks
Workers who loaded bread were not allowed to also load snacks
Bringing products from back rooms to shelves required another set of union employees
Multi-Employer pension obligations made Hostess liable for other, previously bankrupted, retirement plan contributions from employees that never worked for Hostess at all

Prior Hostess' brands, manufacturing coming soon to a right to work state near you.
Bushwhacker

Seattle, WA

#21 Mar 22, 2013
So, you've quoted rules a couple times. No explanation if they were company efficiency rules??? Of course not... LMAOROFU~!
Funny, THEY STOLE WORKERS PAY & PENSIONS !!!

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