“Somebody’s going to make Twinkies — that’s not a concern,” said a person close to the negotiations, who spoke on the condition of anonymity because the talks are ongoing. “The question is who and how.”
A winner could be announced as soon as next week, although the process could drag on in bankruptcy court in New York much longer.
Separately, Hostess is also selling off its bread business, including Nature’s Pride and Wonder, which attracted 13 bidders.
Hostess Brands announced Nov. 16 that it would wind down its operations, closing 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
More than 18,000 people lost their jobs.
Amid those losses, the announcement set off a wave of nostalgia for the tubular yellow cake treats. The sales of Twinkies spiked as consumers emptied shelves, the media chronicled the snack’s role in American culture since its introduction during the Depression and scavengers sought to sell them for hundreds of dollars on eBay.
Reportedly among the leading bidders for the Hostess cake business is C. Dean Metropoulos, a private equity firm that owns Pabst Blue Ribbon.
The cake business — which also includes Donettes, Ding Dongs and Ho Ho’s — had nearly $1 billion in sales last year, according to figures from SymphonyIRI Infoscan, which does not include sales at Wal-Marts.
Although Twinkies have dominated coverage of the company’s demise, Hostess actually sold many more doughnuts and cupcakes. Twinkies sales amounted to $73.7 million, according to the figures.
Regardless, those popular brands, freed from debt and union contracts through the bankruptcy process, are likely to prove an attractive purchase for investors, analysts said.
The bakeries where the cakes are made are likely to be acquired by the bidders, a source said, because there is a shortage of such facilities. Twinkies were baked at Hostess plants in Columbus, Ga.; Emporia, Kan.; Ogden, Utah; Schiller Park, Ill.; Seattle; and Wayne, N.J.
But the return of Twinkies and other brands does not mean the company’s former employees will regain their jobs.
Hostess’s bankruptcy was precipitated, according to the company, by the union refusing wage and benefit concessions that management had demanded. However, a union representative said this week that for any of the bidders, the former workers offer the best chance of restarting operations swiftly.
“The Bakers look forward to the next phase for these iconic brands that past generations have grown up with — as a fourth generation baker, believe me I know,” David Durkee, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement. “While we don’t know what the outcome will be of either the auction process or who will be hired to work in the plants, what we do know is that our members provide new owners the best chance of success in a seamless revival of operations.”