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Twinkies Return In Triumph, And Their New Distribution Model Favors Vending

Posted On: 7/21/2013

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TAGS: vending snacks, vending machine, vending business, Hostess Brands LLC, Twinkies, Apollo Global Management LLC, C. Dean Metropoulos & Co., Hostess bankruptcy, Ho Hos, Ding Dongs, Donettes

SCHILLER PARK, IL -- Twinkies and other iconic Hostess snack cakes officially returned to store shelves on July 15, and a new distribution model for the baked treats will pave the way for an unprecedented presence in vending machines.

Investment firms Metropoulos & Co. and Apollo Global Management LLC purchased the snack cake brands four months ago from bankrupt Hostess Brands. | SEE STORY

Under the company's new distribution model, Hostess products are delivered to retailers' warehouses rather than individual stores. The company said this will enable it to reach about 160,000 stores by the end of the year, including tens of thousands of vending machines, dollar stores, club stores and drugstores that were previously inaccessible. Hostess products are currently being produced in four bakeries.

"Our goal is as simple as it is ambitious: wherever consumers can buy a candy bar, they should be able to purchase a Twinkie," said Hostess Brands LLC chief executive Dean Metropoulos.

Approximately 100 million snack cakes, including Twinkies, CupCakes and Donettes, areset to hit store shelves over the first two weeks of the comeback, along with Zingers, HoHos, DingDongs, fruit pies and mini muffins. SnoBalls and SuzyQs will return in the next few months.

Hostess's new owners said they will have five times more Twinkies on the market during the first two weeks of their return than during the same two-week period last year, to satisfy ramped up demand.

"When Hostess products disappeared last year, there was an incredible groundswell of emotion from consumers who couldn't imagine a world without Hostess snack cakes," Metropoulos said. "That's why we're here today; America wanted its snacks back -- they wanted the original and we're honored to make that happen."

Retail customers representing more than 100,000 stores placed significant orders in advance of snack cakes' return, according to the company, and overall demand is several times greater than levels experienced in prior years.

The company said its bakeries have been running at capacity, but because of the extraordinary number of orders, it is possible that not all stores will have all products on shelves immediately.

"We are already hearing early reports of products flying out of stores almost as fast as they've appeared on shelves," said Rich Seban, president of Hostess Brands LLC. "As orders have continued to pour in, we are doing everything possible to fulfill them equally and timely for everyone."

Hostess's new owners have launched a multimillion dollar integrated marketing, advertising and public relations campaign with the "Sweetest Comeback in the History of Ever" tagline.

"This comeback has created a once-in-a-lifetime opportunity to leverage the nostalgic sentiment and, at the same time, reintroduce the Hostess brand with a bolder attitude and a more contemporary voice," said Daren Metropoulos, principal of Metropoulos & Co.

In connection with Twinkie's return, a Hostess food truck, along with Twinkie the Kid, visited New York City's Rockefeller Center to begin a coast-to-coast tour, with Twinkie giveaways, that will end in Los Angeles in August.

The company's new owners said they plan to invest approximately $100 million this year upgrading bakeries and facilities. In addition, plans are underway to open a fifth bakery next year, at a cost of $75 to $80 million.