Wed January 11, 2012
Hostess, Maker Of Twinkies, Files For Chapter 11 Bankruptcy Protection
Twinkies maker Hostess Brands Inc., is again seeking protection from its creditors, filing for Chapter 11 bankruptcy as the company tries to cope with high debt and rising costs of labor and raw materials.
Hostess, which also makes Ho Hos, Sno Balls, and Wonder Bread, is a privately held company based in Irving, Tex. It owes millions to suppliers and labor unions. The company has reportedly found some financing to keep it running during bankruptcy proceedings.
For our Newscast desk, Larry Abramson reports:
"Hostess Brands filed for bankruptcy in 2004, reemerged in 2009, but has been struggling ever since. In this most recent filing, Hostess lists the Bakery and Confectionary Union Pension fund as its largest creditor, with a debt of $994 million. Hostess is also behind in payments to a long list of suppliers, such as Cargill."
And part of the problem is that sales of Twinkies are down.
"Nearly 36 million packages of Twinkies were sold in the year ended Dec. 25, down almost 2 percent from a year earlier, according to data from SymphonyIRI Group, a Chicago-based market-research firm," reports The Wall Street Journal.
The company, which has roots reaching back to 1930, has also suffered as consumers move away from white bread and toward more whole-grain breads.
And sales of Twinkies have suffered despite its prime product placement in the 2009 film Zombieland.
As Michael Graupmann writes over at CultureMap Austin:
"As for me and my house, we will be stockpiling all the Twinkies. Cuz you never know when the zombie apocalypse is gonna hit, and all you're going to want is a sweet, cream-filled treat with your friend — all of our friend, really — Twinkie the Kid, giving you that old familiar thumb's up."
The Twinkie's popular reputation as a snack cake that would never spoil led a science teacher in Maine to conduct a 30-year experiment to determine the cake's shelf life.
In 2005, that teacher, Roger Bennatti, spoke with Michele Norris of All Things Considered about the scientific process he used.
"I unwrapped the Twinkies, and I immediately ate one," he said. "And I simply placed the second Twinkie on top of the blackboard, and we began our experiment."
After 30 years, Bennatti said, the cake had resisted mold, and had dried out to an "off-yellow" color. He did not think it was a good idea to try a bite, however.