Brand Autopsy: Hostess, Maker of Twinkies | Business 2 Community

This is kind of embarrassing: when I read about Hostess going bankrupt on Friday afternoon, I wasn?t more than four or five sentences into the story until I skipped over to Amazon to check on stock. I?m not a Twinkies fan, but I wouldn?t mind selling them on eBay. Sure enough, just about everything was bought up except for some lone 8-pack Cherry Fruit Pies.

My loss. Much more importantly, Hostess?s ? and its 18,500 employees? ? loss. Earlier this year, in January, Hostess made its second trip to the bankruptcy courts (the company had already filed for Chapter 11 in 2004). But now, bankruptcy is here to stay.

The Final Straw (and Twinkie)

Executive leadership is blaming the on-going baker?s union strike as the straw that broke the camel?s back on Thursday night. Union workers held out against Hostess?s demands, which are summarized as:

• 8% cut in pay
• 20% increase in healthcare costs
• 10-12 plant closures
• New pension and workday provisions

By no means a ?good deal? from the employee perspective. When union workers refused to acquiesce, Hostess announced that Twinkies baked on Thursday evening (November 15) would be the last they ever baked? at least until another company buys the brand later on down the road.

Why You Will Eat Twinkies Again

If just one more Twinkie is what you desire in life, then so it will be. While this closure is obviously upsetting to the market and the 18,500 employees who are affected, this story won?t be the last we ever hear about Twinkies.

As an iconic brand, Hostess has value. As a stubborn brand that has remained virtually unchanged since it was created in 1930, Hostess was doomed for a painful, bankrupt death. Though we don?t yet know the details of the Hostess financial situation, I have a sneaking suspicion that disillusioned management assumed they could continue on with the same product and the same marketing strategy and achieve the same past results.

As one Slate reader pointed out, like Kodak in the shift from film to digital, Hostess didn?t grab onto the next wave ? despite its long anticipated arrival. The wave I?m talking about? Increased health-consciousness.

From Michelle Obama?s (albeit unpopular) school lunch plan to Whole Foods? staggering growth, there?s little argument that healthy eating is at the forefront of many Americans? minds. Add to this trend the fact that the Twinkie is the scapegoat pointed to any time someone needs an example of unhealthy food, and it?s easy to see why Hostess?s general resistance to change put them on the road to bankruptcy.

Okay, but I said I think we all will be eating Twinkies again (Let me tag that with the phrase: ?should we so desire.?). Here?s why?

The Hostess Potential

Hostess has an enormous amount of clout in America and abroad. While the current fatty, nutrient-void versions of their top selling products aren?t likely to reclaim the success of decades past, all hope is not lost.

With the right kind of marketing and forward-thinking leadership, Hostess could be back in the snack food game. Here?s what I think the future owners of the company need to do:

• Reclaim the brand?s status as an iconic snack/dessert, drawing on vintage advertising campaigns of the past for inspiration.
• Emphasize products as special treat/dessert ? not snack fuel to be inhaled between truck stops.
• Focus on increasing health attributes while not compromising product appearance or taste.

With these branding strategies at play, the Twinkie doesn?t just have a chance of making a comeback; it could come back with a vengeance! (If you can say that about Twinkies.) Of course, better union relationships and new organizational/restructuring strategies need to be implemented, as well.

Lastly, I know you?re wondering how long a Twinkie will last as you fill up your pantry with the remaining stock. The answer is 25 days.

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What are your thoughts on the current Hostess bankruptcy and liquidation?

Source: http://www.business2community.com/branding/brand-autopsy-hostess-maker-of-twinkies-0336388

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