Can Twinkies Outlive Hostess?

Just three years after coming out of Chapter 11 restructuring, Hostess Brands has again filed for bankruptcy.

Turns out the company, makers of the classic Twinkies and Ding Dongs, is over $900 million in debt, most of it tied to an expensive and bloated labor force. Hostess has up to 100,000 creditors, but the bulk of it involves labor unions and pension funds, meaning that it has to renegotiate contracts just to stay afloat.

“We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees,” said Brian J. Driscoll, the company’s president and chief executive. If that can’t happen, they will ask the bankruptcy court to squash any existing agreements.

Hostess said its return to bankruptcy would not disrupt the company’s sale of baked goods. “With generations of loyal consumers, numerous iconic products and a talented and experienced work force, Hostess Brands has tremendous inherent strengths to build upon,” Mr. Driscoll said, but not everyone is so sure. The company has 372 collective bargaining agreements with a dozen unions, and they’re on the hook for $103 million a year to employees’ pension funds. Meanwhile, there’s been a shift in recent years to healthier snacks. Its biggest rival, Grupo Bimbo, for example, is the owner of Nature’s Own (as well as Arnold, Thomas’s, Entenmann’s and Sara Lee and Flowers Foods).

Speaking of which, check out this Hostess ad from the 80′s (evidently there was a time when people would actually believe that processed food like this could pass a mother’s “tough standards”):

In any case, all of this is worrying fans of the Twinkie. Will it survive? Talk show host Wendy Williams, in fact, has started an online campaign to prevent its demise, calling it a “golden symbol of the American dream”. The irony in all this is that Twinkies have long been described as the snack that could survive a nuclear attack (and could sit in a store for 30 years). Evidently, that kind of resiliency is no match for today’s financial realities.

Here’s Wendy Williams’ impassioned plea:

What do you think? Are Twinkies worth the effort?