Hostess is filing for bankruptcy and going out of business. There will be no more Twinkies. I know this news is over a week old now. I am behind.
My first thought when hearing the news was, “No Twinkies! No Cupcakes! No Ding Dongs! Ahhhhhhhhhh!” I absolutely love all of those. My daughter was distraught because the mini-donuts are a staple for our family as we travel on vacation.
I will miss those snacks. I’m sure someone will buy the rights to the recipes and the brand names. All will be good probably sometime next year.
My second thought was, “That company must have been horribly mismanaged!”
The Hostess brand of snacks were consistently much more expensive in the grocery store than comparable snacks. Yet, people bought them up…me included. Every time I went to the cash register to pay for some Twinkies I thought, “Wow! They have got to be making a ton of money.” Then to find out they aren’t. What a shame!
With the brand recognition and the price they charged, how could you not make money. I was going to dig into it a little bit but before I could I read Anatomy of a Twinkie by Bill Waddell over on Evolving Excellence. It was a great post and answered a lot of questions.
From the post:
- 57% of their costs: Administrative, Overhead, Selling, Distribution, Depreciation, Other
- 28% of their costs: Ingredients, Packaging
- 15% of their costs: Factory Labor
I think that answers all the questions about mismanagement. It is a shame. Cut out the waste and leave what only adds value for the consumer and I bet they would have made a ton of money. I bet whoever buys the recipes will be more efficient and make a great profit from Hostess’ demise.