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Opening Arguments

Relax, junkies

I suspect this is right, so let's have no Twinkie panics, no Ding Dong withdrawal symptions, no Wonder Bread riots:

Hostess Brands, the maker of the iconic Twinkies snack cakes, may find a buyer when it heads to bankruptcy court today to liquidate the 82-year-old company, the company’s CEO says.

“I think we’ll find buyers,”  CEO Gregory F. Rayburn told ABC News on Sunday.  ”A few have surfaced already since Friday expressing interest in the brand to acquire them.”

Con Agra and Flowers Foods are among the companies that have expressed interest in Hostess, but Mexican company El Grupo Bimbo may have an edge, the Christian Science Monitor reported Saturday.  Grupo Bimbo, headed by Mexican billionaire Daniel Servitje Montull, is the largest bread-baking company in the world.

Twinkies will survive if, 1) some smart entrepreneur decides there is a market for them and, 2) believes there is a way to make a reasonable profit out of serving that market. The "reasonable profit" part is Economics 101 but apparently beyond the grasp of union members who struck themselves right out of a job. And if Twinkies do go away, that's OK, too. Ain't never gonna be a shortage of junk food to satisfy the most discerning palates.

Posted in: Current events

Comments

Harl Delos
Tue, 11/20/2012 - 12:00pm

It's not the bakers and drivers who struck themselves out of a job.  It's management.  The first thing a trustee will do is to fire the management.  Inevitably, someone will buy the brands, and it'll be bakery union works that bake the products, and teamsters who deliver them, but an acquiring company will prefer new managers to the ones that ran Hostess Brands into the ground.

Flower recently bought TastyKake, and their product quality has improved. Bimbo owns Entemann's, and they seem able to charge fairly outrageous prices, because nobody else competes with them, and customers can't go, ahem, a month without Entemann's. I don't know what Con Agra currentlybakes, but they seem to have revived the Eckrich brand somewhat after the Swift/Butterball people destroyed customer loyalty.

Eckrich kept trying to force wages down at the Osage street plant by moving profitable products to other factories, and moving less profitable products to Osage, but the union foiled them.  They insisted on following recipes exactly, and being scrupulously clean.  It might seem odd, but the last hot dog or slice of baloney tastes "off" as it ages, and Mom doesn't buy more baloney if there's baloney in the fridge that nobody eats.  Within months, sales of products moved to Osage usually started to boom, and sales of products moved to Eckrich's newer plants with younger, lower-paid workers, well, they started to fall off.

"WonderBread" was used as an insulting adjective in the 1960s, meaning boring and flavorless. You can get more flavor simply by using less yeast, and raising the bread longer. Twinkies were a lot tastier when  the filling was banana custard rather than the molten white styrofoam of recent decades.  Make a product that people really want, and you won't need to ask $16 bakers and $20 truck drivers to take a pay cut.

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