Meridian Star

Local News

November 18, 2012

Hostess closure prompts Run on Twinkies

Meridian Wonder Hostess Bakery Outlet to close

MERIDIAN —     Meridian resident Derek Swanner scoured area stores Saturday in search of Twinkies following the Friday announcement that Hostess Brands, Inc., will shutter its doors.

    "I've been trying to find some," Swanner said of the spongy snacks with a creamy filling. "It seems that they have sold out everywhere."

    The company filed a motion to liquidate Friday with U.S. Bankruptcy Court. The shuttering means the loss of about 18,500 jobs nationwide. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.        

    The news prompted a run on stores all across the country, including at the Wonder Hostess Bakery Outlet on 49th Avenue in Meridian.

    By 10 a.m. Saturday, the store had sold out of Twinkies, Ding Dongs and Ho Hos.

    Twinkies were the first to go, followed by cream-filled chocolate cupcakes, said Cheryl Lewis, lead clerk at Meridian store. Some residents were buying the treats by the box.

    The store will close as soon as the inventory is sold. Lewis, who has worked at the store for eight years, will lose her job, as will two delivery drivers.

    The company, whose roster of brands dates back as far as 1888, has been struggling.     

    CEO Gregory Rayburn, who was hired as a restructuring expert, said Friday that sales volume was flat to slightly down in recent years. He said the company booked about $2.5 billion in revenue a year, with Twinkies alone generating $68 million so far this year.

    In January, the company filed for Chapter 11 bankruptcy protection for the second time in less than a decade. Its predecessor company, Interstate Bakeries, filed for bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.

    Hostess, based in Irving, Texas, said it was saddled with costs related to its unionized workforce. The company had been contributing $100 million a year in pension costs for workers; the new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.

    Management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling. Although some of those executives later agree to reduced salaries, others — including former CEO Brian Driscoll — had left the company by the time the pay hikes came to light.

    Then, last week, thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.

    Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.

    Lewis said she wasn't particularly surprised when she learned of the company's decision to close.

    "I kind of knew if they didn't come off strike it would happen," Lewis said.

    The Meridian store, which offers discount prices on snacks and breads, will be missed by many residents who shop there regularly to save on their grocery bills, Lewis said.

    Janet Barham said she stops by each week to purchase items for her church's Sunday morning coffee.

    "I love this store," said Barham, who was saddened to hear that employees will lose their jobs. "That hurts your heart."

    Just as unsettling, said store customers who grew up eating Hostess snacks, is the idea that the brand may no longer be available.

    "Twinkies have been here forever," customer Mary Coleman said. "My grandkids love them."

    Swanner agreed.

    "It's just terrible," Swanner said.

AP reporters Candice Choi, Stephen Singer and Ashley Heher contributed to this report.

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