Hostess Brands’ announcement that it is going out of business has spurred a rush for Twinkies. Stores around the nation are reporting customers buying boxes of the iconic “Golden Sponge Cake with Creamy Filling” by the armful and that prices on eBay have skyrocketed.
Hostess, which also makes Wonder Bread and other baked goods, said it was shutting down today because the company lacks the finances to weather an extended nationwide strike by workers. The strikes began a week ago after Hostess imposed a contract cutting workers’ wages by 8 percent. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union said the contract also cut benefits by 27 percent to 32 percent.
CEO Gregory Rayburn issued a statement saying, “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
News of the closing spread rapidly across the Internet and other media. It has clearly struck a nerve with consumers who got up early to buy the snack cakes while they can. A Chicago-area convenience store sold out of Twinkies by 9 a.m. this morning, according to wire reports. Stores from Manhattan to California have also reported being hit by Twinkie runs.
On eBay, one person put a $250,000 price tag on a box of 10 Twinkies. Less ironic sellers were asking $8 to $60. Individual two-packs were going for $5 and up.
The shortage has even made its way into politics — jokingly. Rotund New Jersey Gov. Chris Christie started a press conference Friday afternoon by saying, “I am not answering questions on Twinkies.”
Even amid such Twinkie-mania, the snack food is unlikely to be out of production for long.
Although the company has pinned the blame for its liquidation on striking workers, Hostess has been in financial distress for years. Hostess filed for bankruptcy in January, its second trip through court supervision since 2004. The company also has changed hands several times and is now owned by a group of investment firms, including hedge funds Silver Point Capital and Monarch Alternative Capital.
Hostess’ primary assets are its brands, which also include Drake’s Devil Dogs, Wonder Bread, Ding Dongs and Ho-Hos. They may be of interest to many companies because of their popularity with consumers. One company often cited as a possible buyer is Mexican food conglomerate Grupo Bimbo. (CBS News)