Move over, Kodak — the Wall Street Journal is reporting that another iconic American brand is in trouble. As early as this week, Hostess Brands Inc. is "preparing to file for Chapter 11 bankruptcy protection ... a move that would mark the second significant court restructuring for the Twinkie and Wonder Bread baker in the past several years."
The ubiquitious Twinkies snack, introduced in 1930, are still popular, with 36 million packages sold last year. But that wasn't enough to save its parent company, which is deeply in debt (owing its creditors more than $860 million), and "has been facing a cash squeeze amid high labor costs and rising prices for sugar, flour and other ingredients... Those costs together have proved higher than the company's roughly $2.5 billion in annual sales, creating losses and cash shortfalls."
Hostess Brands, the WSJ's Shira Ovide notes, also makes "schoolyard favorites Ding Dongs, Ho Hos, Suzy Q’s, Fruit Pies, Sno Balls, Dolly Madison Zingers and Drake’s cakes." And while there's some debate about how long a Twinkie will last in the wild, the origin of their name isn't disputed, she adds:
James A. Dewar was a manager of a Chicago-area Continental Baking Co. plant in 1930, when he got the idea of injecting cakes with cream filing. He said he came up with the name for his invention when he saw a billboard in St. Louis for “Twinkle Toe Shoes.” Dewar started his career driving a horse-drawn pound cake wagon and retired in 1972 with the unofficial title of “Mr. Twinkie.” He died in 1985, at the age of 88.
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