Attending first grade at Park School in Moorhead, Minnesota, I walked to school. My parents gave me an allowance of $.50 a week to buy snacks at the tiny store across the street from school. The snacks I favored cost $.10 a piece but for Hostess CupCakes and Twinkies, which threw my budget off. They cost $.12 for a package of two. The store owner had to help me figure how to pay it with the change I had in my pocket. I couldn’t yet figure $.12 in change.
Reading the the Wall Street Journal’s saga of the Twinkie this past weekend — “Why the Twinkie is now worth billions” (behind the Journal’s paywall) — I see a package of Twinkies now costs something like $3.50. Bidenomics is not helping.
I found the Journal’s story on the sale of Hostess to J.M Smucker for $4.6 billion to be intensely interesting, funny, and even inspiring. Full of twists and turns, the saga could make for a year-long business school course if not the premise of a television series. It reminded me of Samuel Johnson’s declaration in Boswell’s Life: “We are not here to sell a parcel of boilers and vats, but the potentiality of growing rich beyond the dreams of avarice.”
Among the keys to the thriving of the Twinkie are increased shelf life and distribution. It turns out the two are related.
Reporters Jesse Newman and Ben Cohen frame the Hostess story this way:
The sale of Ding Dongs, CupCakes and Donettes at a mouthwatering price was made possible by America’s love affair with snacks, which began long ago and intensified during the Covid-19 pandemic. It is the latest twist in a saga for a company whose most iconic [Ed.: cliché alert] product was developed during the Great Depression, tweaked during World War II and made to last on shelves more than twice as long in the past decade. And it highlights the one thing that anyone who has tasted a Twinkie intuitively understands: There has rarely been a bad time to bet on the American sweet tooth.
Hostess’s journey from near death—twice—to the subject of a frenzied bidding war has played out as the nation’s food giants scramble to appeal to consumers after raising prices on nearly everything they sell at grocery stores. Some are embracing their junk-food roots, while quietly working to make their products a little less bad for you. Others are trying to push deeper into the snack market.
America’s longstanding obsession with snacks is colliding with its exuberance for new weight-loss drugs that can suppress users’ appetites.
Among the surprises is the identification of Hostess’s top seller: Donettes.
Donettes? What the heck are Donettes?
Of course, the story isn’t over yet. For better or worse, Smucker will write another chapter or two. The Hostess deal has taken a bite out of Smucker’s stock. Nevertheless, the Twinkie persists.
Quotable quote: “Twinkies, Hostess wants consumers to know, are ‘better than you think.’”
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