The Montreal Gazette
Sat, 17 Nov 2012 00:00 UTC
Since Hostess Brands Inc. announced yesterday it plans to liquidate and sell its products until supplies are exhausted, Americans have been scooping up Twinkies to get a fix of their beloved snacks. Supermarkets are running out and fans are pushing up prices on eBay Inc.
Friday, shoppers emptied the shelves of Twinkies at a Jewel-Osco store in Chicago.
"We may have a few things left, but pretty much we're out of our Hostess stuff," Paul Knoblock, assistant store manager, said in a telephone interview.
The store was supposed to receive another Hostess delivery Saturday and he hadn't heard of it being cancelled, he said.
A 10-pack of Twinkies was available on eBay yesterday for $24.99 and four 10-packs were listed for $99.99 on the online retailer's website. Other Hostess products including Zingers, Coffee Cakes and Cup Cakes are for sale on eBay.
A 10-pack of Twinkies are listed for $3.29 on the Peapod website, a home-delivery grocery seller owned by Royal Ahold NV.
Hostess, which also makes Wonder Bread, Ding Dongs and Ho Hos, plans to fire more than 18,000 employees and liquidate assets after a nationwide strike by bakery workers crippled operations. The 82-year old maker of snack cakes was undone by the strike after changes in U.S. diets led to years of declining sales while ingredient and labour costs rose.
In an interview Friday with Betty Liu on In the Loop on Bloomberg Television, chief executive officer Gregory F. Rayburn said the company's brands may survive under a new owner.
"Hopefully, someone will buy the brands, and some of the brands can live on, but that's a pretty small consolation for people who are out of work," Rayburn said. The company's brand names include Dolly Madison, Drake's, Merita and Butternut.
Supervalu Inc., the third-largest U.S. grocery-store chain, said Friday that Twinkies sales had jumped.
"We are definitely seeing an increase in customers purchasing Hostess products and expect this will continue as news about the company spreads," Mike Siemienas, a spokesperson for Eden Prairie, Minnesota-based Supervalu, said in an interview. Hostess delivers its food directly to stores, so there is no inventory in Supervalu warehouses, he said.
"We will only have the products while supplies last," he said. All of the company's banners, which include Jewel-Osco, Albertsons and Shoppers, carry Hostess items, he said.
Supervalu has a network of about 2,400 traditional and discount food retail stores, according to a company filing.
On Nov. 15, searches for Hostess on Google were about 11 times higher than they were a week earlier, and searches for Twinkies were 17 times higher, according to data from Crystal Dahlen, a spokesperson for Google Inc.
"We're actually seeing a big jump in searches for both Hostess and Twinkies," she said yesterday in an email.
Keith Dailey, a spokesperson for Kroger Co., the largest U.S. grocery chain, said in an email that the company typically doesn't comment on vendor bankruptcies and he hasn't heard of an increase in Hostess sales.
"Of course it is still early," he said.
Source: Bloomberg News