Hostess Snacks Flying Off Shelves After Company Shuts Down
UPDATED: 11/16/2012 - 5:48 p.m.
CHICAGO (CBS) - Hostess, the maker of Twinkies, Ding Dongs and Wonder Bread, is going out of business, and customers have been rushing to local stores to grab their favorite fatty, sugary snacks before they're gone.
Hostess made the decision to shut down Friday morning, after failing to reach an agreement with striking workers. The Texas-based company said the nationwide worker strike crippled its ability to make and deliver its products at several locations.
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Hostess had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening.
Hostess bakeries in Illinois are located in Schiller Park, Hodgkins in the Chicago area and Peoria downstate, and the flagship Hostess product, the Twinkie, was invented by Schiller Park bakery manager James Dewar in 1930 under a precursor company, Continental Baking Co. Twinkies were originally banana-flavored until banana rationing during World War II prompted the company to switch to vanilla cream.
"It's kind of sad," Jose Garcia, a factory worker at the Hostess factory in Schiller Park, said on Friday. "We gave concessions and it hasn't been enough. So they continue to go after us."
He is one of about 300 Illinois workers who will lose their jobs.
CBS 2's Dorothy Tucker reports there has been a rush to local groceries, convenience stores and Hostess outlets to grab Twinkies, Ho Hos, Ding Dongs and other snacks before the last of them are sold.
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The days are numbered on an outlet store that's been in Burbank for more than 50 years. The constant ring of the cash register, long lines, and empty shelves were all signs the sale of Hostess products could soon end.
Store clerk Bonnie Malen said they planned to stay open "until we sell out of everything. Union guys said maybe about a week."
Shopper Lisa Smith said, to her, it's more than just a store closing, it means losing out on the chance to share a family tradition with her daughter.
"I grew up in Logan Square, and we would sit out in the back yard, and all the kids would be out there, and we'd be elbow-deep in chocolate and ice cream up to our ears," she said. "Ding Dongs, Ho Hos, everything; and all the Twinkies. She may never even have a Twinkie. You know, that's unfathomable to me. I can't even imagine that."
Like Smith, many Hostess customers said they're afraid they might never see another Twinkie.
Just in case Hostess snacks are gone for good, customers have been stocking up on everything.
"People are buying stuff that sits on the shelves, that doesn't normally get sold," Malen said. "Orange Cupcakes, they can sit here forever. They're all gone. … I think they're going to save it, and sell it on eBay or something, I don't know."
WBBM Newsradio's Lisa Fielding found some store shelves were empty of Twinkies, suggesting a run on the iconic snack treat. There were still Hostess Cupcakes, Zingers and other desserts available, however.
A shopper at a Chicago convenience store snatched up the last package of Twinkies on Friday morning.
Was she going to freeze it and save it or eat it right away?
"I might give this to my co-worker because she actually loves Twinkies," she said.
A company spokesperson said they're trying to sell the Hostess brand to another company, but industry experts said it would be a tough sale in a super-competitive snack market.
"There's been consolidation in the space already, it just all depends whether the right buyer steps up," Morningstar analyst Erin Lash said.
Hostess, based in Irving, Texas, had already reached a contract agreement with its largest union, the International Brotherhood of Teamsters. But thousands of members in its second biggest union went on strike late last week after rejecting a contract offer that cut wages and benefits in September. Officials for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union say the company stopped contributing to workers' pensions last year.
Hostess, a privately held company, filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade. The company cited increasing pension and medical costs for employees as one of the drivers behind its latest filing. Hostess has argued that workers must make concessions for it to exit bankruptcy and improve its financial position.
The company, founded in 1930, is fighting battles beyond labor costs, however. Competition is increasing in the snack space and Americans are increasingly conscious about healthy eating. Hostess also makes Dolly Madison, Drake's and Nature's Pride snacks.
