Hostess Is Dead. Can the Twinkie Survive?

Agenda-Setting Financial Insight.
Nov. 16 2012 3:15 PM

Hostess Is Dead. Can the Twinkie Survive?

156458824
According to urban legend, the Twinkie can survive an atomic bomb. Can it also survive bankruptcy?

Photo by Scott Olson/Getty Images

Hostess Brands is dead, long live the Twinkie. The fluorescent yellow cream-filled cakes are a cultural touchstone for generations of Americans. As Hostess oozes through the bankruptcy process for the second time in three years, it is now opting for the nuclear option of liquidation. But the Twinkie brand’s half-life should be longer than its maker’s. 

The process of determining a brand’s worth is as gooey as the center of a Hostess Cupcake. But according to the marketing research firm Millward Brown, the value of the top 100 has surged by two-thirds since 2006, to $2.4 trillion. Apple’s name and icon, for example, are estimated at about $183 billion and Coca-Cola’s $74 billion. 

Advertisement

A Twinkie may have just as much sugar but it’s no Coke. Still, the spongy cake holds a place in the heart of ageing hipsters who won’t soon forget debates over whether it might survive an atom bomb. That novelty will count for something when Hostess puts Twinkie up for sale and rival snack makers like Kellogg or the Mexican Grupo Bimbo, owner of Sara Lee and Entenmann’s, have a think. 

Nostalgia has its limits on financial statements, though, as 82-year-old Hostess discovered all too well. Management renegotiated benefits with workers the last trip through bankruptcy, but they remained too generous to afford. Liquidation could make it easier for potential suitors to stock their shelves with Twinkies. The brand could easily replicate the product’s power to last.

Agnes T. Crane is a Reuters Breakingviews columnist, based in New York, where she covers capital markets and Latin America. She joined from Dow Jones Newswires, where she was an award-winning journalist who led a team of reporters covering the credit crisis.

TODAY IN SLATE

Politics

Meet the New Bosses

How the Republicans would run the Senate.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Photos of the Crowds That Took Over NYC for the People’s Climate March

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

I Wrote a Novel Envisioning a Nigerian Space Program. Then I Learned Nigeria Actually Has One.

A Futurama Writer on How the Vietnam War Shaped the Series

  News & Politics
Photography
Sept. 21 2014 11:34 PM People’s Climate March in Photos Hundreds of thousands of marchers took to the streets of NYC in the largest climate rally in history.
  Business
Business Insider
Sept. 22 2014 9:39 AM Adrian Peterson Has a Terrible Contract, and Cutting Him Would Save the Vikings a Lot of Money
  Life
The Eye
Sept. 22 2014 9:12 AM What Is This Singaporean Road Sign Trying to Tell Us?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Science
Sept. 22 2014 8:08 AM Slate Voice: “Why Is So Much Honey Clover Honey?” Mike Vuolo shares the story of your honey.
  Arts
Television
Sept. 21 2014 9:00 PM Attractive People Being Funny While Doing Amusing and Sometimes Romantic Things Don’t dismiss it. Friends was a truly great show.
  Technology
Future Tense
Sept. 22 2014 7:47 AM Predicting the Future for the U.S. Government The strange but satisfying work of creating the National Intelligence Council’s Global Trends report.
  Health & Science
Bad Astronomy
Sept. 22 2014 5:30 AM MAVEN Arrives at Mars
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.