Proving once more that Twinkies are indestructible, the brand was rescued from near-death on Wednesday when it was sold to private-equity firm Apollo Global Management and food company Metropoulos & Company. The sale caps a months-long ordeal for the classic snack, whose fate was thrust into limbo when parent company Hostess declared bankruptcy in late 2012.
Under the $410 million deal, Apollo and Metropoulos are also buying other signature Hostess brands, including Ding Dongs, Ho Hos, Sno Balls, and Dolly Madison Zingers.
Metropoulos is the owner of Pabst Blue Ribbon, a fact that has conjured up some unappetizing visions of the watery beer and cream-filled quasi-cakes being sold in combination. But in truth, Twinkies would have been hard pressed to find a better owner, since Metropoulos has a stellar record of using the nostalgic pull of old brands to make them popular once more. PBR, after all, has evolved from being the poster boy of cheap-o beers to an implausibly fashionable favorite among the hipster set.
Indeed, Metropoulos is already planning a similar rebranding campaign for Twinkies, write Michael J. De La Merced and Peter Lattman at The New York Times:
"There's a great consumer fan base that hasn't declined," Daren Metropoulos, one of Mr. Metropoulos' sons and an executive at the family firm, said in an interview. "We saw a real opportunity to revitalize these brands, just with some T.L.C."
That may come in the form of what the younger Mr. Metropoulos deemed "guerrilla marketing," much as his firm has done with Pabst Blue Ribbon. Social media like Twitter are expected to play a big role going forward, he said, and comedian friends like Zach Galifianakis may be drafted as spokesmen. (Will Ferrell, for instance, has starred in commercials for Old Milwaukee beer, part of the Pabst family.) [New York Times]
Twinkies are still a profitable product, banking $76.2 million in revenue in 2012. But profits have fallen in recent years, and Twinkies' popularity have been eclipsed within the Hostess family by CupCakes, which brought in $384.6 million last year.
The question, according to Jason Nolte at MSN Money, is will "all this Twinkie nostalgia die down once the snack cake and its convenience-store cohorts are saved?"
Metropolous and Apollo don't think so, and they should know. Both businesses stake large portions of their revenue on consumer nostalgia. While Metropolous' Pabst is a prime example, it has also pulled Chef Boyardee canned pasta dishes and Pam cooking spray out of consumer culture's reject pile. [MSN Money]