Are They Just Plain Stupid?

Hi Everyone,

There are times when you read something that just stops you in your tracks and makes you think twice. That happened to me a few weeks ago. Last November 21st, Hostess Brands Inc, which made the venerable, Twinkies, Ho, Ho's, Yodels, Devil Dogs, etc., etc. went out of business. They had filed for bankruptcy on 1/10/12, (again) and in 11/2012 employees nationwide went on strike. The company wide strike was essentially the nail in the coffin and Hostess closed its doors on 11/21/12 which meant the end of jobs for 18,500 employees. That's a lot of lost jobs for an American Institution which was founded in 1930.

Unfortunately, no company wanted to buy the Hostess Brand of products as a whole. But, not long ago two private equity firms decided to buy different parts of the once proud company. One of the private equity firms that wants to buy the Twinkies, Ho Ho's, Yodels and Devil Dogs etc. division, has decided that history should not be taken into account, when you hear about their plans. Remember about 20 years or so ago when Coke decided to stop production of their original coke and instead made "New Coke". That move went up like a lead balloon and after a huge consumer revolt, Coke ended new coke and went back to original coke. But Coke lost money and market share because of that stupid idea. History should be a great lesson to companies that want to change what they are best known for.

Well, well, well, this private equity firm wants to overhaul the Hostess Brands of products. How? In their infinite wisdom, they want to make their products more healthful. They say that the products should taste comparable, but there will be a difference. I guess using healthful ingredients will change the taste. But is it what they should be doing? I mean, everyone knows that Hostess snacks are not good for you, but we ate them anyway because of the way they tasted. If they change the products so much, it may also change the life expectancy of the products.

Back in 2002, in South Carolina, a house that had been vacant for 21 years was finally sold. The new owners had planned to tear down the house and build their dream house. After the closing, the new owners went for a final walk through, before the house was razed. When they walked down into the small dirt cellar, they found, much to their amazement, unopened boxes and boxes of Hostess Twinkies and Yodels etc. They opened the boxes and were absolutely shocked to find that the snacks looked to be still good. They took a few of the snacks to a lab that was able to determine that the snacks were in fact, still good?! How is that possible? I want to know if someone actually had to taste 20 something year old snacks?

If the ingredients are changed, will they still be able to last 20 something years? I guess it really doesn't matter since this is all an April fools joke and none of the above is true, except that there are really two private equity firms that really do want to buy parts of Hostess. Did I get you?

Anyway, Happy Easter, Passover and April fools!!!!

Til next week.

Peter