Business Strategies / Capital Spending / Industry News

Hostess May Expand to the Bread Aisle

By Lauren R. Hartman, Product Development Editor

Sep 21, 2015

Hostess may be moving beyond Twinkies with a new bakery item that could take it far beyond snack cakes. The maker of Twinkies and Ho Hos is adding bread and buns to its lineup, aiming to provide one-stop shopping for the convenience stores and dollar outlets that stock its products, reports The Wall Street Journal, though Hostess isn't discussing the new product line.

The move into yeast-based products might confuse some consumers who thought Hostess already made bread, given that prior to its liquidation two years ago, Hostess owned Wonder Bread, a brand that was synonomous in the U.S. from the mid-20th century with sliced bread. But in the liquidation Wonder Bread was bought by Flowers Foods.

Surveys conducted by the company indicate that consumers believed a Hostess-branded bread was already on the shelves. Hostess CEO Bill Toler told The WSJ that stores were also interested in buying both bread and baked goods from one source. "Anytime you can walk into a huge category with a new brand, it's a huge opportunity," Toler says.

After being purchased by two private equity firms in 2013, the company brought back its snack cakes, streamlining production and cutting costs so that sales are now near their pre-liquidation level of $1.3 billion, according to The WSJ.

Will the Hostess bread resemble soft, white Wonder Bread, which became a household brand in the mid-20th century? I remains to be seen what kind of product Hostess' new bread will be like and whether it can appeal to America's changing tastes. Hostess reportedly hasn't responded to questions about the types of bread it will be selling, or the retail price. But the company is said to be thinking about adding other new baked goods, including brownies, according to The WSJ. "There are things we can keep doing with this business. There also are questions around cookies, but we don't want to go too far afield," he added.