In the lexicon of American food, few snacks are as iconic as the Twinkie. But increasingly, Hostess Brands, the maker of the 88-year old treat, is testing and marketing new flavors based off of the original cream-filled yellow sponge cake in a bid to keep the product fresh and top-of-mind with today's fickle consumers.
When Hostess was trying out new flavors a few years ago, focus groups requested chocolate and peanut butter. Taking that advice to heart, Hostess introduced the variety — a chocolate cake with a peanut butter filling — as a limited-time item last June. It proved so successful, the company kept it on store shelves permanently.
Its efforts to expand the brand's reach haven't stopped there. It's rolled out a variety of other new flavors of the sponge cake, including cotton candy, blue raspberry, strawberry cream and peppermint. The company also has extended the Twinkie's shelf life, enabling it to last longer on store shelves. It introduced a Deep Fried Twinkie, as well as a hot beverage and ice cream versions of the cream-filled treat.
“Snacking companies are under increased pressure to keep their portfolios relevant and fresh and timely," Burke Raines, chief marketing officer with Hostess Brands, told Food Dive. "There is more and more competition, and when I look across the total food landscape, the companies that are innovating are the ones that are winning."
With shoppers increasingly valuing portability and snacking, and younger audiences demanding a more adventurous array of flavors or value-adds in what they consume, taking a well-established, much-loved product like the Twinkie and introducing new varieties is a way to minimize risk while boosting sales in a competitive environment. From soda to candy to chips to cookies, nearly every product on the market has tapped into that strategy.
“For food companies that are in the snacks business ... I think snacking companies are under increased pressure to keep their portfolios relevant and fresh and timely. There is more and more competition, and when I look across the total food landscape, the companies that are innovating are the ones that are winning."
Chief marketing officer with Hostess Brands
General Mills features 13 different varieties of Cheerios available on its website — including the original, Apple Cinnamon, Ancient Grains, Protein Cinnamon Almond and Very Berry. Mars, the manufacturer of M&Ms, has nearly a dozen varieties of the candy listed, such as Almond, Dark Mint, Pretzel and Mega Chocolate.
Lays, which is sold by PepsiCo, has a staggering 45 different choices. These include flavors like Biscuits and Gravy and Kettle Cooked Jalapeno, as well as unique shapes such as a 3-D lattice pattern. Hershey has even repackaged its popular chocolate bar and Reese's Peanut Butter Cups into two sweet and salty portable snacking mixes. The Reese's mix includes the iconic candy, pretzels, popcorn and Reese's Pieces.
Tapping into brand equity
To be sure, the pressure to innovate and create products that not only hit the market but resonate with the consumer's pocketbook is immense. New food and beverage product introductions in retail outlets have trended up since 2009, with 21,435 items debuting in 2016 — the highest number in nearly a decade, according to data from the U.S. Agriculture Department's Economic Research Service.
With so many products making their way to the marketplace, failure is inevitable. Data analytics company Nielsen estimated in a 2014 study that only 15% of consumer packaged goods launched in the U.S. are still around two years later.
Jennifer Frazier, senior vice president of Nielsen's Innovation practice, told Food Dive that manufacturers are smart to take advantage of equity they have built up in a well-known brand to try and extend its reach.
But she warned that simply introducing new products without identifying whether they are needed and which ones are most likely to succeed in the market — both initially and long term — may result in "an enormous amount of time and resources" that would be better spent developing fewer items that are likely to be more successful. It also risks damaging the long-term health of the brand.
“The risk of moving into new categories with a strong brand (or increasing the rate of line extensions within a category) is that if you put a poor product in the marketplace or if the product isn’t meeting the consumer need — you risk damaging your equity, which can have huge consequences," Frazier said in an email.
Lester Wilson, a professor of food science and human nutrition at Iowa State University, said that as Big Food struggles with falling or stagnant sales, the pressure to find a way to grow intensifies. It's logical, he told Food Dive, to try new products closely related to one that has already performed well to try to increase market share.
These products "are all in the same family so people are more likely to try it," Wilson said. "You're trading on a known product."
More than a golden sponge cake
While many of Hostess' competitors have focused on overhauling their product lines with healthier fare, the maker of Ho Hos, Ding Dongs and other sweets has maintained its mission of selling indulgent items at supermarkets, convenience stores and vending machines.
After exiting bankruptcy five years ago, Hostess devoted much of its innovative prowess to expanding the core brands that have defined the sweets maker during its nearly 100-year old history — all with the goal of keeping them relevant despite rapidly evolving consumer preferences and trends.
So far, it appears to be paying off. Sales have risen 40% since Hostess' 2014 fiscal year to $776.2 million in 2017. For Twinkies, one of Hostess' top-selling products, sales alone surged 12.8% to $146.6 million during the latest 52-weeks ended February 24 — a sign innovation and nostalgia are successful in wooing shoppers.
With the original Twinkie responsible for about 60% of the sales under the brand's trademark, there is a risk that a new flavor attempt fails or something else happens that ends up irreparably hurting the franchise.
"If you do a lazy piece of innovation, it can do disproportionate harm back to your core products, " Raines said. "You can get into trouble if you are not zealously shepherding good ideas through the pipeline. ... That’s why we put so much work into prototypes, developments and consumer testing.”Young customers, most notably millennials, are "explorers" interested in products that are new, exciting and give them a reason to come back to a brand they grew up with, Raines noted.
'The center of gravity'
It's rare that products stand the test of time amid changing consumer tastes, flavor demands and new products launched to dethrone the popular market leader.
Hydrox, the sandwich cookie that debuted in 1908 — four years before the Oreo — was at one time the market leader before it ceded that position to the now iconic creme-filled indulgence. After years of watching Oreo dominate the space, Kellogg, the brand's former owner, eventually shuttered Hydrox in 2002. Leaf Brands purchased the Hydrox name and recipe and brought it back to consumers a few years ago.
Today, Oreo's reign in the cookie aisle shows no sign of abating. After introducing its first new variation — the lemon flavored Oreo in the 1920s — it expanded into new flavors, and now introduces eight to 10 seasonal and permanent ones each year. The iconic cookie has also taken on new formats, including Oreo Thins, minis and candy bars.
Each new flavor takes about 12 to 18 months to create, according to Mondelez International, which owns the Oreo brand. Prototypes are made by hand with every creme flavor tried on both chocolate and golden cookies. Once the right one is found, a batch is created in the company's bakery and subjected to taste tests.
Oreo has turned to limited-edition flavors as "a key driver for growth as they appeal to both our loyal consumers as well as newcomers."
Oreo brand manager in North America for Mondelēz International
Last year alone, Oreo introduced a limited-edition jelly donut flavor, a firework variety with popping candy mixed into the creme and a mystery flavor which invited consumers to guess what it was. (It was later announced as Fruity Pebbles.) As part of a social media campaign, Mondelez invited Oreo fans to suggest flavors, some of which the cookie maker produced and sent to them with a personalized note.
Oreo has turned to limited-edition flavors as "a key driver for growth as they appeal to both our loyal consumers as well as newcomers," Sheera Hopkins, Oreo brand manager in North America for Mondelez International, told Food Dive in an email.
For Mondelez, the Oreo flavor smorgasbord has enabled the company to gauge consumer preferences. Increasingly, the company is turning to the web for new ideas. Among some of the recent concoctions fans have submitted include avocado, cherry cola, chocolate-covered pretzel, glazed donut, kettle corn and nut n’ honey.
Hopkins said having a variety of cookies enable the company to attract snackers who like to try new things. But at the end of the day, it's the original that is responsible for the lion's share of the cookie's sales, she said.
"Our classic black and white cookie will always be the center of gravity for the Oreo master brand and is at the core of everything we do," said Hopkins.