Dive Brief:
- Bill Toler is retiring as president and CEO of Hostess Brands effective March 1, 2018, or possibly sooner if a replacement can be found, according to a company statement. No reason was given for the move, although Toler said he plans to remain on the Hostess board of directors.
- Toler, the former CEO and president of AdvancePierre Foods and former president of Pinnacle Foods, was appointed to the top spot at Hostess in May 2014.
- Dean Metropoulos, executive chairman of the Hostess board, said in a statement, “Under Bill’s leadership, the Company successfully re-established the iconic Hostess brand as a leader within the sweet baked goods category and transitioned from a private to public company. Bill has led Hostess through a considerable growth phase and has generated significant stockholder value.”
Dive Insight:
Toler's leadership helped reposition the well-known maker of Ding Dongs, Ho Hos and Twinkies after it emerged from liquidation in 2013 through a private-equity purchase and a return to the stock market last fall. He has overseen increases in Hostess sales and profits, expanded its distribution network and pioneered new innovations such as Twinkie-flavored ice cream.
Just this year, the company’s innovations have included cinnamon sugar crunch Donettes, white fudge Ding Dongs, chocolate peanut butter Twinkies, chocolate cake Twinkies, Golden CupCakes and peanut butter Ho Hos. The company has also introduced or announced plans for a Twinkies Cappuccino for the convenience store channel, a line of collaborative ice cream products under Hostess brands and Deep Fried Twinkies found exclusively at Wal-Mart.
Hostess has had to contend with significant challenges in the sweet baked goods sector as consumers turn away from less-healthy snacks and head for more good-for-you offerings. At the same time, millennials and others are embracing an indulgence trend, which is an area where Hostess clearly shines.
It's uncertain whether his departure will hurt the company long-term, much of that depends on who is picked to replace him and when. As an indication of Toler's leadership profile, Hostess' stock dropped about 10% on Friday, one day after the retirement announcement. The company's statement noted that a subcommittee of the board of directors will be identifying and evaluating both internal and external candidates to replace Toler, with the assistance of an executive search firm.
Even though Toler will be leaving the top post, he plans to remain on the Hostess board of directors, which could allow him to continue contributing insight to the company on its product development and other business decisions.
Toler's departure is the latest departure for a CEO from a major food company. In just the last year, Hershey, General Mills, Tyson Foods, Coca-Cola, Kellogg and Mondelez have been among the companies to appoint new leaders as consumers turn to more organic, healthier and natural products.
The most recent earnings report showed sales were up in the second quarter to $28.2 million, which were below expectations, but exceeded the $21.9 million in sales reported for the same quarter of 2016. Hostess also saw revenue rise 5.6% to $203.2 million, compared to $192.3 million in the year-ago period, driven by new product offerings. Market share was reportedly up 120 basis points in the second quarter from a year earlier, more than double the company's goal.