Dive Brief:
- Hostess Brands said Andrew “Andy” Callahan will become CEO on May 7. Executive Chairman C. Dean Metropoulos had been in the role on an interim basis since March 31 after Bill Toler, who helped the snack maker prosper after it emerged from bankruptcy five years ago, retired.
- Callahan joins Hostess with more than 23 years of executive leadership experience at consumer packaged goods companies including Tyson Foods, Hillshire Brands, Sara Lee and Kraft Foods.
- Callahan "is a very accomplished consumer packaged goods executive with strong experience in leading brands and we welcome his leadership, brand and innovation expertise as we continue to further build our distribution and market share in the sweet baked goods category," Metropoulos said in a statement.
Dive Insight:
Few iconic American companies have been brought back from near death to not only live but thrive like Hostess Brands. Saddled by nearly $1 billion in debt, labor union disagreements and an inefficient product distribution network, the company filed for bankruptcy in 2012, its second time through the restructuring process. But it emerged a year later as a slimmed-down company focusing on its line of sweet treats, lead by the Twinkie.
Since then, the company has doubled-down on sugar-laced snacks while many of its competitors have moved away from the sweetener in favor of healthier, better-for-you fare. In the last few years, the company 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. So far, it appears to be paying off. Sales have risen 40% since Hostess' 2014 fiscal year to $776.2 million in 2017.
Now with Callahan taking the helm, Hostess will be looking to further extend its reach in a snacking space that is growing in popularity with consumers. The company had a tough job replacing Toler who was well-respected for placing the company on firmer ground while boosting its product line after it emerged from bankruptcy. Toler also oversaw its purchase of Superior Cake Products, a manufacturer of premium baked goods sold through in-store bakeries at retailers, that is a fast-growing segment.
In naming Callahan, Hostess appears to be picking an individual who will be perfectly suited to help it navigate changing consumer tastes and continue to strengthen its lineup of brands. He has spent nearly a quarter-century working in the packaged-food space, and while he may not have devoted much attention to sweets, his knowledge of how to build retail brands in the consumer space will help him at Hostess. Callahan previously served as Tyson Foods’ president of retail packaged brands, managing iconic products such as Jimmy Dean, Hillshire Farm, Sara Lee and Ball Park.
In a statement, Callahan said he looked forward to helping "realize the growth potential" of Hostess. For a company whose survival was once murky at best, it now appears Hostess has a promising future ahead. Still, as Callahan no doubt knows from his time in consumer goods, past wins in food are no guarantee of future success, especially in today's climate of rapidly shifting consumer tastes and opinions.
His most likely shot of realizing the "growth potential" he sees at Hostess is by further expanding its reach in premium products started by Toler, while maintaining its overall focus on baked goods and sugary snacks — which have been the company's sweet spot for much of its history.