- Hostess Brands LLC, known best for its Twinkies and snack cakes brands, is looking to bread as one of its next categories for expansion.
- Over the summer, Hostess began selling its own brand of white and wheat bread, and it also began selling hamburger and hot dog buns to convenience, drug, and dollar stores, which already stocked other Hostess products.
- In 2013, private equity firms Metropoulos & Co. and Apollo Global Management LLC bought Hostess out of liquidation and were initially not interested in the bread category. At that time, they sold Hostess's bread products, which included Wonder Bread and Nature’s Pride, to Flowers Foods Inc. and other buyers.
Hostess's new business model, which employs warehouse shipping that combines bread orders with other Hostess products, works for convenience, drug, and dollar stores, rather than the direct-store delivery model, which is common for bread companies. "Because convenience stores and drugstores don’t sell a lot of bread, it’s hard for drivers to justify making frequent trips to every outlet to swap fresh loaves for stale ones," The Wall Street Journal reported.
Bread isn't the only category on Hostess's list. Brownies, which are surprisingly not already part of Hostess's lineup, is one, and cookies is another, though Hostess CEO Bill Toler told The Wall Street Journal, "We don’t want to go too far afield."
Many companies are looking to healthier foods when they plan expansions or revamps of their products, but Hostess doesn't share that mindset. While the company will release whole grain muffins this fall, even those come in flavors like chocolate chip and birthday cake. Hostess doesn't want to stray too far from its role as an indulgent treats provider, as Toler says consumers still want to eat treats.