- Hostess and Nestle will release a line of collaborative ice cream products under Hostess brands, such as Twinkies, CupCakes and Sno Balls, Just-Food reported.
- The announcement comes just a few months after Hostess launched its first frozen product: ready-to-heat Deep Fried Twinkies.
- This is one of Hostess's first major partnership moves since private-equity firm Gores Group purchased a majority stake in the company, which was completed in November.
Both Hostess and Nestle aim to benefit from this partnership. However, their entirely different circumstances could lead them to profit in different ways.
The alliance could allow Hostess to expand its brands into new frozen categories. Ice cream has been a fast-growing category in recent years, thanks to new innovations and brands' use of better-for-you ingredients. This is a significant opportunity for Hostess to demonstrate its brands' wide range of capabilities in the indulgence space. Plus, Hostess has been posting significant growth since emerging from bankruptcy, and this type of innovation can maximize that growth potential.
On the other hand, Nestle is not having as easy of a time determining how to maintain top-line growth, and the company has continually missed its annual sales growth target in recent years. The target could simply be too ambitious for a company of its size, or Nestle may just need a fresh perspective and new way to reach consumers. Enter Hostess. By partnering with a hot, up-and-coming brand that also has legacy and a loyal following, Nestle could potentially profit simply by doing the legwork.