Or more to the point, what’s in a brand name? As a marketing experiment with real world consequences, we’re about to find out when Hostess Brands returns out of bankruptcy with a new owner in August 2013. When Hostess first closed their bakeries last November, connoisseurs of baked dessert goods unleashed much sound and fury at the thought of their beloved Hostess Twinkies going away forever. And as the bankruptcy hearings dragged on, the stores shelves filled the gap left in Hostess’ absence with breads and other treats. Consumers frantically went on eBay to find the last boxes of Twinkies and Ding Dongs, because Hostess so thoroughly owned the category that there were no direct equivalents available.
But nature abhors a vacuum, and now other companies have rushed to fill the gap, rapidly producing their own knock-offs of iconic Hostess items to occupy the spaces that were once filled by those well-known brand names. With shelves now filled with alternatives, Hostess has emerged from bankruptcy auction and plan on resuming production shortly:
Twinkies will hit store shelves nationally by late July, Michael Cramer, executive vice president of Hostess Brands LLC told NBC News on Thursday. “We expect to be making and selling in July,” he said. “Probably the later half of the month before the product hits the stores.”
All of the classic Hostess snack brands will return, some making their return in August and September. Hostess Donettes and some of the snack cakes will be among the first to return. And “Twinkies for sure,” Cramer said.
In November, all 36 Hostess Brands, Inc., plants shut down after an extended stand-off with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. That Hostess company has almost completely wound down its operations, selling its assets in pieces. The bulk of the Hostess Snacks brands the public knows best — Twinkies, Cup Cakes, Ho Hos, Zingers, Ding Dongs and Suzy Q’s — were purchased in April for $410 million by hedge funds Apollo Global Management and Metropoulos & Co.
And so we’ll now get to see in real time what exactly a brand name is worth. The usurper products will not willingly relinquish shelf space to Hostess, and the consumer will now have a choice for each item… in many cases a cheaper choice that tastes similar if not identical to the Twinkie/Ding Dong/Ho-Ho that abandoned them in their hour of need. Will consumers really pay more solely for a name? Or maybe Hostess will find that their comeback doesn’t taste quite so sweet after all.