As more than 50 million Twinkies start making their way to stores next week, the first order of business for the 83-year-old brand's new owner is to let customers know a classic is back. But behind the return of the familiar cream-filled sponge cake is a leaner operation, free of the union labor and the $1.3 billion in debt that saddled the brand's previous owners. With that clean slate, the new owner and chief executive, C. Dean Metropoulos, plans to launch into an ambitious growth plan and avoid the problems that led to two Chapter 11 bankruptcies, the last of which ended in liquidation.
... The previous distribution system involved roughly 6,000 drivers—all with union wages and pension benefits— delivering products to stores and placing them on shelves. The old Hostess distribution was governed by complicated work rules that required drivers to deliver bread and cakes on separate trucks, adding costs. Those delivery routes also reached only 50,000 of the country's roughly 150,000 convenience stores, and left some pockets around the country entirely without Twinkies.Comment: Free from:
- Union rules
- Inefficient plants
- Excess capacity: 11 factories at 50% capacity to 4 factories at 90% capacity