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June 22,2018 Culture

What Happened to Hostess Twinkies?

What Happened to Hostess Twinkies?

Hostess

Hostess Brands, amongst different name variations, originated in 1919. Quickly, they had become a staple of American diets throughout the rest of the century. Bringing to the public Wonder Bread, Dolly Madison, and the jewel of the packaged dessert, the Twinkie. As a result, most houses and nearly every lunchbox in the 1970s contained a Hostess brand product. Yet, 30-years later their company is an apparition of the past.

Hostess was never able to effectively move into their second phase of the corporate lifecycle. Because they never introduced new products that would align with the changing customer base their game clock started counting down. As America became more health-conscious, Hostess products were targeted as a direct contributor to the obesity epidemic. Instead of introducing a new line of health-oriented snacks to combat this threat, Hostess maintained their posture of continuing to try to wring every dollar out of their historic products where they should have been focusing their efforts on their second life. This culture of maintenance over innovation was the first symptom of their eventual death.

Slow Death

By the time of their company demise, Hostess had over 18,500 employees, 600 distribution centers, and 36 bakeries. After navigating through a handful of bankruptcies, buyouts, and acquisitions the company had found themselves in a poor strategic position. Having 372 separate union contracts to adhere to and 5,500 overlapping delivery routes throughout the United States that were controlled by collective bargaining agreements handicapped Hostess. Consequently,  increasing costs in gasoline, flour, and sugar, depreciating equipment, and unmanageable pension plans compounded their issues.

Capitulation

In 2012, Hostess finally capitulated as their costs continued to overwhelm their revenue. While this is a specific example of a company faltering from a failure to innovate and reinvent themselves, it is more of a precursor to a multitude of organizations operating for the time being. This article will focus on the leadership contribution to facilitating innovation within an organization. A leadership skill of the future will be the ability to create an environment that actively encourages and enables innovative thought. As a result, this ability to facilitate creativity throughout the organization will prevent the next great corporate meltdown.

References

10 Companies That Failed to Innovate and What Happened to Them

Hostess brands inc.: A case study

Hostess Brands – The Sweet Taste Of Success, The Bitter Bite Of Failure

Let 9m Help You Create an Innovative Culture

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