Look at the Hostess Company and the problems that must likely lead them to filing bankruptcy. Hostess Brand formerly known as Interstate Corporation was founded by Ralph L. Nafziger in 1930. Hostess is know in all neighborhoods throughout the United States for their tasty treats that included Fruit Pies, Twinkies, Suzie Qs, Ho-HOs just to name a few. Hostess had over thirty nine bakeries and employed around 18,500 (Bloomberg.com, 2012). Hostess sales were generated largely through sales in supermarkets and convenience stores throughout the United States. With the sluggish economy and the rising of product cost along with competition of other companies that made similar snacks, and let us not forget the healthy epidemic with children in the United States dealing with obesity and sweet treat was the last thing a mother or father would be thinking about buying their child. Hostess was no stranger to filing bankruptcy. They had filed chapter 11 bankruptcy protection in September 2004 and emerged as private company in February 2009 (PrivCo, 2012). In 2012, facing hardship the attempted to file chapter 11 to reorganize and negotiate with employees and union but no negotiation met. Hostess then ask the presiding judge over the bankruptcy to convert them to chapter seven and all doors were closed and bankruptcy trustee moved forward and disperse proceeds to creditors.
Research Questions
What made Hostess so successful?
Was the decline in the demand for their branded sweet goods and bread products due to competition?
Is American getting away from the sweet good and going toward nutritional snack being the reason for low demand?
What drove Hostess Company with so much longevity behind them to Bankruptcy? Was it the union the blame?
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