This episode is sponsored by Wren.
In 2012, a box of Twinkies sold for over $250,000.
But, it wasn't just because of its delicious cream filling.
You see, Twinkies were a godsend to Americans in the 1920s.
They saved people from a nuclear war.
Despite that, the history of Twinkies is far from being sweet.
<- introducing a second intrigue
The company would face many obstacles including: filing bankruptcy twice, employees
striking against them, and much more.
What happened to America's beloved sponge cake?
To answer that question, we'll have to take a trip back to Twinkie's
incredible history, starting in 1920..
The story of Twinkies begins with a man and a wagon.
James A.
Dewar was a wagon driver for the Continental Baking Company.
Every day, he’d drive his wagon, loaded down with strawberry
shortcakes, and make deliveries.
For a full decade, he kept up his work at the Continental Baking Company,
moving his way up through the ranks until he reached bakery plant manager.
But his big promotion came just as the Great Depression began.
And in his new position, James had a realization:
They were losing out on potential sales.
Every year, the plant’s machinery ground to a halt when strawberries
went out of season, and the expensive pans used to make shortcakes sat empty.
He then realized that if he replaced strawberries with a banana-cream filling, then
they could make shortcakes all year round.
So, he did exactly that.
The production lines roared back to life, making the new banana-filled shortcakes.
Their now-famous name came from a billboard.
While on a business trip, James passed by a billboard for “Twinkle Toe Shoes”,
a name he shortened to Twinkies.
James’ new product hit the market at a time when stores were boarding up nation-wide,
and families were losing everything.
As cannons boomed in Europe, America’s soldiers were stationed in Britain and
its fleets sailed across the Pacific.
America had officially entered the war.
Soon after, the U.S.
government began rationing a list of foods in short supply to ensure
everyone got their fair share.
Among the list was a key ingredient of Twinkies…
Bananas.
Without one of his key ingredients, James took a chance.
He replaced the banana-cream filling with vanilla cream instead.
It was a risky move, but it was his only choice.
And luckily for him, it paid off.
In fact, the new vanilla filling proved so popular that even when bananas were
available again, Twinkies never went back.
Having survived through the Great Depression and the war, Continental then set out to
make Twinkies a central part of American culture — beginning with pop-culture.
Continental cleverly partnered with one of the first children’s shows
on TV, and arguably the most popular of its time: “The Howdy Doody Show”
Not only did the show air ads for Twinkies, but the host, Buffalo Bob, encouraged
kids to ask their moms for the shortcakes.
Continental was on top of the world.
But like all things in life, what goes up eventually comes crashing down.
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The 1960s.
The world hangs in the balance of the Cold War.
Nations are torn between the Soviet Union and the United States: East vs. West.
And every day, the threat of nuclear war looms over average people, threatening
devastation on a global scale.
In these uncertain times, the U.S.
government urged citizens to duck and cover and prepare for possible nuclear attacks.
So, many built bomb shelters in their backyards or under their homes
and stockpiled supplies and food.
And as they thought about being stuck in a dark, underground, concrete room for an
uncertain amount of time, scared Americans began looking for food with a long shelf life.
And many of them turned… to Twinkies.
With their claims to “stay fresh forever”, and their sweet, fluffy flavor, Twinkies
were an inviting golden treat in a dark time.
And Continental decided to ramp up its marketing campaign for Twinkies…
Starting with a new mascot.
Clad in classic cowboy boots and a 10-gallon hat, with a heart-covered handkerchief around
the neck and his trusty lasso, Twinkie the Kid had a look that screamed “America”.
And that look was soon recognized nation-wide.
But Continental had more in store than just a new mascot, they had also struck
a deal with comic giants Marvel and DC.
A deal that made sure that Twinkies were further tied to American pop-culture.
Soon, Batman was saving the Twinkies delivery men from an evil brainwashing
plot by the Penguin, Thor was distracting Gudrun the Golden with golden Twinkies
sponge cakes, and Wonder Woman was catching a thief using Twinkies as bait.
Twinkies had become as American as apple pie, but the man behind them
decided that it was time to step down.
Forty-two years after he had created Twinkies, James “Mr.
Twinkie” Dewar retired from his position as vice president of Continental.”
Eight years later, Continental was pumping out Twinkies by the truckload and
selling at the rate of 1 billion annually.
Soon after Continental caught the attention of Ralston Purina who
bought them out for $475 million.
Ralston ran Continental for a total of 11 years before selling it to
Interstate Bakeries for $560 million.
Already a giant in the baking industry, Interstate’s merger with Continental made
it the largest baking company in the U.S.
However, Interstate would soon learn that their dominance wouldn’t be enough
to save them from what came next…
America’s tastes took a drastic turn: Beach bods and thin waistlines
were in, and sugar was out.
The growing popularity of diets like low-carb, Atkins, and South Beach
spelled disaster for the sugary treat.
Sales were slumping, and soon fell flat as Americans took issue with an ingredient
list full of calories, sugar, and preservatives that they couldn’t pronounce.
Six years later, Twinkies expired.
Interstate filed for Chapter 11 Bankruptcy due to decreased sales,
increased ingredient and pension costs, and an inefficient delivery systems.
But thanks to one powerful fan rooting for the company, the company would
unexpectedly emerge from bankruptcy.
Senator Charles Schumer of New York personally appealed to a big lender to save Interstate.
Ripplewood Holdings paid $130 million to take control of Interstate
and renamed it Hostess Brands.
Twinkies had just survived the death of their company, but soon they’d have to do it again…
Hostess had just risen from the grave, and already they were about to fall back in.
Within a mere three years of being created, Hostess brands filed for
bankruptcy thanks to its adding debt, and selling products at a price that
didn’t cover costs or return a profit..
And months later, employees nationwide went on strike.
It was over for the reborn Hostess.
The company announced that it would lay off thousands of employees, and sell off assets
like Twinkies and other well-known brands.
When the news got out, headlines across the country reported the death of Twinkies.
They flew off store shelves.
Americans were outraged — even those who never cared about Twinkies.
People raced to stock up before they were gone forever, and boxes of
Twinkies even reached $250,000 on eBay.
And as Hostess fell apart, another powerful fan thought about how
to save America’s beloved snack.
Andy Jhawar, a senior partner at Apollo Global Management, saw the value
in the nostalgia attached to a part of American culture like Twinkies.
So, he reached out to someone who had a reputation for reviving
classic brands: Metropoulos founder and billionaire, Dean Metropoulos.
Dean was on board, and the two got to work.
Fortunately for the two, Hostess went bankrupt in the perfect way for them to take over.
Hostess’ bankruptcy resulted in a 363 asset sale where a company
sells all or part of its assets.
This meant that Dean and Andy could buy what they wanted, like Twinkies, while
leaving less desirable assets behind, like its inefficient delivery system.
Even better for them, they were the only buyers there.
Apollo Global Management and Metropoulos & Company spent $410 million to buy out Twinkies,
Hostess’ recipes, and five Hostess factories.
Andy and Dean were on track to bring Twinkies back from the dead, and
promised to restock Twinkies that year.
Then it was time to get to work.
The two improved Hostess’ deliveries and factories, they expanded the Twinkies
product line, and they even extended the shelf life from 25 days to 65.
And that summer, they made good on their promise.
Twinkies hit store shelves again across the U.S.
alongside a viral “The Sweetest Comeback in the History of Ever” ad campaign.
Customers flooded in, snatching them up.
Twinkies sold out overnight — bringing in $555 million in revenue.
Success was sweet.
Andy and Dean successfully revived Hostess and the company began making a million Twinkies
a day, bringing in $180 million in profit.
Then, only one year later, the two took Hostess public.
The company was valued at $2.3 billion — nearly five times what the two had paid for it.
. Today, Twinkies is recognized as an American icon, and sales continue to rise.
With the COVID-19 pandemic, more people have been eating at home, once again
finding a little extra comfort in a dark time with their favorite snacks.
This is the story of how a wagon driver invented a snack that became an American
icon, and claims that it would stay “fresh forever” made it a common sight
in bomb shelters across the country.
This is the story of Twinkies.
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