Food Business News - December 4, 2012 - 9

Editorial
EDITORIAL STAFF Editor-in-chief Morton I. Sosland Executive editor, markets Neil N. Sosland Editor L. Joshua Sosland Executive editor Keith Nunes Senior editor, markets Jay S. Sjerven Managing editor Eric J. Schroeder Associate editor Jeﬀ Gelski Associate editor Ron Sterk Assistant editor, markets Laura Lloyd Internet editors Allison Gibeson Erica Shaﬀer Graphic designer, market graphics, data Christina Sullivan

MORTON SOSLAND

editor@sosland.com

In mourning there is a learning in demise

PUBLISHING STAFF Chairman Charles S. Sosland Vice-chairman L. Joshua Sosland President and publisher Mark Sabo Associate publisher G. Michael Gude David DePaul Bruce Webster Vice-president, chief ﬁnancial ofﬁcer Melanie Hepperly Audience development director Don Keating Advertising manager Nora Wages Director of design services Sadowna Conarroe Circulation manager Judith Arnone Digital systems analyst Marj Potts Manager of advertising design Becky White Director of e-Business Jon Hall Director of on-line advertising and promotions Carrie Fluegge Promotions manager Taré Torres WE’RE EAGER TO RECEIVE YOUR FEEDBACK: E-mail editor@sosland.com or write to us at Food Business News, 4800 Main Street, Suite 100, Kansas City, Mo, 64112

es, it was only coincidence, but the temp- Looking behind this name, which has been tation is great to note the similar timing used only a short time, to its founding comof Hurricane Sandy and the shutdown panies — Interstate Bakeries Corp. and Contiand pending liquidation of Hostess Brands. In nental Baking Co. and the many independents the case of the natural disaster, destruction ex- that once stood proud — is where this event ceeded anything that has occurred before from prompts sorrow as well as alarm. For those similar storms hitting the Northeast. When it who recall names from the past of the individcomes to Hostess Brands, the point may easily uals who are credited with shaping the modbe made that the food manufacturing industry ern food industry this collapse rings a solemn has experienced shutdowns and disappearanc- funeral bell. One can only imagine what Roy es of many large and small companies. Like Sandy, though, the Hostess collapse The Hostess collapse writes ﬁnis in a historywrites finis in a history-making way for a company that carried many of the roots making way for a company that carried many of of modern-day food manufacturing. This event not only merits attention as a hugethe roots of modern-day food manufacturing. ly important development but is worthy of study to help other food makers avoid a similar fate. In the general media, the shutdown of Nafziger and Lee Marshall, just to name two Hostess Brands has been accorded front and behind these businesses, would say about the full-page attention largely because of the “ro- chain of events leading to Hostess’ demise. These are the men who managed to foster mance” associated with products like Wonder and Butter-Nut for bread, Hostess for cakes the concept of national food manufacturing by and Twinkies among specific products. Hardly bringing together independent family-owned a major newspaper or broadcast news failed enterprises. In creating these businesses, they to mention these products as popular in the cultivated the market among public investors youths of readers and listeners across all in wanting to own shares. This revolutionized American consumers. It also should be noted food making into largely shareholder-owned that many of these reports included wry com- companies. At the same time, this style of ments about the lack of nutrition, the excess ownership has encouraged foreign investing in of calories and supposedly useless content of American food companies. As is all too often the case in a corporate more than a few products. The statement was made with some frequency that the popularity collapse, the fall of Hostess Brands is easy of what Hostess made defined the attitudes of to understand. Indeed, the point could be consumers toward nutrition advocates, a few made that the reasons are so evident that it’s hard to understand how this could have of whom celebrated this event. Particularly telling in these stories is the been avoided. Happily for the food industry, widespread expectation that regardless of what there’s nothing in the Hostess story unique to may happen to the company that originated and this industry. Instead, the faults were unwise made these products, it is likely, if not certain, business strategies, haphazard day-to-day they will not disappear at retail. Many rumors management, mistakes in decision-making, were heard of other food companies and of in- and union contracts negotiated in good times vestor groups expressing interest in acquiring that led to disaster when the inevitable tightthe product names. These assurances are not ening occurred. Old-line products are also actotally convincing as evidenced by consumers countable. Mourning the demise of this once grand busirushing to stores to gather products that bore these brands. Hoarding surfaced because peo- ness should not divert attention from the issues ple apparently doubted that such august brand at hand. What happened is a shocking example of how accumulated mistakes finally destroy a names had lives beyond the company itself. For food manufacturing, the demise of business, any business, even one with the best Hostess Brands is not itself of great import. known brands in its industry. FBN

December 4, 2012

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Food Business News - December 4, 2012

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