Twinkies' New Owner Courts a Novel Group of Snackers: Stoners -- WSJ

Dow Jones
04-11

By Katie Deighton

J.M. Smucker is sending a "Munchie Mobile" on a road trip leading up to the unofficial holiday of cannabis on April 20 to promote Hostess brands like Twinkies, Ding Dongs and Donettes.

It is a departure from Hostess marketing in its pre-Smucker era, when its sweet baked goods were advertised largely with families and children in mind, using cartoons and characters like Twinkie the Kid. Smucker, which acquired Hostess for $4.6 billion in 2023, wants to revitalize sales of a storied yet dusty portfolio by connecting with a wider breadth of consumers.

"Hostess maybe wasn't quite as relevant or had gotten a little tired from a brand standpoint," said Smucker Chief Marketing Officer Gail Hollander, adding that Twinkie the Kid is alive but "taking a siesta."

Part of the strategy includes moving Hostess closer to popular culture, including 4/20 celebrations, Hollander said.

The Munchie Mobile truck over the next few weeks will hand out free snacks outside cannabis dispensaries in New York, Massachusetts, Connecticut, Maryland and New Jersey every day at 4:20 p.m., eventually parking for six hours in Brooklyn, N.Y., on 4/20 itself.

Hostess, a 106-year-old brand, faces both a swath of new and trendy competition and a potential decline in the American pursuit of snacking.

A clamor for snacks during the pandemic generated sales increases for the likes of Hershey and Mondelez International, which owns Oreo and Ritz. Smucker, known for its jams and jellies, made a play for the snack market with the Hostess acquisition, confident that the sweetness of Ho Hos and their baked siblings would complement its portfolio of frozen Uncrustables sandwiches and savory Jif peanut butter.

But shares of Smucker fell 8% on the day the deal was announced. Hostess had already been through two bankruptcies and cleanup jobs. Analysts raised their eyebrows over the $4.6 billion price tag, excluding debt, that had materialized as the result of a bidding war, and pondered whether the craving for snacks could continue.

Last month, shares of General Mills, Kraft Heinz, PepsiCo and Campbell's fell as snack sales weakened and investor skepticism increased alongside the popularity of weight-loss drugs.

Smucker's stock price remained relatively stable during this time. And for its part, the company thinks snacktime is still on, despite noting last year that consumers are reducing their visits to convenience stores.

"Consumers don't do three meals a day anymore," Hollander said. "They're actually doing mini-meals throughout the day, and so snacking in one form or another has become something that's critically important for them."

Mark Smucker, the company's president and chief executive officer, told analysts earlier this year that the company isn't satisfied with its performance on Hostess so far. Smucker's sweet baked snacks sales for the quarter ending Jan. 31 fell 7% from a year earlier to $279 million, a drop the company partially attributed to decreases in snack cakes sales in particular. The company's overall sales for the quarter declined 2%, which Smucker, the CEO, said was due in part to supply-chain disruptions.

The company has made leadership changes. Dan O'Leary, a former Hostess executive who later ran Smucker's pet and sweet baked snacks units, left the company in March. He was succeeded by Smucker veteran Judd Freitag.

Smucker said it is doing more to create new products, including mini versions of popular Hostess snacks like Cupcakes, to keep up with consumer trends. It also plans to bring back Suzy Q's cakes in September, after Hostess discontinued them in 2020, and expand distribution in grocery and convenience stores.

Hostess's marketing division, meanwhile, is getting better at targeting snackers at the right place and the right time, Hollander said. The company is scheduling its digital ads to pop up around popular snack times, such as after lunch and dinner, as well as using geotargeting technology to serve mobile ads to consumers at times when they might be driving close to a grocery store, or walking near a convenience store, she said.

Smucker has also given Hostess packaging a sleeker design and introduced an advertising campaign called "Speakie Snackie," which it is continuing at the Munchie Mobile, where people are given a free Hostess snack in exchange for reciting designated phrases like "Bet you dollars to Donettes I have the munchies." New commercials include an irreverent, bossy voice-over and bold lettering.

"If you go back in the history books of Hostess, there's always this sort of pride and this extra-ness," Hollander said. "We tried to lean into that tonally, to make sure we had the opportunity to punch above our weight and make sure that our impact is outsized relative to our dollars."

Write to Katie Deighton at katie.deighton@wsj.com

 

(END) Dow Jones Newswires

April 11, 2025 06:00 ET (10:00 GMT)

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