On April 6, 1930, a baker at the Continental Baking Company plant in Schiller Park, Illinois, looked at a row of machines standing idle and came up with a snack that would outlast the company that made it. James Dewar’s answer was a finger-shaped sponge cake pumped full of banana cream. He called it the Twinkie.
Ninety-three years later, in September 2023, the maker of that cake agreed to be sold to The J.M. Smucker Co. in a cash-and-stock deal valued at about $5.6 billion, including debt. The story of how a stopgap for out-of-season strawberries became a multibillion-dollar brand is doing the rounds again this week, so here is the record, with every date checked.
A problem of idle pans
Continental’s Chicago-area plant made cream-filled strawberry shortcakes. When strawberries went out of season, the machines that produced them sat unused. Dewar, a Canadian-born baker, decided to keep them running with a different filling, and chose banana cream.
The name came from the road. Dewar said he spotted a roadside sign in St. Louis advertising “Twinkle Toe Shoes” and shortened it. The recipe for the sugar-cream filling was reported at his death in 1985 to be a closely held secret.
Why Twinkies taste of vanilla
The banana cream did not survive the Second World War. Bananas were rationed, so Continental switched to vanilla cream. Customers liked it, and the swap stuck. Banana returned only in short promotions until 2005, when a month-long tie-in with the film King Kong lifted Twinkie sales by 20 percent and persuaded Hostess to put a banana-cream version back in its lineup in 2007.
Along the way the cake shrank. Before the 2012 bankruptcy, a Twinkie weighed 42.5 grams and carried 150 calories; the current cake weighs 38.5 grams and carries 135 calories, with a shelf life stretched from 26 days to 45. The urban legend that a Twinkie lasts forever is just that: a box opened eight years after the bankruptcy had one cake fully molded and another with filling that had turned brown.
Bankruptcy, shutdown, comeback
Hostess Brands, the parent company, filed for Chapter 11 protection on January 11, 2012. Twinkie sales in the year to December 25, 2011, were 36 million packages, almost 20 percent down on the previous year, and the company said customers were moving to healthier food.
On November 16, 2012, Hostess announced it was winding down operations and asked the bankruptcy court for permission to close and sell its assets. A mediation attempt with the bakers’ union bought two days. On November 21, 2012, Judge Robert Drain approved the shutdown and Twinkie production in the United States stopped.
The gap lasted eight months. Apollo Global Management and Metropoulos & Co. bought the Hostess cake brands out of bankruptcy for $410 million in 2013, and Twinkies went back on US shelves on July 15, 2013. The company went public in 2016 through a deal that valued it at $2.3 billion and gave it the ticker symbol TWNK.
The $5.6 billion deal
On September 11, 2023, Hostess Brands announced an agreement with The J.M. Smucker Co. Shareholders were to receive $30.00 in cash plus 0.03002 Smucker shares for each Hostess share, which the companies valued at $34.25 per share, or about $5.6 billion including assumed debt. Hostess stock had closed at $22.18 on August 24, 2023, before reports of a possible sale surfaced, so the offer carried a premium of roughly 54 percent. Hostess had about 3,000 employees and annual sales of about $1.4 billion at the time. The purchase closed on November 7, 2023.
The Twinkie timeline
- April 6, 1930: James Dewar creates the banana-cream Twinkie at Continental Baking in Schiller Park, Illinois.
- Second World War: banana rationing forces the switch to vanilla cream.
- 2005-2007: King Kong promotion lifts sales 20 percent; banana cream returns to the lineup.
- January 11, 2012: Hostess files for Chapter 11 bankruptcy.
- November 21, 2012: court approves the shutdown; production stops.
- July 15, 2013: Twinkies return to US shelves under Apollo and Metropoulos, who paid $410 million.
- 2016: Hostess lists on the Nasdaq as TWNK at a $2.3 billion valuation.
- September 11, 2023: Smucker agrees to buy Hostess for about $5.6 billion; the deal closes on November 7, 2023.
Measured from the first banana-cream batch to the Smucker announcement, that is 93 years, five months and five days. The Schiller Park bakery where it all began did not make it to the finish: Hostess closed the plant in October 2014, nine years before the sale.
Further reading
- Wikipedia: Twinkie
- Wikipedia: Hostess Brands
- SEC: Hostess Brands to be acquired by The J.M. Smucker Co. (Rule 425 filing, Sept 11, 2023)
Image: Evan-Amos, CC0 via Wikimedia Commons
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