Rabobank Report: The return of the Twinkie – naughty but nice?

A new report from Rabobank focusing on the relaunch of the Twinkie identifies four lessons that also extend to the wider snack cake market: the strength of iconic brands such as Twinkie; consumer recognition that there is room in our diet for a little fun and indulgence; the dangers in tampering with a winning formula; and the opportunities to continue expanding the snack cake market.

“When the makers of Twinkies, Hostess Brands Inc. (HBI), were forced to close in November 2012, many commentators put it down to the unstoppable trends of the ‘real food’ movement,” explains Rabobank analyst Nicholas Fereday. “However, the company’s snack cakes businesses, Hostess and Dolly Madison, were quickly snapped up by private equity firms in early 2013, and after just nine months Twinkies are back on the shelves.”

Rabobank identifies four lessons – or “Twinkie Takeways” – about the return of the Twinkie that also extend to the wider market :

Twinkie Takeaway 1 - Iconic brands have a long shelf life: In an age where the private label is stealing market share from brands, the market for Twinkies is not in doubt. The reasons? An iconic brand and loyal customer base.Twinkie Takeaway 2 - We never said we were healthy: Twinkies have never pretended to be healthy, and that’s just fine with most people. While health is a key trend in the baked goods sector, so is indulgence – around 60% of the population view snacks as an opportunity to splurge, preferring what tastes good rather than what is healthy.Twinkie Takeaway 3 - Don’t pimp my Twinkie! Twinkies are iconic for a reason. They have stoically withstood the changing times as consumers cycled through low carb, low fat, and high-protein phases. Changing the recipe to fit popular dietary trends may only backfire.Twinkie Takeaway 4 - Cutting a bigger slice of a larger cake: Marketing innovations from candy manufacturers and the successful takeover by Flowers Foods of TastyKake suggest there are plenty of strategies to continue expanding the snack cake market. Snack cakes also play well to the new snacking culture in terms of portability, convenience and affordability.

According to Rabobank, these four ‘Twinkie Takeways’ suggest a positive outlook not just for Twinkies, but for the snack cake market in general.

For more information about this publication, please contact its author, Nicholas Fereday:

nicholas.fereday@rabobank.com / +1 212 916 3793

Alternatively, for other information, please contact Rabobank’s press office:

k.verheul1@rn.rabobank.nl +31 30 21 66918

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