The Mensan Behind the Sweetest Comeback in the History of Ever
By David Leavitt • Illustrations by Jonathan Moore
The Mayans were correct in predicting the end of the world. On Friday, Nov. 16, 2012, the Interstate Bakery Company, dba Hostess Brands, announced it was ceasing operations. All Hostess Twinkies and Hostess Ding Dongs, along with Wonder Bread, Home Pride and hundreds of other baked goods, were no longer to be baked and sold to millions of fans across America. It was the end of the world as many had known it. Or was it? Let’s start at the beginning.
In 1919, a Chicago-area bakery named Continental Baking introduced a prepackaged iced chocolate cupcake (the famous squiggle would not be added until decades later), and by 1925 the Hostess Cupcake brand was born. Five years later, sales manager Jimmy Dewar was thinking about how to sell more shortcake when strawberry season was over. The company had ample bakery capacity when the season ended and shortcakes were no longer in demand. So Dewar had an idea: bake individual cakes in the shortbread pans, fill them with crème and pack and sell them two for a nickel. While driving to work, he noticed a billboard advertising Twinkle Toe Shoes, and the word “Twinkies” popped into his head. The future iconic sponge cake had a name and quickly landed on store shelves.
Over the next 60 years, the Hostess brand went through several owners and company names, and by the 1990s it was property of the Interstate Bakeries Corporation, headquartered in Kansas City. The 1990s and early 2000s were boom times for the company, with Hostess Cakes and Wonder Bread some of the top-selling bakery products in the country. But by late 2004 fortunes had changed. Low-carb diets had taken over. A variety of pension liabilities and production costs were rising faster than revenues. And the company fell into Chapter 11 restructuring.
Private equity firm Alvarez & Marsal was in charge of the restructuring and made some changes to management. I joined the company in early 2006 to help turn the snack division around, leading marketing for Hostess, Dolly Madison and Drake’s. In 2009, the company successfully emerged from bankruptcy, both profitable and with sales increasing. I left the company as the parent organization moved its headquarter to Dallas, renaming itself Hostess Brands Inc. While not good for Kansas City, the company was alive and making money again.
Three years later, in January 2012, the company again fell into Chapter 11 bankruptcy. I returned to try and help save it, but this time the environment was much worse. The shift of consumers’ preferences for wheat bread over white bread, along with a white bread price war, saw company costs again rising faster than revenue. Debt obligations were skyrocketing, employee morale was sinking, and there was a growing conflict between the ownership and union employees in both the bakery and the delivery organizations. The company was dying a slow death.
Then in November 2012 the baker’s union went on strike. The ovens were turned off, and within days retailers started running out of inventory as orders weren’t filled. The company was quickly running through what remaining cash it had left. Less than two weeks later, the financial institutions pulled the plug, and the company closed. Maybe it wasn’t exactly what the Mayans had in mind, but for Hostess the move from Chapter 11 reorganization to Chapter 7 liquidation may as well have been Armageddon.
Within 24 hours of the announcement, most store shelves nationwide were cleared of Hostess products. Fans of Cupcakes, Coffee Cakes, Ho Hos and the legendary Twinkie were stockpiling their pantries. Some people were selling boxes of beloved Ding Dongs on eBay for $1,000. (I don’t think anyone actually paid nearly that much.) One person tweeted, “I haven’t eaten a Hostess snack since like 1998. Today I’ve consumed 7 Twinkies, 4 Ho Hos, 9 Ding Dongs, 2 Sno Balls & a loaf of Wonder Bread.” Even Rob Lowe was despondent, tweeting, “I’m not kidding. If Hostess goes under I will mourn. And wear a black arm band. In the shape of a Chocodile. Then, I will try to eat it.” Editorial cartoons in Colorado and Washington bemoaned the disappearance of Twinkies just as marijuana became legal in those states.
Don’t Call it a Comeback, I Been Here for Years
This lovefest was not lost on those willing to buy the assets. The emotional outpouring showed there remained a tremendous amount of loyalty to these brands. That love meant potential revenue. Never before had so many well-known food brands been for sale at what some considered rock-bottom pricing. A multitude of companies wanted to buy some or all of the Hostess/Interstate Bakeries brands and bakeries at auction. Chapter 7 liquidation requires an extensive due diligence process to value the brands and the physical assets. Members of the Federal Trade Commission, various financial institutions and advisors, plus a select group of business executives, including me, worked together to place a value on everything as quickly as possible. This was followed by an auction process with prequalified bidders who interviewed the same key executives, toured the bakeries and reviewed all of the data the court had pulled together.
After four months of due diligence and the auction process, the company was split up. Flower Foods, one of the largest bakery companies in the country, put in the highest bid for Wonder Bread, Home Pride and several other national bread brands. As for Hostess, billionaire investor Dean Metropoulos and the private equity firm Apollo Management Group joined together to bid for the Hostess and Dolly Madison snack brands, as well as four bakeries and the Kansas City offices.
By late March 2013, with Metropoulos and Apollo looking like they would win the bid, a small group of advertising agencies and executives flew to Dallas to put together a launch plan. I sat in the room with the new company president, a few key members of the advertising and public relations agencies, the new head of sales, and a few members of the sales brokerage company. Together, we had been given the task of developing the relaunch plan to present to our new owners the following morning. By about 8:30 that night, we had a skeleton plan in place but no unifying theme. We were given a tagline by our new owner: “Your cake is back.” A little lame, we thought. This is going to be an absolute consumer love affair, and we needed to tap into that reality, drive excitement and get back on the shelf.
We knew we had to come back with something so over the top and so big that there was no way our customers couldn’t take us back. After two hours of working on the theme, we were struggling. As the team debated the plan, in the back of my mind I had a song playing over and over. I could see the video and couldn’t let it go. Finally, I spoke up and said I wanted to play something for the room. To befuddled stares from my peers, I cued on my iPhone LL Cool J’s “Mama Said Knock You Out.” I played it once, then again reading the lyrics:
Don’t call it a comeback, I been here for years.
I’m rocking my peers, putting suckers in fear.
I played the rest of the first part of the song, which talked about “towering over the competition,” “competition’s going to pay the price” and “better not compare.” It had an attitude, like the musical equivalent of Muhammad Ali standing over Sonny Liston. Bernstein-Rein’s creative team quickly nodded and suddenly had a spark. You could just see the creative juices begin to surge. The president of our company said, “You know what? You guys got it now. That’s what it is.” He then sequestered them in an office and said not to come out until they had the theme song and tag — or in 30 minutes, “whichever comes first.”
So they brainstormed: the greatest comeback, the greatest comeback ever, a sweet comeback, the sweetest comeback. But these were not unique or ownable. A lot of people or sports teams can claim a “greatest comeback.” Then they remembered one of our missions, to “youthify” the brand. Move it from a Jay Leno safe zone to a more contemporary Jimmy Fallon, in a language that some millennials would use. That is when it hit. “The Sweetest Comeback” became “The Sweetest Comeback in the History of Ever.” Grammatically incorrect, too large to use on packaging or as a tag line on in-store displays, almost a third of an entire tweet limit but 100 percent in line with our strategy, ownable and a big enough statement to get the attention we would need to get back on the shelf. The agency pitched it to the management team, and we all yelled in excitement.
The next morning, Metropoulos approved but with one caveat. It was now the end of March. He wanted us to start advertising in 12 weeks and relaunch the company in 15. We did not have a staff, a budget nor a formal plan. We needed product formulations and bakery requirements, new packaging, and complete retailer agreements using a new distribution system to bring us back prior to the back-to-school season. We had to create copy, photography, social media posts, a new website, sales materials, price lists and more. Could we do it?
Prepare Your Cakeface
There were doubters, sure, competition and customers alike. They didn’t believe we could open four bakeries, hire up to 1,000 people, create an entirely new logistics and distribution system, develop a marketing campaign, and give people a reason to believe that the same great-tasting Twinkie was back. However, the response from Metropoulos and company president Rich Seban was simple: “Just watch us do it.”
We immediately went to work. To be nimble, we outsourced all marketing efforts, with only myself as head of marketing, managing five different ad agencies. I knew it was about to be the most caffeinated 15 weeks in our lives. Luckily, we had some really good ad agency partners, in Kansas City, in Chicago and on both coasts.
By the end of April 2013, we had developed the package design updates, formed social media and public relations strategies, created a display-driven shipment and distribution launch plan, and built a teaser campaign to show customers and, eventually, consumers. Metropoulos checked in daily, and Seban was on the road five to six days a week leading the sales pitch to get customers onboard. And we now had a skeleton crew in purchasing, finance and operations. Everyone was working 60-plus hours a week executing the plan.
April rolled into May and we started creative production for all the planned assets, such as social media, outdoor media, packaging and launch-day plans. Additionally, we shared with some key customers a first-batch test product so they would have faith we were making progress with all of the new equipment and formulations.
June hit and we received the final “go live” approval from ownership for all of our marketing programs. Mid-June we launched the teaser campaign, called “Prepare Your Cakeface.” We didn’t have product to show people. All we had was the brand and a promise we were coming. We hired street teams in Chicago, New York and Los Angeles. They would intercept people in high traffic areas and give out T-shirts printed with our logo and the words “Prepare Your Cakeface.” The strategy was to talk to everyone, get them excited about Twinkies coming back, then do some quirky, fun stuff like mouth yoga and chewing exercises. “Get your jaws ready because you’re going to want to eat Twinkies again.”
This tease campaign was tied to two video apps, Vine and Instagram. People would post videos doing the mouth yoga with the hashtag #Cakeface, and we would pick up the video automatically and feed it into our dedicated website, prepareyourcakeface.com, as well as rebroadcast links to our Twitter feed. Within a week we were a top-10 trend on Vine with more than 1,000 videos. The comeback news was spreading by word of mouth and started to get picked up by the news media, trade press and bloggers.
In early July we formally started a countdown, announced on Facebook and Twitter, to the planned launch on Monday, July 15, 2013. Our plan was for product to hit retailers’ shelves that day. We also revealed the date on strategically placed gigantic billboards in New York, Chicago and Los Angeles, each featuring a Hostess logo on a sea of red with an image of an enormous Twinkie or Cupcake and the “7–15–13” date. That was it.
We didn’t say anything else. Just the logo, the date and a product shot. People took pictures and posted them on their own social medial channels, getting the word out. We took our social media program to retailers, and they began posting on their social media sites, adding announcements to their emails or loyalty card messages.
With the headquarters back in Kansas City, we decided to do something special. We created the largest Twinkie billboard in the history of ever. It was about 40 feet long and 20 feet tall. The billboard started as a big red banner with only the date featured. The day of the launch, the billboard changed to a gigantic Twinkie, with the slogan “The Sweetest Comeback in the History of Ever” draped over it. It was so iconic. You couldn’t miss it on I-35 near Southwest Trafficway. Originally, we were going to put a giant Twinkie on a billboard near the Royals’ Kauffman Stadium, but the Twinkie turned out to be too big!
At the same time we were launching our social media and outdoor media campaigns, we sent early product samples to key influencers who had previously commented on Hostess’s shuttering seven months earlier: David Letterman, Jimmy Fallon, Conan O’Brien, Snoop Dog, Rob Lowe and others. We knew they were passionate fans, so we wanted them to try our first samples. It worked; Twinkies were in their monologues within days. Or they were posting tweets saying, “Look at the sample box I just got of Twinkies. They’re going to be back.”
Two weeks from the launch date, we started baking product around the clock as fast as we could, then shipped truckloads to retailers. We had planned a major PR event on the morning of launch. We were going to be on NBC’s “Today” show and have a major relaunch celebration in Rockefeller Plaza. On the same day, we would have CNBC in the Chicago bakery, home of the Twinkie. Everything was going better than we could have expected.
Keep Baking Cake
Everything was going better than expected. That is, until a small Northeast grocery chain decided to put out its product the day it received it, the Thursday before the Monday launch date. Nationally, we were shipping prebuilt displays. Each display had about 300 boxes of Twinkies, Cupcakes and Donettes. This chain immediately put the displays out in its 10 or so stores. People went nuts! The product was gone in a flash. People were tweeting and posting about it: “Hey, Twinkies are out. Twinkies are out!”
Another retailer out West did the same thing and called attention to the early release on social media. Early the next morning we received a phone call from Walmart about what it was going to do with its 4,000 displays. “We want to be the first nationwide,” they told us. “We are going to launch tomorrow morning.” We asked them to wait until Sunday night because of the events planned on Monday, but we got only an overnight reprieve. At 8 a.m. on Saturday we got the call. Not to be beaten by other retailers, Walmart was instructing store managers to put out everything immediately.
I was immediately called by our sales vice president and near instantly headed out to check the closest store. The huge display had been placed just inside the entrance and was already empty but for a few bags of Donettes. We heard the same story from others across the country that morning. Every Walmart was completely sold out before noon — 4,000 stores, each with a 300-plus unit display of Twinkies, Cupcakes and Donettes sold out nationwide.
We hit panic mode. Was NBC going to cancel? Was the launch event ruined? Are we going to be able to bake enough product and refill these stores in this next week or will stores be out of stock for weeks? We called NBC to tell producers what was happening, and they told us to keep baking cake; the Rockefeller Plaza celebration event was still on. Our hearts started beating again.
The morning of the event we were ready. A bright red delivery truck, with images of a Cupcake on one side, a Twinkie on the other and the Hostess logo on both sides and on the top (which I had added just three days prior), started driving into New York City at 6:30, slowly coming across the Hudson River then zigzagging through town. The “Today” show put its traffic helicopter in the air to track the Hostess truck. ABC, not to be outdone, put its “Good Morning America” helicopter on the truck as well. You could see the Hostess logo weaving through New York City traffic!
On its way through town, the truck picked up Al Roker, who helped Twinkie the Kid drive into the Plaza. We’d been giving out T-shirts with our theme “The Sweetest Comeback in the History of Ever” and getting people all hyped up, as did NBC, which had announced the Friday before the promise of free Twinkies. There were hundreds if not a few thousand people present that morning in Rockefeller Plaza. Roker, the “Today” crew and our sampling team gave out almost 10,000 Twinkies over the course of the day. The entire event went off flawlessly. If anything, the launch was even bigger than we had hoped for because the people who had seen the product in Walmart were talking about it on social media all weekend.
After the launch, which also coincided with the “The Sweetest Comeback in the History of Ever” appearing on billboards, digital media and bus wraps, Twinkie the Kid and our “Sweetest Comeback” truck went on a nationwide, multiple-month tour. We had teams showing up at state fairs, music festivals and football tailgate parties to give out T-shirts and samples. We even dropped into a motorcycle rally. We had product placement and promotions with TV shows and movies, including “Despicable Me” (Twinkies look like Minions!) and “X-Men: Days of Future Past.” We launched additional products each month as bakery capacity would allow — Zingers, Ding Dongs, Sno Balls and more. Our single-serve items, popular in convenience stores, launched in early winter.
After 12 months, the numbers were staggering. We doubled the amount of Twinkies and Cupcakes sold during the first month versus the prior year. In the old company, we sold about 500 million Twinkies a year. We sold more than 600 million in the relaunch year! It was crazy. Our new Facebook page hit 1 million fans. There were more than 500 million Twitter mentions and impressions across July and August, and more than 1 billion for the entire year. It was a huge team effort, one I am very proud to have been a part of. It really was “The Sweetest Comeback in the History of Ever.”
Reprinted from the March 2016 Mensa Bulletin and from the October and November 2015 issues of Mension, the newsletter of Mid-America Mensa.
