The rise and fall of America's favorite junk foods
Kraft cheese, Jell-O, and Twinkies are iconic brands that are lucky to be alive. This is how they became staples — and why they almost disappeared.
Transcript
00:00 (upbeat music)
00:02 These iconic brands went from all-American staples
00:05 to endangered eats.
00:07 At one point, Kraft controlled 40% of the US cheese market.
00:12 - It's good.
00:13 I do like it.
00:14 - And believe it or not,
00:16 a jello dish like this was once a dinner party delicacy.
00:19 And Twinkies, well, they were everywhere.
00:24 So what went wrong?
00:25 And can they recover?
00:28 (upbeat music)
00:30 Kraft cheese has been a staple in American kitchens
00:33 for over a century.
00:34 But in recent years,
00:36 people have been reaching for healthier options.
00:39 So how did the craze for processed cheese start?
00:41 And will Kraft survive?
00:44 - The Kraft story began in 1903,
00:47 when Canadian-born businessman James L. Kraft
00:50 moved to Chicago and started selling cheese out of a wagon.
00:53 Business was so successful that in 1909,
00:57 Kraft and his brothers formed their own cheese company.
01:00 A few years later,
01:00 they opened a factory in the small town
01:02 of Stockton, Illinois.
01:05 It was here that J.L. Kraft took on the challenge
01:07 to turn leftover scraps of cheddar cheese
01:10 into a longer-lasting product with consistent taste.
01:13 - Now look, J.L., you know it'll never work.
01:18 When you heat cheese hot enough to make it keep,
01:21 it's gonna separate.
01:23 - But it did work.
01:25 Kraft discovered that if he heated the cheddar
01:27 with an emulsifier, it would create a smooth cheese
01:30 that would have a much longer shelf life.
01:32 He was making what we now call American cheese.
01:36 And in 1916, Kraft became the first person
01:39 to patent this process.
01:40 His invention couldn't have come at a better time.
01:45 When the U.S. military deployed
01:46 over four million soldiers in World War I,
01:49 it needed a huge supply of non-perishable food.
01:52 The Army bought six million pounds of cheese
01:55 from Kraft, over a pound and a half per soldier.
01:58 By 1921, Kraft was selling 1,000 tons of cheese per month.
02:03 Kraft built on this success by acquiring competitors,
02:07 like the Velveeta Cheese Company in 1927,
02:10 and merging with the Fenix Cheese Company
02:12 the following year.
02:13 In 1929, Kraft's annual sales surpassed $86 million.
02:18 The 1930s would see another masterstroke,
02:21 a box of elbow macaroni with a foil package of Kraft cheese.
02:26 - Macaroni and cheese makes a hit,
02:28 and it's simple with Kraft macaroni and cheese dinner,
02:31 only a nickel a serving, too.
02:33 - And once again, the timing couldn't have been better.
02:36 The United States was in the late stages
02:39 of the Great Depression,
02:40 and a box of Kraft macaroni and cheese
02:42 could feed a family of four for only 19 cents,
02:46 or roughly $3.50 today.
02:49 It was an instant hit.
02:50 Kraft sold 8 million boxes in the first year.
02:53 Sales continued to rise during World War II,
02:56 when ration coupons could be traded in
02:58 for Kraft's macaroni and cheese dinners.
03:01 And just as it had in the first World War,
03:03 Kraft supplied tins of cheese to the US military.
03:06 The next game changer came in 1950,
03:10 when Kraft invented a way to slice processed cheese.
03:13 - Fabulous flavors, and so quick.
03:16 Mum said it took 'em no time at all
03:17 to make enough for the party.
03:19 - The trouble with Kraft cheese slices is they're so good,
03:22 there's no such thing as enough.
03:24 - And 15 years later, it launched the now ubiquitous
03:29 individually wrapped slices.
03:31 - Singles are individually wrapped,
03:33 so every single one stays fresh,
03:35 even if it's the last one in the package.
03:38 - Luckily for Kraft,
03:38 Americans' appetite for cheese was skyrocketing.
03:42 By 1980, Americans were consuming 17 and a half pounds
03:45 of cheese per capita, more than twice as much as in 1950.
03:50 Kraft wasn't afraid to tell consumers
03:51 to put cheese on just about anything.
03:54 - Arrange on greens with chicken, tomato, and avocado,
03:57 topped with sprouts and bacon.
03:59 - By the mid-90s, Kraft controlled over 50%
04:02 of the processed cheese market.
04:04 And when Kraft Foods went public in 2001,
04:07 it was the second largest IPO in US history.
04:11 Americans' seemingly endless appetite for processed foods
04:15 had fueled Kraft's growth for nearly a century,
04:18 but all that was about to change.
04:21 - Over time, what really happened was this
04:24 kind of cultural awakening to what the heck
04:27 was all that stuff that we were adding to food,
04:30 and then putting in our bodies.
04:32 - In late 2002, the Food and Drug Administration
04:35 accused Kraft of violating its labeling standards.
04:39 The company was making its singles
04:41 with milk protein concentrate,
04:43 an ingredient the FDA does not allow
04:45 in products labeled "pasteurized processed cheese food."
04:49 Rather than change the recipe,
04:51 Kraft just relabeled its singles
04:53 as "pasteurized prepared cheese product."
04:56 But Americans were waking up to the potential
04:59 negative health impacts of ultra-processed foods,
05:03 and Kraft began to worry.
05:05 The company listed consumer concerns
05:07 about food's safety, quality, and health
05:10 as one of its major challenges in 2004.
05:14 Kraft responded by removing trans fat from some products
05:18 and offering low-fat cheese slices.
05:21 Still, in 2006, the company reported a 2% decline
05:25 in the processed cheese market.
05:27 Awareness of healthier eating only grew
05:29 when influential figures like Michelle Obama
05:32 launched a national campaign
05:34 to fight childhood obesity in 2010.
05:37 - Today, we know that we can no longer
05:39 let our kids eat whatever they want.
05:42 - A 2013 petition to remove artificial dyes
05:45 from Kraft macaroni and cheese
05:47 gained over 360,000 signatures.
05:50 And a report at the time said that more than half
05:53 of consumers were concerned
05:54 with the nutrition of processed cheese.
05:57 Kraft did remove synthetic dyes from its macaroni and cheese
06:01 and also ditched the artificial preservatives
06:03 in its singles.
06:05 But revenue from cheese products
06:06 hadn't increased much since 2008.
06:09 Warren Buffett took a gamble on the company in 2015,
06:12 partnering with Brazilian private equity firm 3G Capital
06:16 to finance a merger between Kraft and Heinz.
06:20 The move aimed to turn Kraft's fortunes around
06:22 by slashing expenses and cutting 2,500 jobs.
06:27 - In focusing so much on cutting costs,
06:29 did Kraft-Heinz miss out on some opportunities
06:33 to do things that actually grow the top line?
06:36 - But 2018 brought more bad news.
06:39 Kraft-Heinz announced the market value
06:41 of its brand portfolio had declined
06:43 by a whopping $15.4 billion.
06:46 - They were respectively saying that these brands
06:49 are not as powerful as they thought they were.
06:53 - The Kraft brand itself was responsible
06:55 for a loss of $4.1 billion
06:58 because the company anticipated less growth
07:00 in the processed cheese category.
07:02 The whole debacle even led Warren Buffett to admit...
07:05 - We paid too much money for Kraft.
07:09 To some extent, our own actions had driven up the prices.
07:13 - Since the merger, Kraft-Heinz's stock has sunk about 45%.
07:18 But Kraft tends to thrive when disasters strike.
07:22 In 2020, when the pandemic drove consumers
07:24 to stock up on non-perishable goods,
07:27 Kraft products were suddenly in high demand.
07:31 Sales of its macaroni and cheese were up 27%
07:34 during the first quarter compared to the same period in 2019.
07:39 But Kraft continued to be plagued by concerns
07:41 over its ingredients.
07:43 - I'm not hungry!
07:44 - You're having one more bite.
07:45 - No! - One more bite!
07:47 - Critics also accused Kraft of showing healthy food
07:50 in a bad light in commercials targeted at children.
07:55 - Kraft, for the win-win.
07:58 - In 2021, Kraft-Heinz sold off its natural cheese division
08:02 to French dairy company Lactalis Group.
08:05 But processed cheese is something the company
08:08 is still holding onto.
08:10 That same year, the average American ate over eight pounds
08:12 of processed cheese, the highest amount since 2003.
08:17 And Kraft remains one of the most powerful companies
08:20 in the food industry.
08:24 Jell-O was once a beloved dessert
08:26 for the American upper and middle class.
08:30 But after its peak in the 1960s,
08:32 sales plummeted.
08:34 So what happened?
08:35 And can they win over the next generation of customers
08:38 with new packaging and ingredients?
08:41 - Before the prepackaged boxes and colorful,
08:44 jiggling cups we've come to recognize as Jell-O,
08:46 gelatin was served in the Middle Ages.
08:49 Gelatin is made of collagen,
08:51 and early recipes involved melting
08:53 and filtering pigs' ears and feet.
08:56 - It eventually became a status symbol
08:57 because you needed to have access to a lot of meat
09:00 to have enough bones to boil.
09:02 You also needed a large staff to do it,
09:04 and some were cool to store the gelatin
09:06 so it could set properly.
09:07 The jiggling dish was served to European royalty,
09:10 and it eventually made its way across the Atlantic
09:13 to the United States.
09:14 Soon, people were looking for an easier
09:16 and faster way to make gelatin.
09:18 But early attempts just didn't taste that great.
09:22 However, one instant gelatin product
09:24 would quickly become a staple in American households.
09:31 Invented in the tiny town of LaRoy, New York,
09:34 by struggling cough syrup maker Pearl Wait
09:37 and his wife May,
09:38 Jell-O combined gelatin with sugary fruit syrups,
09:41 which made it sweeter than other instant gelatin products.
09:45 But the small-town couple didn't know how to market Jell-O.
09:48 So in 1899, they sold the patent for $450,
09:52 the equivalent of almost $14,000 today,
09:55 to orator Frank Woodward of the Genesee Pure Food Company.
09:59 Just three years later,
10:01 Jell-O sales rose to $250,000,
10:04 or $7.4 million today.
10:08 Jell-O found its success in a series of highly strategic
10:11 and successful advertising campaigns.
10:14 It printed its own recipes,
10:19 showing and teaching consumers all the different ways
10:22 they could serve Jell-O in a meal,
10:24 which generated demand for the product.
10:26 The company commissioned cookbooks and advertisements
10:29 from American artist Norman Rockwell,
10:31 who created colorful drawings of Jell-O
10:33 in family-friendly settings.
10:35 This helped to establish the company's wholesome reputation.
10:39 In 1923, the Genesee Pure Food Company
10:42 changed its name to the Jell-O Company.
10:45 Two years later, the Jell-O Company
10:47 became part of a larger food empire,
10:49 which would eventually become General Foods Corporation.
10:52 When the Great Depression hit,
10:54 recipe books promoted Jell-O as an affordable food option,
10:57 highlighting its ability to preserve foods
11:00 and transform just a few ingredients
11:02 into a satisfying meal.
11:04 And during World War II,
11:06 Jell-O salads became a creative way
11:08 to put meals together with rationed goods.
11:10 Convenience also began to play a bigger role
11:13 in the meals people prepared.
11:15 - In World War II, when you had many more women
11:18 mobilized in the workforce
11:20 and people were looking for something easy,
11:23 it was probably much easier to just make some Jell-O
11:26 and stick it in the fridge for the next day
11:28 than to try and bake a cake or make a pie
11:32 when fat was rationed.
11:34 - And in the post-war era,
11:36 elaborate Jell-O salads became a popular choice
11:38 for home events like dinner parties.
11:40 - These were sort of public events in a private space,
11:44 so it was important that you impressed your guests.
11:47 - But the qualities that once made Jell-O
11:49 a staple in American homes started to backfire.
11:54 (upbeat music)
11:56 While Jell-O's low price point made it accessible
11:59 during hard times like the Great Depression,
12:01 its cheapness also degraded
12:03 Jell-Oton's once glamorous reputation.
12:06 Not to mention, Jell-O's association with wartime rations
12:10 made it less than appealing to consumers
12:12 who no longer had to stretch out ingredients.
12:15 So by the '50s, Jell-Oton was seen as something
12:17 to stick leftovers in or serve to kids.
12:21 And by the '70s, Jell-O sales began to decline.
12:24 In response to its slipping sales,
12:27 Jell-O hired comedian and actor Bill Cosby
12:29 as a spokesperson in 1974.
12:32 The partnership is one of the longest celebrity endorsements
12:35 in American advertising history, lasting 29 years.
12:40 At the time, Cosby's endorsement helped boost sales,
12:43 but Jell-O took a hit as it ramped up production
12:46 of its prepackaged single-serve cups.
12:48 It was seen as a snack food for children,
12:51 something served in a school cafeteria or in a hospital,
12:54 not a filling meal for a family.
12:57 Tobacco conglomerate Philip Morris
12:59 bought General Foods in 1985,
13:01 and in 1989 merged it with Kraft Incorporated,
13:05 creating Kraft General Foods.
13:07 When the low-fat diet trend emerged in the '80s and '90s,
13:10 Kraft tried to market Jell-O as a diet food
13:13 with fat-free flavors to keep up.
13:15 - So in the '80s, there were all of these products
13:17 where manufacturers were trying to take away the fat
13:21 and then add a bunch of preservatives
13:23 and other ingredients and sugars
13:25 to make the food still palatable without fat.
13:28 - But for Jell-O, doing this wasn't enough
13:30 to turn things around.
13:32 Instead, it now had the added reputation
13:35 of being a diet food,
13:36 which only increased in the early 2000s
13:39 as Jell-O pivoted to promoting its sugar-free products
13:42 to take advantage of the Atkins diet craze.
13:45 When DAT didn't help bounce sales back,
13:48 Jell-O attempted to play up its family-friendly reputation.
13:51 And although consumers had embraced Jell-O
13:54 during the Great Depression as a way to cut costs,
13:57 the Great Recession didn't seem to have the same effect.
14:00 From 2009 to 2014, Jell-O sales declined by double digits,
14:05 falling from $932.5 million to $692 million.
14:10 - So Jell-O is basically the opposite
14:13 of what consumers are looking for right now.
14:15 It looks artificial, its ingredients are unrecognizable,
14:20 it has a bunch of added sugar,
14:23 and even though it's fat-free,
14:26 we all know now that that is not necessarily healthier.
14:30 - So is this the end?
14:32 Despite its falling sales numbers,
14:37 Jell-O remains popular in places like Salt Lake City
14:40 and the surrounding area,
14:41 otherwise known as the Jell-O Belt.
14:44 The area has a large Mormon population,
14:46 and Jell-O's wholesome family branding
14:48 aligns with Mormon values.
14:51 Jell-O even became the official snack food of Utah in 2001.
14:55 And the trading pin for the 2002
14:58 Salt Lake City Winter Olympics was a bowl of green Jell-O.
15:02 The company also encourages people to get creative
15:04 with Jell-O recipes on social media,
15:07 which feels like a return to Jell-O's origins,
15:10 when the company would print recipes
15:11 to teach confused housewives
15:13 what to do with a strange new product.
15:16 And in 2023, Kraft decided to rebrand the snack food.
15:20 They launched a bold and modern design
15:21 to attract a younger audience.
15:23 So while Jell-O may no longer be
15:25 the dinner table staple it used to be,
15:27 it's still alive and jiggling.
15:29 - A mainstay in pop culture and lunchboxes
15:33 for more than 80 years,
15:35 the Twinkie is an American icon.
15:37 But Twinkies almost disappeared from store shelves entirely
15:41 after two bankruptcies forced hostess
15:43 to lay off workers and shut down factories.
15:46 So what happened?
15:47 - Twinkies were invented in Schiller Park, Illinois in 1930.
15:53 This guy, James Dewar, managed a bakery plant
15:56 at the start of the Depression.
15:57 He wanted to make better use
15:58 of expensive strawberry shortcake equipment
16:00 sitting unused when strawberries weren't in season.
16:03 So he stuffed banana cream in a shortcake.
16:06 Dewar sold the Twinkies in packs of two for 5 cents.
16:09 When bananas were rationed during World War II,
16:12 the simple vanilla cream we know today became the filling.
16:15 In the next two decades,
16:17 Twinkies and its parent brand, Hostess,
16:19 dominated the packaged cake market.
16:21 Marketed to children in everything
16:23 from TV commercials to Batman comics,
16:26 Twinkies rose to the status of a cultural icon.
16:29 - You're getting ready for school.
16:30 Here.
16:32 Here's a swell dessert that you can take along with you.
16:34 A package of two big Hostess Twinkies.
16:37 - The Hostess snack cemented itself
16:39 in kids' lunchboxes across America.
16:42 - It was an affordable indulgence for families.
16:45 It was just so woven into the fabric
16:48 of the culture of America.
16:49 - In 1971, the brand introduced its mascot, Twinkie the Kid.
16:53 - It's Twinkie the Kid!
16:55 Yahoo!
16:56 - The anthropomorphic cowboy Twinkie
16:58 became popular among kids for sharing his namesake cakes.
17:01 But growing talk of Twinkie's high-sugar content
17:04 would soon butt heads
17:05 with the brand's kid-friendly marketing.
17:07 First, the Federal Trade Commission
17:09 came down on Hostess for false nutritional claims.
17:12 The agency concluded that sugar
17:14 was the main ingredient in Twinkies.
17:16 And then in '79, the trial of a San Francisco man
17:19 charged with murdering the mayor
17:20 gave rise to the term Twinkie Defense.
17:23 The defense team argued he had diminished capacity
17:26 thanks to his addiction to Twinkies,
17:28 and the murder charges were lessened to manslaughter.
17:31 It was a trial that balked at the wholesome cake brand
17:34 Hostess was trying to build.
17:36 - Fresh, wholesome Hostess meets my top standards.
17:39 So when I say yes, it's Hostess.
17:42 - Then began a string of new owners for Hostess.
17:44 In the '70s, telephone company ITT
17:47 ran Twinkie's parent company.
17:48 In the '80s, the dog food maker Purina acquired Hostess.
17:52 A decade later, it landed under the ownership
17:54 of Interstate Bakeries Corporation.
17:57 The sale created the largest baking company in the US,
18:00 with at its peak 58 factories, over 10,000 delivery routes,
18:04 a boost in Twinkie sales, and $3.2 billion in total sales.
18:09 But in the late '90s, America's changing tastes
18:11 would soon spell trouble for the sugar-packed Twinkies.
18:14 With the growing popularity of low-carb Atkins
18:20 and later the South Beach diets,
18:21 some Americans were becoming more health-conscious.
18:24 Loaded with calories, sugar, and preservatives
18:26 most people hadn't heard of, let alone could pronounce,
18:29 Twinkies became a casualty of the health revolution.
18:33 Sales fell and then flattened.
18:35 In October of '98, because of missed earnings,
18:37 shares dropped 25% in just one day.
18:40 But it wasn't just the product that was the problem.
18:43 Pensions and raw goods got too costly.
18:45 As other food companies were modernizing manufacturing,
18:48 Hostess ran inefficient factories,
18:50 operating at 54% capacity utilization.
18:53 - That's very poor in the manufacturing world.
18:56 - The company also relied on a tired delivery system.
18:59 - A DSC model, direct-store delivery model,
19:01 has really high costs because you've got trucks,
19:03 drivers, gas, insurance that you have to pay for.
19:06 And you're going to every store in America
19:08 every few days to drop off product.
19:09 - Delivery alone ate up 36% of revenue.
19:13 - An important way to capture this moment in time
19:16 would be by filling a national time capsule.
19:19 - In 1999, President Bill Clinton included a Twinkie
19:23 in the National Millennium Time Capsule.
19:25 So Twinkies still had a huge fan base.
19:27 But by then, the damage to Hostess's bottom line
19:29 had been done.
19:30 By 2004, with $700 million in debt,
19:33 Twinkies' parent company, Interstate,
19:35 filed for Chapter 11 bankruptcy.
19:37 Over the next five years,
19:39 Interstate cut 7,000 employees and shut down eight factories.
19:43 The company came out of bankruptcy in 2009
19:45 and rebranded itself Hostess Brands.
19:48 But it didn't work.
19:49 - But unfortunately, many of the legacy problems
19:52 that really hampered the company
19:54 didn't get solved through that bankruptcy.
19:56 - Then the recession took a huge hit
19:58 on Hostess's bottom line.
19:59 With year-over-year sales down 20%.
20:02 To make matters worse,
20:03 a worker strike and labor dispute soon followed.
20:05 - That fight turned into production stopping,
20:08 and the management team then threatened
20:10 to shut the company down,
20:11 given pressure from its creditors.
20:13 And that's exactly what happened.
20:15 - By January 2012, with nearly a billion dollars in debt,
20:19 Hostess Brands filed for Chapter 11 bankruptcy again.
20:22 - The company that makes Twinkies, Wonder Bread,
20:24 and Ding Dongs announced this morning
20:26 that it is going out of business.
20:28 - In November, Twinkies were pulled from shelves,
20:31 and headlines across the country
20:32 reported the death of Twinkies.
20:35 - Customers started, you know,
20:36 honestly losing their minds over it.
20:38 - People who would have never cared about Twinkies, in fact,
20:41 suddenly wanted them, right?
20:42 Or thought, "Oh my God, well, if they're going away forever,
20:44 I need to stock up."
20:45 - The rush was on to grab the last of those tasty treats.
20:48 - People scrambled to get the last Twinkies
20:50 off those store shelves.
20:51 - It was like the death of a piece of Americana.
20:54 - In December 2012,
20:55 Hostess began laying off all its employees.
20:58 Things were looking bad for Hostess,
21:00 but this guy still saw value
21:01 in the nostalgia attached to the brand.
21:03 - There was a real brand here,
21:05 and it's hard to kill a good brand.
21:07 - Andy is half of the duo credited with saving the Twinkies.
21:10 - If you hold people age 20 and over,
21:13 there's 95% brand awareness.
21:15 I mean, it's unbelievable.
21:16 It's not every day that you can buy a brand like this
21:19 that's ubiquitous in consumers' mind
21:21 and has leading market share,
21:23 had a billion dollars in revenues,
21:25 and an 80-year legacy.
21:27 - After the second bankruptcy,
21:29 Andy approached legendary investor Dean Metropolis
21:32 about joining him in rescuing Hostess.
21:34 Dean had turned around...
21:36 - Bumblebee tuna, Chef Boyardee,
21:37 plastic pickles, half-blue ribbon.
21:39 Dean's reputation historically really fit well for this.
21:43 - But unlike the first Hostess bankruptcy,
21:45 in 2012, there was no coming out of it
21:47 with a simple restructure.
21:48 - That bankruptcy process was unique
21:51 because it turned into a true liquidation
21:54 and what's known as a 363 asset sale process.
21:57 - Basically, what was left of Hostess was sold for parts.
22:00 Instead of having to inherit that expensive delivery system,
22:03 underfunded pension plans, and old union contracts,
22:06 Andy could cherry pick what he and Dean actually wanted
22:09 and forget the rest.
22:11 So the two showed up to the 363 asset sale
22:13 ready to fight for Hostess.
22:15 - Not one buyer showed up other than us.
22:18 Anybody could have showed up and talked our bid
22:21 and nobody showed up.
22:22 It was frankly very surprising to me.
22:24 - Andy and Dean purchased Hostess for $410 million.
22:28 Out of the sale, they got the Hostess brands,
22:29 including Twinkie, recipes, and five factories.
22:33 - That's it.
22:34 There was no employees, there was no ingredients,
22:37 there was no inventory.
22:38 And I have to tell you, it was very odd,
22:40 during diligence, walking through the plans,
22:43 where when you walk in, they're empty
22:45 and the person who's walking you through the plan
22:47 has to turn on the lights.
22:48 - And quickly, Andy and Dean got to work fixing the company.
22:52 First, they tackled that delivery system.
22:55 - The old company did direct store delivery.
22:57 We were gonna transform it
22:58 into a distribution to warehouse model.
23:01 Instead of going direct to every grocery store in America,
23:04 you then go to Walmart's distribution centers
23:06 or Kroger's distribution centers instead,
23:08 and then they ship it out to their various stores.
23:11 - But in order to move Twinkies through a warehouse,
23:13 they first had to increase the shelf life.
23:15 Historically, Twinkies only lasted 25 days.
23:19 - People would put Twinkies in their earthquake shelters
23:22 because everybody had this perception
23:23 that Twinkies would last forever.
23:26 That really wasn't the case.
23:28 - Andy and Dean invested millions
23:30 to develop a Twinkie that tasted the same,
23:32 but lasted longer.
23:34 - We're at first able to get the shelf life to 45 days
23:36 and then ultimately to 65 days of shelf life.
23:39 And so that really helped get the retailers comfortable
23:42 that they could take it into their warehouses
23:44 and that the product quality would not be compromised.
23:47 - The new recipe and warehouse delivery model
23:49 helped cut delivery costs by 20%.
23:51 It also meant Hostess could affordably deliver Twinkies
23:54 to drugstores and dollar stores,
23:56 markets they'd never reached before.
23:58 - Dollar General became one of our top five customers.
24:02 - Next up, Andy turned to factory efficiency.
24:05 Andy and Dean wanted to be able to make
24:07 a billion dollars worth of cake yearly,
24:09 but with a ninth of the labor and a fifth of the factories.
24:13 - We ended up doing, getting to 85% capacity utilization plus.
24:16 - Finally, the duo worked on innovating the product line
24:19 with smaller pack sizes and mini Twinkies.
24:22 - Those products really didn't get the resonance
24:24 in the marketplace.
24:25 And so then we just jumped wholeheartedly
24:27 to embrace the brand, embrace what you are,
24:28 which is indulgence.
24:30 - The team had to make all these changes
24:31 in a matter of months.
24:32 In July, 2013, the once dead Twinkies returned to shelves
24:37 to tons of fanfare.
24:39 - The world is a better place tonight
24:40 because Twinkies are back.
24:42 - The tagline was the sweetest comeback
24:44 in the history of ever.
24:45 It all went viral.
24:47 It was really kind of unbelievable.
24:48 - A lot of that, frankly, that excitement and buzz,
24:50 ironically, could have never come about
24:52 if Twinkies never came off the shelf.
24:54 - The trite saying is what?
24:55 You don't know what you've got until it's gone.
24:57 - Twinkies quickly sold out in stores across America.
25:00 - During our first year, we had 555 million in revenue
25:04 from nothing, with profit versions of 27%
25:07 in a company that lost money and had to go bankrupt twice.
25:11 - By 2015, Hostess was making a million Twinkies a day,
25:15 400 million a year, and $180 million in profit.
25:19 At the time, Twinkies made up 80%
25:21 of the company's product output,
25:23 and the success just kept rising.
25:25 In 2016, Apollo and Metropolis took Hostess public.
25:28 The IPO valued the company at $2.3 billion,
25:32 nearly five times what Andy and Dean had paid for it.
25:35 Apollo and Metropolis's gamble,
25:37 that Americans still love Twinkies, had paid off.
25:40 But was the beloved snack revived for good?
25:44 The coronavirus pandemic helped Hostess.
25:47 As people stayed indoors more,
25:49 they bought more processed foods at the grocery store.
25:52 By the end of 2020, the company's net revenue
25:54 had reached a billion dollars.
25:57 And in September 2023, the jelly giant Smuckers
26:00 secured a takeover of Hostess Brands for $5.6 billion.
26:04 Having come back from the brink,
26:07 it seems America isn't ready for a life
26:09 in a post-Twinkie world just yet.
26:11 (upbeat music)
26:14 (upbeat music)
26:16 (upbeat music)
26:19 (upbeat music)
26:22 (upbeat music)
26:24 (upbeat music)
26:27 [Music]