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Published: 8/14/2013 - Updated: 8 months ago

Return of Wonder, Hostess brands to region uncertain

BY JON CHAVEZ
BLADE BUSINESS WRITER
Flower Foods Inc., the new owner of the shuttered Hostess Brands Inc. bakery in Northwood, is not sure whether it will reopen. Flower Foods Inc., the new owner of the shuttered Hostess Brands Inc. bakery in Northwood, is not sure whether it will reopen.
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Wonder Bread and other popular Hostess bread brands will return to some retailers’ shelves this fall, the new owner of those brands said this week.

But when, or if, Wonder, Home Pride, Nature’s Pride and other Hostess brands will once more occupy the shelves of stores in Toledo and northwest Ohio is uncertain.

Even less certain is whether the former Hostess Brands Inc. Bakery in Northwood will reopen at all. The bakery, which had 160 workers, closed in November after Hostess Brands filed for Chapter 7 liquidation following a dispute with its unionized workers.

Since then, other companies used a court-approved auction process to acquire most of the assets of Hostess, including its various bread and baked goods brands and its baking facilities.

Wonder, Home Pride, Nature’s Pride, Merita, and Butternut bread brands were acquired for $355 million by Flowers Foods Inc. of Thomasville, Ga., which had its own brands and bakeries.

The company also acquired 20 bakeries, including the Northwood facility, along with 36 distribution warehouses that belonged to Hostess.

Flowers Foods, the second-largest baking operation in the country, received federal regulatory approval to acquire the bread brands on July 8, and it completed its purchase on July 22.

On Tuesday, Allen Shiver, the company’s president and chief executive officer, said some consumers could expect to see Wonder and other Hostess brands return to store shelves this fall, most likely in October.

But he also indicated that Flowers Foods would be very deliberate in rolling out the Hostess bread brands — which have been off the market since Nov. 16.

Mr. Shiver said that the bakeries the company purchased likely would be reactivated only if demand warranted and some of the 20 facilities might never reopen and could be sold.

“We plan to reintroduce the brands in a way that will enhance consumer choices, strengthen the overall category for retail customers, build our distributors’ business, and, of course, positively impact the Flowers Foods’ bottom line,” Mr. Shiver told analysts on a conference call after the company reported its quarterly earnings.

“Our plans to reintroduce new brands across markets served by our [direct store delivery] system are being finalized for this fall. We have good indication that our retail customers are excited about supporting our reintroduction of the brands,” he said.

The 20 bakeries “are strategically located across the country. One of the questions we often hear is when will we reopen the Hostess bakeries? At this point, we’re able to meet consumer demand through our existing bakeries. We’re confident that consumer demand will increase as we reintroduce the Hostess bread brands. As we need additional production capacity, we plan to reopen bakeries,” Mr. Shiver said.

As part of Flowers Foods’ strategy, the company plans to return Wonder and other brands to shelves at first only in the markets it serves with its own bakeries. The company’s nearest bakeries to Ohio are in Oxford, Pa., southwest of Philadelphia, and Bardstown, Ky., south of Louisville.

Keith Hancock, a Flowers Foods spokesman, said the company plans to produce its Hostess bread brands at its existing bakeries and move product as far as it can and still retain freshness.

“The way we’ve typically grown is through market expansion off of our existing territory. ... We grow from our existing footprint outwards,” Mr. Hancock said.

Mr. Shiver said Flowers Foods plans to “continue to enter new markets.” Toledo is considered a new market, Mr. Hancock said, but Flowers Foods’ plans for northwest Ohio are uncertain.

“We fully realize that from a national brand standpoint, these are well-known brands. They have strong following, and we hope we can reintroduce these to folks as soon as possible,” Mr. Hancock said.

Additionally, the Northwood bakery likely will not reopen until demand warrants. “We’ll build our sales volume from existing clients. When sales volumes are acceptable, then we’ll reopen the bakeries in those markets," Mr. Shiver told analysts.

“From our standpoint, we hope that demand increases to the point that we need them,” Mr. Hancock said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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