Twinkie maker in trouble again

NEW YORK (AP) - Just like many Americans, the maker of Twinkies, Sno Balls and Wonder Bread is trying to lose the fat.

Hostess Brands is hoping to take a bite out of its high costs as it heads back into bankruptcy protection for the second time in less than a decade.

Hostess has enough cash to keep stores stocked with its Ding Dongs, Ho Hos and other snacks for now. But longer term, the 87-year-old company has a bigger problem: health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago.

Last year, 36 percent of Americans ate white bread in their homes, down from 54 percent in 2000, according to NPD Group. Meanwhile, about 54 percent ate wheat bread, up from 43 percent in 2000.

Consumption of healthy snacks is growing, too. About 32 percent of Americans ate yogurt at least once in two weeks in 2011, for instance, up from 18 percent in 2000.

"We're less likely to be snacking on items that we shouldn't be snacking on," said Harry Balzer, chief industry analyst for The NPD Group, a consumer marketing research firm.

Hostess, which is a privately held, doesn't disclose sales figures. But analysts say the iconic brand has been hurt by Americans' changing eating habits.

To be sure, Hostess' snacks don't neatly fit into the U.S. trend toward a healthier lifestyle that includes a diet rich in whole wheat foods, fruits and vegetables.

Hostess has other problems, too.

In Hostess' Chapter 11 filing on Wednesday, the company said its rivals have combined and expanded their reach, heightening competition in the snack space.

Additionally, Hostess employees are unionized while most of its competitors aren't. As a result, Hostess has high pension and medical benefit costs. The company has 19,000 employees and operates in 48 states.

Upcoming Events