Candy Industry Blog

Reading 2012 tea leaves

January 11, 2012

As we plunge into the second full week of 2012, freed of holiday burdens and buoyed by resolutions, it’s tempting to speculate what the winds of fortune will bring to us all. And while there are plenty of stats regarding election-year tendencies, all I can say is there’s one editor who will be happy once the campaigning concludes come Nov. 6.

Personally, I always enjoy getting a “read” on the year by scanning news events, a reporter’s barometer so to speak, of what lies ahead. Naturally, this barometer is even more suspect than the local weather forecast ― reportedly snow is finally coming to Chicago amidst one of the mildest starts to winter in a long time ― but I’m sticking to my instincts based on the following two stories: Hostess Brands bankruptcy filing and Union Confectionery Machinery’s centennial celebration.

As some of you may know, previously to joining Candy Industry, I was editor of Snack Food and Wholesale Bakery, a sister publication. And if one turns back the clock even further, I covered the wholesale bakery beat for Bakery Production & Marketing, the one-time “Bible” of the U.S. baking industry. Hence, there’s a soft spot in my heart for news about bakery operations and bakers, who lovingly refer to themselves as “dough heads.”

During the late 1980s, I had the opportunity to visit Interstate Bakeries, now dubbed Hostess Brands, and actually see Twinkies and Hostess snack cakes being produced. As any of you in operations know, visiting a food manufacturing facility, be it a bakery, confectionery plant or meatpacking facility is always a fascinating experience.

And despite the various urban myths regarding Twinkies ― super long shelf life, nuclear attack resistant ― there’s nothing really spooky about them. The sponge cake products are actually baked and last about a month before becoming stale.

The issue at stake here, however, is not about urban myths; rather, it’s whether Hostess Brands can resuscitate its operation and continue producing this iconic American brand. Hey, whether you like Twinkies or Hostess Cupcakes or not, I for one would hate to see Hostess Brands products disappear from our CPG landscape.

The issues at stake involve monies due to worker pension funds, increased flexibility in union work rules, medical benefit obligations, a more competitive environment and tough economic times.

Brian Driscoll, president and ceo of Hostess Brands, reasserts that the “…company has tremendous potential if we can remove the barriers to success.”

None of the challenges mentioned will be easy to address, but I trust that all parties involved will come to a reasonable solution to ensure Twinkies and other Hostess Brands’ products are available for generations to come.

Which leads to me to the second news story that crossed my desk, or rather screen: Union Confectionery Machinery Co. will celebrate its centennial this year.

As most of you know, I love celebrations, often at a drop of a hat, party hat, that is. This one, however, is special, given the Greenbergs’ unwavering commitment to and involvement with the confectionery industry.

When I joined Candy Industry, Jim Greenberg was one of the first to reach out and help me better understand who’s who in the industry and what’s what. He’s also been a strong and tireless support of our Kettle Committee, following the legacy left by his father, Arthur.

Not only have I always been impressed with Jim’s encyclopedic knowledge of the industry, but even more so with his sincerity in helping budding artisans, entrepreneurs and professionals trying to get a foothold in the industry.

As he’s often told me, the payback isn’t necessarily financial or immediate, but it’s truly rewarding. No doubt, that explains in part why the company has managed to stay in business 100 years.

The new generation, which comprises, Jim, his brother John, and cousin, Andy, have had their set of challenges operating and competing in a global economy. They, better than most, understand what happens to companies that don’t have a strong financial foundation or veer away from their core business.

But credit the younger generation for finding a way to embrace technology to broaden their services while containing their costs, a critical factor to success today.

So what’s the connection between these two news items and what lies ahead in 2012? Simple. There are no guarantees about success, even if you have an iconic brand or brands. Companies large and small must adapt and react accordingly, be it expanding into a new segment, such as Barry Callebaut’s recent acquisition of La Morella Nuts, or separating operations to improve focus, such as Kraft Foods.

Hey, I realize these are multinationals, but the rules still apply. Hence, look for companies to fine-tune their operations and pounce on opportunities in the marketplace with greater speed, be it through acquisitions, consolidation or new market penetration.

One last thing, for 100, you don’t look a day over 45, Jim.

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