While the Twinkie's demise nearly came about at the hands of corporate America's machinations, its survival depended on a bankruptcy liquidation that made the 83-year-old brand salvageable, according to a New York Times DealBook analysis yesterday. Its first owner, Continental Baking Company, bought companies left and right in the 1920s, including the Taggart Baking Company, maker of Wonder bread, in 1925. Continental Baking continued its acquisition spree and by 1968 it was a motley assortment of baking brands that fed on America's tastes for sweet and easy food. It was then acquired by Harold Geneen's ITT, a conglomerate that sold not only Twinkies but also munitions. There, the brand sat for 16 years until Continental Baking was sold in 1984 for $475 million to Ralston Purina. By then the baking business had entered a slow growth phase as inflation in baked goods, which had allowed the company continually to raise prices, subsided. Ralston Purina was unable to produce growth in the brands and ended up selling the bakery for about $400 million in 1995 to Interstate Bakeries. Interstate Bakeries was itself a mongrel of many brands put together by serial acquisitions. The company entered bankruptcy in 2004. More than four years later, it emerged, now owned by Ripplewood, which put up $130 million to acquire it. It was then that the company rebranded itself as Hostess Brands. Despite the company's cost cuts, and its reductions in employee headcount by about 10,000, that was still not enough to stave off bankruptcy. Hostess in 2012 filed a plan to liquidate the company and fire almost all its 18,000 employees. Instead of trying to work out a compromise by reorganizing in bankruptcy, the company used the bankruptcy process to escape all its past burdensome debts.
