Rabobank Report: The Return of the Twinkie – Naughty but Nice?

Four ‘Twinkie Takeaways’ - Lessons for the Snack Cake Market

NEW YORK--()--The Twinkie is back! At a time when consumer trends are supposedly dominated by the pursuit of all things fresh, natural and organic, the Twinkie is set to return to supermarket shelves this summer.

A new report from Rabobank focusing on the relaunch of the Twinkie identifies four lessons that also extend to the wider snack cake market: the strength of iconic brands such as Twinkie; consumer recognition that there is room in our diet for a little fun and indulgence; the dangers in tampering with a winning formula; and the opportunities to continue expanding the snack cake market.

“When the maker of Twinkies, Hostess Brands Inc., was forced to close in November 2012, many commentators put it down to the unstoppable trends of the ‘real food’ movement,” explains Rabobank analyst Nicholas Fereday. “However, the company’s snack cakes businesses, Hostess and Dolly Madison, were quickly snapped up by private equity firms in early 2013, and after just nine months Twinkies are back on the shelves.”

Rabobank identifies four lessons – or “Twinkie Takeways” – about the return of the Twinkie that also extend to the wider snack cake market :

1. Twinkie Takeaway 1 - Iconic brands have a long shelf life. In an age where the private label is stealing market share from brands, the market for Twinkies is not in doubt. The reasons? An iconic brand and loyal customer base.

2. Twinkie Takeaway 2 - We never said we were healthy. Twinkies have never pretended to be healthy, and that’s just fine with most people. While health is a key trend in the baked goods sector, so is indulgence – around 60% of the population view snacks as an opportunity to splurge, preferring what tastes good rather than what is healthy.

3. Twinkie Takeaway 3 - Don’t pimp my Twinkie! Twinkies are iconic for a reason. They have stoically withstood the changing times as consumers cycled through low carb, low fat, and high-protein phases. Changing the recipe to fit popular dietary trends may only backfire.

4. Twinkie Takeaway 4 - Cutting a bigger slice of a larger cake. Marketing innovations from candy manufacturers and the successful takeover by Flowers Foods of TastyKake suggest there are plenty of strategies to continue expanding the snack cake market. Snack cakes also play well to the new snacking culture in terms of portability, convenience and affordability.

According to Rabobank, these four ‘Twinkie Takeways’ suggest a positive outlook not just for Twinkies, but for the snack cake market in general.

Rabobank’s report on lessons the snack cake market can learn from the Twinkie is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America,

Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.rabobank.com/f&a

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Contacts

Rabobank
Media
Lynne Burns, (212) 808 2581
lynne.burns@rabobank.com
or
Analyst
Nicholas Fereday, (212) 916 3793
nicholas.fereday@rabobank.com

Release Summary

Rabobank says return of Twinkie offers 4 lessons - Twinkie Takeaways - for snack cake market

Contacts

Rabobank
Media
Lynne Burns, (212) 808 2581
lynne.burns@rabobank.com
or
Analyst
Nicholas Fereday, (212) 916 3793
nicholas.fereday@rabobank.com