This episode is sponsored by Wren. In 2012, a box of Twinkies
sold for over $250,000. But, it wasn't just because of
its delicious cream filling. You see, Twinkies were a godsend
to Americans in the 1920s. They saved people from a nuclear war. Despite that, the history of
Twinkies is far from being sweet. <- introducing a second intrigue The company would face many obstacles
including: filing bankruptcy twice, employees striking against them, and much more. What happened to America's beloved sponge cake? To answer that question, we'll have
to take a trip back to Twinkie's incredible history, starting in 1920.. The story of Twinkies begins
with a man and a wagon. James A. Dewar was a wagon driver for
the Continental Baking Company. Every day, he’d drive his wagon,
loaded down with strawberry shortcakes, and make deliveries. For a full decade, he kept up his work
at the Continental Baking Company, moving his way up through the ranks
until he reached bakery plant manager. But his big promotion came just
as the Great Depression began. And in his new position,
James had a realization: They were losing out on potential sales. Every year, the plant’s machinery
ground to a halt when strawberries went out of season, and the expensive
pans used to make shortcakes sat empty. He then realized that if he replaced
strawberries with a banana-cream filling, then they could make shortcakes all year round. So, he did exactly that. The production lines roared back to life,
making the new banana-filled shortcakes. Their now-famous name came from a billboard. While on a business trip, James passed
by a billboard for “Twinkle Toe Shoes”, a name he shortened to Twinkies. James’ new product hit the market at a time
when stores were boarding up nation-wide, and families were losing everything. As cannons boomed in Europe, America’s
soldiers were stationed in Britain and its fleets sailed across the Pacific. America had officially entered the war. Soon after, the U.S. government began rationing a list
of foods in short supply to ensure everyone got their fair share. Among the list was a key
ingredient of Twinkies… Bananas. Without one of his key
ingredients, James took a chance. He replaced the banana-cream
filling with vanilla cream instead. It was a risky move, but
it was his only choice. And luckily for him, it paid off. In fact, the new vanilla filling proved
so popular that even when bananas were available again, Twinkies never went back. Having survived through the Great Depression
and the war, Continental then set out to make Twinkies a central part of American
culture — beginning with pop-culture. Continental cleverly partnered with
one of the first children’s shows on TV, and arguably the most popular
of its time: “The Howdy Doody Show” Not only did the show air ads for Twinkies,
but the host, Buffalo Bob, encouraged kids to ask their moms for the shortcakes. Continental was on top of the world. But like all things in life, what goes
up eventually comes crashing down. Before we continue on the story of Twinkies
, we’d like to thank our sponsor, Wren. If you’ve listened to the news lately,
you may have heard about some of the impacts climate change is having on our
world: specifically, how it has been threatening the future of coffee crops. Wren is a website that makes it easy to keep
track of your carbon footprint, by answering just a few questions about your lifestyle! Wren even lets you offset it by
funding projects to protect the rainforests and plant more trees. Even if you give up driving in favor of
walking, cycling, carpooling, and taking public transit to offset your impact,
no matter how careful we are, everyone’s lifestyle releases some amount of CO2,
contributing to our world’s climate change. Wren will help you discover more about
your carbon footprint, and while no one can reduce their footprint to zero,
you can provide a monthly contribution to offset your footprint and receive
updates on the projects you support! Given the state of the world, you might
want to support their partnered projects to give refugees clean cooking fuel, or
to support indigenous Amazonian groups protecting the rainforest that they call home. Changing the world for a better tomorrow
will take a lot of work, but Wren can help us all learn more about our next steps, today. Offset your carbon footprint on Wren! The first one hundred people to sign up
through our link in the description will have an extra 10 trees planted in their name! The 1960s. The world hangs in the balance of the Cold War. Nations are torn between the Soviet
Union and the United States: East vs. West. And every day, the threat of nuclear war
looms over average people, threatening devastation on a global scale. In these uncertain times, the U.S. government urged citizens to duck and cover
and prepare for possible nuclear attacks. So, many built bomb shelters in
their backyards or under their homes and stockpiled supplies and food. And as they thought about being stuck in
a dark, underground, concrete room for an uncertain amount of time, scared Americans
began looking for food with a long shelf life. And many of them turned… to Twinkies. With their claims to “stay fresh forever”,
and their sweet, fluffy flavor, Twinkies were an inviting golden treat in a dark time. And Continental decided to ramp up
its marketing campaign for Twinkies… Starting with a new mascot. Clad in classic cowboy boots and a 10-gallon
hat, with a heart-covered handkerchief around the neck and his trusty lasso, Twinkie the
Kid had a look that screamed “America”. And that look was soon recognized nation-wide. But Continental had more in store than
just a new mascot, they had also struck a deal with comic giants Marvel and DC. A deal that made sure that Twinkies were
further tied to American pop-culture. Soon, Batman was saving the Twinkies
delivery men from an evil brainwashing plot by the Penguin, Thor was distracting
Gudrun the Golden with golden Twinkies sponge cakes, and Wonder Woman was
catching a thief using Twinkies as bait. Twinkies had become as American as
apple pie, but the man behind them decided that it was time to step down. Forty-two years after he had
created Twinkies, James “Mr. Twinkie” Dewar retired from his position
as vice president of Continental.” Eight years later, Continental was
pumping out Twinkies by the truckload and selling at the rate of 1 billion annually. Soon after Continental caught the
attention of Ralston Purina who bought them out for $475 million. Ralston ran Continental for a total
of 11 years before selling it to Interstate Bakeries for $560 million. Already a giant in the baking industry,
Interstate’s merger with Continental made it the largest baking company in the U.S. However, Interstate would soon learn
that their dominance wouldn’t be enough to save them from what came next… America’s tastes took a drastic
turn: Beach bods and thin waistlines were in, and sugar was out. The growing popularity of diets like
low-carb, Atkins, and South Beach spelled disaster for the sugary treat. Sales were slumping, and soon fell flat
as Americans took issue with an ingredient list full of calories, sugar, and
preservatives that they couldn’t pronounce. Six years later, Twinkies expired. Interstate filed for Chapter 11
Bankruptcy due to decreased sales, increased ingredient and pension costs,
and an inefficient delivery systems. But thanks to one powerful fan rooting
for the company, the company would unexpectedly emerge from bankruptcy. Senator Charles Schumer of New York personally
appealed to a big lender to save Interstate. Ripplewood Holdings paid $130
million to take control of Interstate and renamed it Hostess Brands. Twinkies had just survived the death of their
company, but soon they’d have to do it again… Hostess had just risen from the grave, and
already they were about to fall back in. Within a mere three years of being
created, Hostess brands filed for bankruptcy thanks to its adding debt,
and selling products at a price that didn’t cover costs or return a profit.. And months later, employees
nationwide went on strike. It was over for the reborn Hostess. The company announced that it would lay off
thousands of employees, and sell off assets like Twinkies and other well-known brands. When the news got out, headlines across
the country reported the death of Twinkies. They flew off store shelves. Americans were outraged — even those
who never cared about Twinkies. People raced to stock up before
they were gone forever, and boxes of Twinkies even reached $250,000 on eBay. And as Hostess fell apart, another
powerful fan thought about how to save America’s beloved snack. Andy Jhawar, a senior partner at
Apollo Global Management, saw the value in the nostalgia attached to a part
of American culture like Twinkies. So, he reached out to someone
who had a reputation for reviving classic brands: Metropoulos founder
and billionaire, Dean Metropoulos. Dean was on board, and the two got to work. Fortunately for the two, Hostess went bankrupt
in the perfect way for them to take over. Hostess’ bankruptcy resulted in
a 363 asset sale where a company sells all or part of its assets. This meant that Dean and Andy could buy
what they wanted, like Twinkies, while leaving less desirable assets behind,
like its inefficient delivery system. Even better for them, they
were the only buyers there. Apollo Global Management and Metropoulos
& Company spent $410 million to buy out Twinkies, Hostess’ recipes, and five Hostess factories. Andy and Dean were on track to bring
Twinkies back from the dead, and promised to restock Twinkies that year. Then it was time to get to work. The two improved Hostess’ deliveries and
factories, they expanded the Twinkies product line, and they even extended
the shelf life from 25 days to 65. And that summer, they made
good on their promise. Twinkies hit store shelves
again across the U.S. alongside a viral “The Sweetest Comeback
in the History of Ever” ad campaign. Customers flooded in, snatching them up. Twinkies sold out overnight — bringing
in $555 million in revenue. Success was sweet. Andy and Dean successfully revived Hostess and
the company began making a million Twinkies a day, bringing in $180 million in profit. Then, only one year later,
the two took Hostess public. The company was valued at $2.3 billion — nearly
five times what the two had paid for it. .
Today, Twinkies is recognized as an
American icon, and sales continue to rise. With the COVID-19 pandemic, more people
have been eating at home, once again finding a little extra comfort in a
dark time with their favorite snacks. This is the story of how a wagon driver
invented a snack that became an American icon, and claims that it would stay
“fresh forever” made it a common sight in bomb shelters across the country. This is the story of Twinkies. For more stories about the world’s
biggest brands, subscribe to Hook and ring the bell so you never miss an episode.
