Smucker’s CEO Said Buying Twinkies ‘Tastes Like Growth.’ Three Years Later, It Tastes Like a $5 Billion Mistake.
The jam giant thought it was buying a snack empire. It didn’t realize that Twinkies last 65 days — a small fact that would cause big problems.
In 2023, Mark Smucker, the CEO of J.M. Smucker, paid $5 billion to acquire Hostess, the maker of Twinkies, Ding Dongs and Donettes. To celebrate, he took the stage at an industry conference and bit into a Twinkie. “Tastes like growth,” he said,
Three years later, the Twinkie is giving Smucker heartburn. Snack division sales have declined for six straight quarters, the company has taken nearly $3 billion in impairment charges, and its stock is down 14%.
What went wrong? Smucker’s core products sit on shelves for a year or more. Twinkies last 65 days. That gap created problems with delivery, inventory and spoilage. Smucker also separated grocery and convenience store sales teams even though 40% of Hostess sales run through convenience stores, a channel Smucker barely knew. “It’s just a different route to market,” one analyst told the Wall Street Journal. “I don’t think they were prepared for it.”
In 2023, Mark Smucker, the CEO of J.M. Smucker, paid $5 billion to acquire Hostess, the maker of Twinkies, Ding Dongs and Donettes. To celebrate, he took the stage at an industry conference and bit into a Twinkie. “Tastes like growth,” he said,
Three years later, the Twinkie is giving Smucker heartburn. Snack division sales have declined for six straight quarters, the company has taken nearly $3 billion in impairment charges, and its stock is down 14%.
What went wrong? Smucker’s core products sit on shelves for a year or more. Twinkies last 65 days. That gap created problems with delivery, inventory and spoilage. Smucker also separated grocery and convenience store sales teams even though 40% of Hostess sales run through convenience stores, a channel Smucker barely knew. “It’s just a different route to market,” one analyst told the Wall Street Journal. “I don’t think they were prepared for it.”
