Hostess Brands Files For Bankruptcy

It is a sad sad day for the 'ding dong'.   Hostess brands has filed for Chapter 11 bankruptcy for the second time. I grew up eating the 'twinkie' (no pun intended).

The privately held Irving, Texas, company, which employs roughly 19,000 people and carries more than $860 million in debt, has been facing a cash squeeze amid high labor costs and rising prices for sugar, flour and other ingredients, according to people familiar with the matter. Those costs together have proved higher than the company's roughly $2.5 billion in annual sales, creating losses and cash shortfalls, the people said. Hostess also owes more than $50 million to vendors, which have been demanding payments on shortened time frames because of Hostess's financial condition, one of the people said. Most of those goods and services were provided to Hostess within the past three weeks or so.

I understand with the rise in the cost of ingredients and also most families are not able to splurge as much on such things as sweets.  The food budget is getting tighter by the day.  I predict that this will be the first of several food companies we see hit hard times in the coming months.

via JMG