Hostess Brand Inc, maker of Twinkies, Ding Dongs and Ho Ho’s, announced today that it will be shutting down. While this came as a shock to many loyal Hostess customers, the company had been suffering from major problems for years. Management changes, rising labour costs and debt were all contributors to the flat to slightly down sales volume in recent years. However, a lack of investment in marketing or innovation may have played an even larger part in the company’s demise. While competitors developed new snacks and variations of their brands in order to keep up with Americans’ changing tastes towards healthier foods, Hostess snacks remained basically the same. After filing for bankruptcy in 2004, the company needed to reinvent itself. Yet Hostess was unable to change its image as a maker of unhealthy products with suspiciously long shelf-lives. This, combined with union strikes and absurd pay hikes for executives, led the company into such a dire financial state that it was forced to shut down operations.

Hostess failed to develop a strategy that would keep it competitive with the rest of the market. In order for a company to survive, it must continue to innovate and keep up with consumer preferences.

http://news.yahoo.com/twinkie-maker-hostess-reaches-end-line-181830998–finance.html