The maker of Twinkies, Ring Dings and Wonder Bread has gone stale
Interstate Bakeries Corp. filed for Chapter 11 bankruptcy protection Wednesday blaming, in part, the low-carbohydrate diet phenomenon, along with rising wage and benefit costs and the high price of ingredients, gasoline and electricity.
Interstate, the nation's largest wholesale baker with 32,000 employees nationwide, including more than 400 at a plant in Jamaica, filed for protection from its creditors in federal bankruptcy court in Kansas City, Mo.
'Carb diet awareness is certainly a factor in their poor sales performance,' said food-industry analyst Mitchell Pinheiro, with Janney Montgomery Scott in Philadelphia, who attributed Interstate's difficulties to lack of innovation and business strategy execution. ' ... They've had a poor sales performance for the last seven or eight years -- long before Atkins came around.'
For now, there's no need to hoard cupcakes or stock up on Yodels. Said Interstate spokesman Jason Booth: 'The future of the Twinkie is safe and sound.'
Under Chapter 11 a company continues to operate while it develops a plan to repay its debts.
The baker, which said it had more than $1.3 billion in debt, will have to trim the fat, experts said, and that could include layoffs, plant closures, or divesting a brand or two.
Indeed, brands such as Wonder bread may not be as durable as others, since consumers have a dozen other bread brands to choose from, some analysts said.
Saint Albans resident Gregory Truett agreed. The 19-year-old was at Interstate's bakery outlet in Jamaica Wednesday, searching for Hostess orange cakes. He said he wouldn't mind if the Wonder brand disappeared, but eats Twinkies 'almost every day.'
Booth said there were no immediate plans for further layoffs, but did not discount the possibility. The Kansas City-based baker hired turnaround specialist Antonio Alvarez as its chief executive.
'In the next weeks or months, the company will be looking more closely at its cost structure, to try to evaluate where things can be streamlined and efficiencies can be improved,' he said. 'How that will be done has not yet been determined.'
But that uncertainty left area employees nervous.
'I still worry because we're not out of the red,' said one Queens bakery outlet clerk who declined to give her name. 'They pay good money, with good benefits. I don't know what's going to happen.'
At the Jamaica plant, employees remained generally upbeat, saying it was 'business as usual' inside. Managers there refused to comment.
About 80 percent of Interstate's U.S. work force is unionized. Those in Jamaica are represented by Local 50 of the Bakery, Confectionery and Tobacco Workers International Union, but president Joyce Alston did not return calls for comment.
Interstate's stock fell $1.22, or 37 percent, to close at $2.05 on the New York Stock Exchange.
Interstate, the nation's largest wholesale baker with 32,000 employees nationwide, including more than 400 at a plant in Jamaica, filed for protection from its creditors in federal bankruptcy court in Kansas City, Mo.
'Carb diet awareness is certainly a factor in their poor sales performance,' said food-industry analyst Mitchell Pinheiro, with Janney Montgomery Scott in Philadelphia, who attributed Interstate's difficulties to lack of innovation and business strategy execution. ' ... They've had a poor sales performance for the last seven or eight years -- long before Atkins came around.'
For now, there's no need to hoard cupcakes or stock up on Yodels. Said Interstate spokesman Jason Booth: 'The future of the Twinkie is safe and sound.'
Under Chapter 11 a company continues to operate while it develops a plan to repay its debts.
The baker, which said it had more than $1.3 billion in debt, will have to trim the fat, experts said, and that could include layoffs, plant closures, or divesting a brand or two.
Indeed, brands such as Wonder bread may not be as durable as others, since consumers have a dozen other bread brands to choose from, some analysts said.
Saint Albans resident Gregory Truett agreed. The 19-year-old was at Interstate's bakery outlet in Jamaica Wednesday, searching for Hostess orange cakes. He said he wouldn't mind if the Wonder brand disappeared, but eats Twinkies 'almost every day.'
Booth said there were no immediate plans for further layoffs, but did not discount the possibility. The Kansas City-based baker hired turnaround specialist Antonio Alvarez as its chief executive.
'In the next weeks or months, the company will be looking more closely at its cost structure, to try to evaluate where things can be streamlined and efficiencies can be improved,' he said. 'How that will be done has not yet been determined.'
But that uncertainty left area employees nervous.
'I still worry because we're not out of the red,' said one Queens bakery outlet clerk who declined to give her name. 'They pay good money, with good benefits. I don't know what's going to happen.'
At the Jamaica plant, employees remained generally upbeat, saying it was 'business as usual' inside. Managers there refused to comment.
About 80 percent of Interstate's U.S. work force is unionized. Those in Jamaica are represented by Local 50 of the Bakery, Confectionery and Tobacco Workers International Union, but president Joyce Alston did not return calls for comment.
Interstate's stock fell $1.22, or 37 percent, to close at $2.05 on the New York Stock Exchange.
