Hostess properties in Utah get new buyers
By dawn house
The Salt Lake TribuneFirst published May 06 2013 07:35AM
Hostess Brands’ assets are being sold piecemeal nationwide in bankruptcy proceedings, with one bidder waiting for approval to take over the bakery in Ogden and another set to reopen several Utah facilities in mid-May, but not under the Hostess name.
For Utah consumers, the move will not result in Hostess snacks and sweets returning to shelves any time soon, but they will see goods from one of the West Coast’s largest bakeries for the first time.
United States Bakery of Portland-Ore., better known as Franz Bakery, has received approval from the U.S. Bankruptcy Count in Manhattan to buy the Salt Lake bakery, five depots and seven stores in the state.
The other firm, Georgia-based Flowers Foods, is waiting for approval to buy the Ogden plant, 19 other U.S. bakeries and several Hostess brands, including Wonder bread. Flowers has declined to detail its plans because of an antitrust review by federal regulators, which could take months to complete.
Prior to November, Hostess had employed about 600 people in Utah at two bakeries, nearly a dozen retail stores and nine depots. Then the company declared bankruptcy for the second time in a decade, resulting in the loss of 18,000 jobs nationwide when a judge approved liquidation and operations shut down.
In Utah, Franz has hired 60 employees, including former Hostess workers. As production ramps up, that number could double by the end of summer, said Rob Robinson, general manager of the company’s Utah and Idaho division.
"This will be our first break into the Utah market," he said. "We’re excited to become a part of the community."
Franz will be producing buns at the Salt Lake bakery and selling fresh, day-old and discount goods at stores in Salt Lake, Midvale, Layton, Provo and Logan. (There are no immediate plans to reopen the store in Murray or the depot and store on North Temple in Salt Lake City.)
Among the products sold will be buns, bagels, breads, doughnuts, cookies and pastries, as well as organic and gluten-free goods.
The bankruptcy court’s deal with Franz included four bakeries, 14 depots and a fleet of vehicles in Utah, Idaho, Washington, Montana and Alaska. Franz also acquired the Eddy’s, Grandma Emilie’s, Sweetheart and Standish Farms brands in a transaction totaling $30.9 million.
Hostess’ primary bread brands have gone to Flowers, which agreed to pay $360 million for the Wonder, Nature’s Pride, Merita, Home Pride and Butternut labels, along with 20 baking plants and 38 depots.
Flowers, a publicly traded company, operates 44 bakeries, with distribution mainly in the East, South and Southwest, as well as certain markets in California. Flowers is one of the nation’s largest producers of packaged bakery foods, with sales of $3 billion. Its top brands are Nature’s Own and Tastykake.
Rob Rogers, business agent in Salt Lake City for the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union, said his organization has a good working relationship with Franz.
For snack lovers, there is hope. Private equity groups Apollo Global Management and Metropoulos & Co. are bringing back Hostess Ding Dongs and other iconic treats. The firms, operating under Hostess Brands, paid $410 million for the snack line.
Hostess Brands expects to begin hiring this month and have its products back on shelves by the end of July.