Ex-Hostess stores open under the Franz Bakery label
Bakery goods » Now sold in Utah at Smith’s, Walmart, Costco, other chains.
By dawn house
| The Salt Lake Tribune
First Published Jul 17 2013 09:04 am
Last Updated Dec 07 2013 11:35 pm
For the first time, Utahns may buy bakery goods sold in the Northwest since 1906 at retail outlets once operated by the former Hostess Brands company, sold as part of bankruptcy action.
United States Bakery of Portland, Ore., better known as Franz Bakery, received approval from the U.S. Bankruptcy Court in Manhattan to buy the Salt Lake bakery, five depots and seven stores in Utah as well as facilities in Idaho, Montana, Washington and Alaska. The $31-million deal also included the purchase of Hostess’ Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s brands.
Franz recently reopened five former Hostess retail outlets in Salt Lake, Cache, Davis and Utah counties, selling fresh and day-old goods under its own labels. Products include bagels, pastries, donuts, breads, buns and cookies. The stores also will carry gluten-free and organic lines.
The Salt Lake bakery has reopened and is making buns. (The Salt Lake City store on North Temple has been closed and plans for the Murray outlet have not yet been decided.)
With the brand’s introduction in Utah, the company also struck agreements to sell its bakery goods at Smith’s Food & Drug, Walmart, Costco, Winco, Ridley’s and Reams.
About 110 people staff the Utah facilities, including many former Hostess workers.
Wages at Franz for entry-level jobs are about $17 per hour, plus benefits. In Seattle, a June advertisement indicated that an entry-level worker could earn from $13.95 to $19.95 per hour.
"We could pay a minimum wage but that’s not what we do," said Rob Robinson, Franz general manager. "We pay workers a decent living wage, and around 97 percent of our employees receive benefits. We want great people who will give great service. We want to be a part of the community, we want to give back. It’s the heart of who we are."
Hostess had employed about 600 people in Utah who were among the 18,000 laid-off nationwide due to the bankruptcy.
As part of the bankruptcy proceedings,Georgia-based Flowers Foods recentlyreceived approval to buy the former Hostess Ogden plant, 19 other U.S. bakeries and several Hostess brands, including Wonder bread, for $360 million. The transaction awaits final approval before those operations will resume.
The best known Hostess brands, Twinkies, Cup Cakes and Ho Hos and five bakeries went to private equity firms Metroupoulos & Co. and Apollo Global Management in a $410 deal.
About one-quarter of the former Hostess workers will end up returning when all the brands are up and running again, according to estimates by Natalie Everett, a bread and snack industry analyst with IBISWorld. That’s because companies typically invest in equipment and machinery to replace laborers, Everett told CNNMoney.
The Franz story began in 1897 when 15-year-old Engelbert Franz, wrote to his uncle, who owned United States Bakery in Portland, asking for passage to travel from Austria to Oregon. The boy worked for his uncle for eight years, repaid the loan and sent for his brother Joseph.
In 1906 the two brothers bought a small bakery, and within two years they were able to strike a deal with their uncle to purchase United States Bakery. That became the brothers’ corporate name. The plant became known as Franz Bakery.
Today, Franz supplies baked goods to virtually all of the fast-food restaurants, 80 percent of restaurants and nearly all the area grocers in the Northwest, say company officials. Products are marketed under the individual bakeries’ names, as well as brands such as Bay City, Seattle International, McKenzie Farms, Svenhard’s, and Aunt Katie’s.
Franz employs about 3,000 people in Alaska, Idaho, Montana, northern California, Oregon, Washington, Wyoming and Utah. The family-owned company, which is privately held, does not release sales figures.