Nostalgia Powers Brand

Hostess brands has been rescued from bankruptcy by various investors, to the tune of $800m+.  Now I'm sure a portion of that amount values the fixed assets such as the bakery equipment or premises, but most would be in the IP of the recipes for the products and in the value of the brands themselves.  The buyers of these intangible assets no doubt believe that resurrecting Twinkies will yield profits.  They probably can also point to steps to better manage costs, improve distribution, etc.  And they may believe they can do a better job of marketing this collection of snack brands and bakery products to the American consumer.  They may look at the consumer outcry when Hostess stopped production and Twinkies left the grocery shelves as a sign of pent up demand - 'thars gold in them thar hills'.

And here lies the danger.  In the current environment of concerns over escalating youth obesity, are parents likely to flock back to a brand which, until the demise, many had eschewed from their kids lunchboxes anyway?  Will a 'low fat, low carb, low cal' Twinkie appear on the horizon, attempting to get in step with trends towards healthier eating?  Or will the new owners say 'sod it', and like Hardees and other brands stick to their core business plan by producing a high caloric product to sell to the largely health ignorant masses?

Whatever the case, it's interesting when looking at this mix of brands the role of nostalgia in the valuation of the brand.  And how when something is taken away, the nostalgia rises to the surface.  No doubt the re-introduction of Twinkies to the grocery shelf will spark another sales rush as consumers gobble those missing calories in a carb eating frenzy reminiscent of a failed Atkins dieter.  And we'll probably have tweets about how Twinkies taste different, taste better, taste the same.  Yet once the flurry subsides, will these same consumers come flooding back to the brand, on a regular basis, once the product reestablishes itself on the shelves?



I think nostalgia can only carry you so far in the world of branding.  Although venerable brands like Harley or Cheerwine have leveraged the nostalgia card to the hilt, they also recognize that you need to keep in step with consumer demands.  Harley may still have the trademarked 'growl' of the engine as a hallmark to the past, but the models reflect current market desires in performance and styling.  Cheerwine harkens to it's roots in 1917 as the 'Nectar of North Carolina' but also produces a diet version and a caffeine free version which would have never been imagined in the 1920s and 1930s when the brand was gaining traction in the South.

So to the new owners of the Twinkie, Ho Ho, Ding Dong, and Wonder Bread, I wish you well.  Leverage the power of your brand to those who remember it, but look at how it needs added dimensions to appeal to the next generation of consumers.