LENEXA, KAN. — Hostess Brands, Inc. has achieved success in its new product development over the past year as the company leverages favorable snacking behaviors.
In a March Investor Day conference, Hostess Brands said its product launches were focused on engaging new consumer bases through new approaches to packaging, marketing and recipe formulation. This focus appears to have been successful over the year, as the company delivered its 11th consecutive quarter of at least 9% revenue growth and the sixth consecutive quarter of double-digit earnings growth in the third quarter ended Sept. 30.
One of the largest and fastest-growing segments within the company includes indulgent sweet snacking.
“We are attractively priced relative to other snack offerings, providing consumers an accessible option as they look to stretch their shopping dollars,” Andrew Callahan, president and chief executive officer, said in a Nov. 3 conference call with analysts.
Recent introductions to the company’s indulgent sweet snacking category include limited-edition seasonal holiday cakes. Included in the holiday lineup are Hostess Holiday Ho Hos, Hostess Holiday CupCakes, Mint Chocolate Flavored Twinkies and Hot Cocoa & Marshmallow Flavored Donettes.
“With the holiday season right around the corner, consumers are anticipating the return of special flavors that capture the joy, delight and traditions of the season," said Christopher Balach, general manager of Hostess Brands.
Recently, the company conducted a survey to understand how consumers are reacting to the current economic environment. In the survey, Hostess Brands found that while consumers are worried about the economy and have plans to cut back on spending, most respondents said they would continue to look for new snacking options.
“Eighty-two percent say that sweet snacks bring them joy, especially during times of uncertainty,” Mr. Callahan said. “This is consistent with other data and research and reinforces our belief that the Hostess Brands portfolio is well positioned as consumers look for value in the current environment.”
Hostess has since raised its full-year top- and bottom-line outlook, with the company now expecting 2022 net sales to increase by 17% to 19%.