What's wrong with Hostess? Depends. What's the Real Menu?
This company, like many others, is simply in the final stages of a long-term plan for liquidation. When you can't jack up profits by moving operations overseas, using illegal or H1B labor, automating, or "restructuring" by converting high-labor/ high-risk operations over to paper subcontractors, then you liquidate the physical operation and license off the brand name. Note that Mexican baker Bimbo has been moving into increasingly Anglo/ mainstream brands in USA. Just as with Asian automakers, these owners are still willing to pay whatever wages necessary to gain marketshare in North America (although often non-union).
I suspect this type of move makes sense to investors who have made that transition from interest in making a certain product to purely making money. If you no longer care, or never cared, about what product your invested-in company(s) make, then it must really screw with your head to see your capital tied up in an operation that will never match Apple, Amazon or Google. So how do you cash out? Maybe the owners, major stockholders that is, decided there was no way to make baked goods as profitably as downloadable media content, so get rid of the obligations to workers implied in making a physical product and just sell the image. Let someone else worry about the labor, quality, fuel costs for delivery trucks. In a way, maybe this is really their attempt to re-imagine processed foods along the same lines Coke and franchisors have organized their game: manage the recipe, quality control, and advertising, farm out the rest to local distributors. This may give them the flexibility to scout for distributors/ local bakers around the world without having to actually employ mere labor in those new territories. Maybe they can even shop for more brands to manage. Food as intellectual property. That should be worth a certain stock boost, at least for a while.
If it works, should this spread to others in the food business? Has it already done so, without as much bad press?
The bigger story is this: the developed economies can only grow at a certain rate, possibly two percent long term, while the US investor class is still thinking they should expect investment returns of 7 to 8 percent. This is a historical artifact of our own "developing resource economy" stage, the part now being played by (for instance) Brasil. This can only be sustained by artificial means: asset-stripping foreign economies (AKA colonialism), or our domestic economy ("domestic colonialism"?). We could probably sustain four percent if we were to consciously develop the combination of sustainable infrastructures plus practical space industries (mining near-Earth asteroids, yes; grandstanding manned missions to Mars, no, or not yet). Possibly the sets of technologies included in the trans-humanist movement, if we made it a point to extend the benefits of such technologies to the general population, as a form of democratic socialism appropriate to the 21st century. But all three of these areas will only make sense if seen through the lenses of peak oil (and other resources, especially phosphorus), plus greenhouse gas- induced climate changes.
The US is not a young country anymore, and we need to restructure our economy and culture for long-term sustainability. For many, that will look like "socialism", and will seem anathema. Reality and thermodynamics doesn't care about labels, only whether we adapt.
