Saputo pushes Vachon sales in U.S. as Twinkies future remains in doubt

MONTREAL – A Canadian snack cake maker hopes that American fans of Twinkies, Ding Dongs and Ho Ho’s will get their fix by switching to Jos. Louis and May West.

Canadian cheese and bakery products company Saputo Inc. (TSX:SAP) has been making a sales push for its Vachon snack cakes into the Eastern United States for the past year.

“We want to grow the U.S. market and we have started to penetrate the east – Vermont and those surrounding states … that’s what we started a year ago and we are continuing those efforts,” said spokeswoman Sandy Vassiadis.

Hostess Brands Inc., the U.S. maker of Twinkies, and its second-largest union will go into mediation to try and resolve their differences, meaning the company won’t go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week.

Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars.

Meanwhile, Saputo has been trying to expand its U.S. sales as it struggles with lower sales in Canada, caused in part by a change in eating habits away from such calorie-filled treats.

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The Montreal-based company has held the rights to the Hostess brand for decades and makes items such as Twinkies as part of its current lineup of snack cakes. However, the Vachon branded products such as Jos. Louis and May West are much more popular in Canada.

Vassiadis declined to say whether Saputo would be interested in acquiring Hostess as part of its U.S. growth strategy.

The bankruptcy judge hearing the Hostess case said Monday that the parties haven’t gone through the critical step of mediation and asked the lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which has been on strike since Nov. 9, to ask his client, who wasn’t present, if the union would agree to participate. The judge noted that the bakery union, which represents about 30 per cent of Hostess workers, went on strike after rejecting the company’s latest contract offer, even though it never filed an objection to it.

On the Toronto Stock Exchange, Saputo shares gained 41 cents to close at $4.28 in Monday trading.