Hostess Transforms For A New Generation Of Social Snackers
With a marketing strategy that zeros in on Millennials and puts social media front and center, SVP/CMO Burke Raine has helped Hostess restore its leadership position in the tasty treats space.
In 2012, panic broke out among snack-cake fans with the announcement that Hostess was headed for bankruptcy, and its iconic brands, including Twinkies and Ding Dongs, would be leaving store shelves.
Their devastation was short-lived. A year later, the company was acquired by two investment firms with a shared history of corporate turnarounds. This time was no exception, and Hostess has once again become a leader in the snack and cake-treat categories.
Helping to rejuvenate the company and its brands is Burke Raine, who joined Hostess as senior vice president and CMO in March 2016. The marketing veteran’s years at Diamond Foods, PepsiCo, and General Motors have helped to shape the company’s marketing strategy, which relies heavily on social media and targeting Millennials.
Raine recently spoke to CMO.com about new campaigns, digital media, and, of course, Twinkies.
CMO.com: You’ve had a storied career. What interested you about joining Hostess?
I’ve been selling snacks for a decade, and you see consumer trends increasingly favor snacking throughout the day over traditional three-square meals. It’s fast-paced, it’s high-growth, and I knew the back story of Hostess. I knew how this beloved American brand had struggled for a number of years through bankruptcy, finally into a Chapter 7 liquidation, and then had been resurfaced and relaunched under a private equity. I thought that was a really interesting combination.
CMO.com: How do Hostess’ past problems and then its revival play into the challenge of the job? Any misconceptions?
Raine: I think there are still people today out there who don’t know that the company is back. I tell them I work for Hostess and they say, “Didn’t Twinkies go off the market?” So that is a headwind that we faced, that the bankruptcy and liquidation was so well-covered and so prominent in people’s lives that when the company went away, people were crestfallen and figured that was the end. Now that we’re back, our obligation is—from a marketing standpoint—to not only get the news out that Twinkies are back, but also to promote the huge pipeline of innovation that the new company has created in addition to all of your favorite legacy products.
CMO.com: Let’s look at some of that innovation. There’s a Twinkie Cappuccino, ready-to-heat Deep Fried Twinkies, and a series of ice cream products. What have you done on a marketing level to get the word out about these?
Raine: We use social media at the forefront of our advertising initiatives, and we’ve reconstituted our social media strategy. Over the past year, we’ve hired a new agency that brought a lot of energy and a lot of creativity to the table. It’s hard work, but we’re out there posting every day. We’re engaged with our consumers online.
CMO.com: How much of marketing today is traditional media—using TV, radio, print? Or has digital media completely taken over?
Raine: I think there is still a role for traditional media. What I would tell you is, depending on who your target audience is, it is either a viable or increasingly less viable opportunity. Younger consumers have significantly walked away from a lot of traditional media sources. The marketing community knows that the only way to reach a Millennial on television anymore is at a live event, something that you can’t DVR and come back to later, at least if you want to be part of the conversation that’s going on around the event. So if it’s an Oscars or Emmy’s or Super Bowl, you can still reach a huge target with a lot of eyeballs and a lot of young people, but you know, rates for media during those types of programs have just gone through the roof. … If you have a young target, social media is a much more viable path to opening up a dialogue with consumers that actually comes across as credible.
I think there are still, to this day, brands that look at social media as if it were traditional, like a traditional broadcast medium, where they’re essentially running on their social feeds what amounts to print ads or TV ads. Social media is a dialogue, not a monologue, and when we do it right, it’s an incredibly powerful tool.
CMO.com: Can you provide an example of something you’ve done with social media that’s showing big promise?
Raine: It’s actually kind of funny because it doesn’t seem like something that would be all that complicated. We have product giveaways for answering a variety of questions. We create a dialogue among our communities with the prize being to win a pack of Hostess gifts. It’s not a huge dollar amount that people win, but people really get excited for it, which is fantastic. It speaks to the power of the brand and how beloved the products are, and what we’ve found is that we’re able to create engagement rates many times larger than CPG average just by getting a fun dialogue going within our communities for a chance at one of our prize packs.
CMO.com: Who is the Hostess customer today you’re trying to reach?
Raine: Our big advertising push right now is to continue to contemporize the brand among younger consumers. Interestingly, for a consumer package goods company, especially one that sells food like Hostess does, young families with kids represent a significant uptick in food purchases, so it’s important for us to bring those consumers into our portfolio. Those consumers are increasingly Millennial. Eighty-three percent of new moms in this country are Millennial moms. So it is important for Hostess to talk to Millennials, to resonate with them, and show them all the great products we have to offer.
CMO.com: What sort of campaigns can we expect to see from the company this summer?
Raine: We’ve got some exciting stuff coming out. We had a partnership with the American Red Cross that we did around Memorial Day. We have a very large partnership with Sony Records, Spotify, and the Country Music Association featuring Brad Paisley that will be coming out this summer. We’re also working with Chuck E Cheese around a promotion for back-to-school. We’ve been very busy.
CMO.com: What are the biggest challenges in the industry as far as Hostess is concerned?
Raine: I think our biggest challenge is that we’ve got more good ideas than we have wherewithal to execute everything. So how do we create and continue to craft the culture that continues to deliver the entrepreneurial steed that makes this company so fantastic? I think as we get bigger, how do we continue to move even more aggressively and fast?
CMO.com: How about the industry as a whole?
Raine: For the broader food industry from a macro-economic standpoint, I do think you see a bit of a bifurcation in the industry. There is good growth in premium. There’s good growth in indulgent products. People who find themselves stuck in the middle, who haven’t kind of decided what they want to be, I think it’s more challenging for [them].
CMO.com: What would you say is the story of Hostess in a 2017 world?
Raine: I think there is a wonderful kind of combination of an iconic brand with an entrepreneurial culture that we’ve been very successful with. I think it’s one of the reasons why our IPO went so well. It’s one of the reasons why our market share improvements are what they are, and it’s something that we hold near and dear that we want to continue.
CMO.com: What is your outlook for the year ahead? Any new mouth-watering products on the horizon?
Raine: I think we have a growth culture at Hostess. We’ve got really good people. We’ve got a ton of creativity, and I’m very optimistic about our future. We’ve got a lot of innovation that’s hitting the floors currently with a new chocolate cake Twinkie. We have a fudge-covered Twinkie. We’ve got an apple coffee cake. We’ve got our first-ever white fudge Ding Dong. We’ve got our first-ever peanut butter HoHo. It’s a very busy, very exciting time for Hostess.