McKee ramps up amid Hostess' fall

Nutty Bars from McKee Foods Corporation

McKee Foods Corp. is gearing up to bake more snack food as key competitor Hostess Brands plans to turn off its ovens for good.

Hostess, maker of Twinkies and Wonder Bread, announced Friday that it intends to wind down operations, which could mean more business for Collegedale-based McKee, maker of Little Debbie snacks.

"We'll likely see an increase in orders," said Mike Gloekler, corporate communications manager for McKee.

While the holidays usually mean a little drop in business for McKee compared to the rest of the year, the company is preparing for less of a slowdown this year or none at all, he said.

"That would mean more work for existing employees," he said, adding he's not sure if more workers would be hired.

The mood isn't so upbeat at a Hostess distribution facility that's closing in Ringgold, Ga. About 25 employees went through their last day on the job Friday, said employee Jamey Ferguson.

"We're all reminiscing and talking about our futures," he said.

McKee employs about 2,600 people in Collegedale and more than 5,000 workers nationwide. Gloekler put annual sales at about $1.2 billion.

Texas-based Hostess' annual sales are estimated at about $2.8 billion, according to Snack Food & Wholesale Bakery magazine. Jeff Heath, the magazine's publisher, said McKee "certainly could" benefit from Hostess' plans to wind down.

At the same time, Hostess could sell off its brands, such as Twinkies, Ho Hos, Ding Dongs and Wonder Bread, he said.

"I wonder if it will have a fire sale of its brands," Heath said.

Gloekler said he couldn't discuss whether McKee would be interested in the Hostess brands.

But, CNN/Money reported the Twinkies' unit will probably attract the most potential bidders, noting that bankers expect Hostess most likely to break up its two key divisions: snack foods and bread.

In terms of the Hostess plants, Heath said it has a lot of old facilities.

"There's not a lot of people looking to expand based on uncertainty in the economy," Heath said.

Gloekler said while McKee is ramping up, company officials regret the job losses in the industry.

"We take no joy that 18,000 people are losing their jobs before the holidays," he said. "It's disappointing. It's not surprising based on the facts surrounding it."