Interstate Bakeries

Did You Know?

• Ralph Leroy Nafziger started Nafziger Bakeries in a church basement at 6th and Prospect Avenue in Kansas City in 1905.
• In 1975, Interstate was acquired by Data Processing Financial and General Corporation (DPF), a computer-leasing company that had encountered difficulties during the IBM antitrust battles.
• During the 2004–2009 bankruptcy period, Interstate closed nine of its 54 bakeries and more than 300 outlet stores, and its workforce declined from 32,000 to 22,000.
• In March 2012, Gregory F. Rayburn cut the salaries of the four top Hostess executives to $1.
• The company's stock, which had been $34 per share, fell to $2.05 with the 2004 bankruptcy.

History

Ralph Leroy Nafziger started Nafziger Bakeries in a Kansas City church basement in 1905. After expanding and buying out rivals, he sold the company to Purity Bakeries in 1925. He then gained a controlling stake in Schulze Baking Company and its Butternut Breads brand. In 1930, Nafziger created Interstate Bakeries Corporation by merging Schulze Bakery with seven bakeries from Western Bakeries of Los Angeles, making it the fifth-largest baker in the U.S. Butternut bread, sold to grocery stores, came wrapped in gingham. Schulze and Western stayed separate under Interstate until 1937, when they merged into the parent company. Interstate bought Supreme Baking Company in 1943 and O'Rourke Baking Company in 1950. The 1950s and early 1960s brought acquisitions including Ambrosia, Remar, Butter Cream, Campbell-Sell, Schall Tasty, Kingston Cake, Cobb's Sunlit, Sweetheart Bread Company, and Hart's Bakeries. In the late 1960s, it added Millbrook Bread, Shawano Farms, and two canning companies. The company renamed itself Interstate Brands in 1969, with flagship brands Butternut, Blue Seal breads, and Dolly Madison cakes. In 1975, Data Processing Financial and General Corporation, a struggling computer-leasing firm, bought Interstate. DPF used its cash to acquire this low-tech company, moved headquarters to Hartsdale, New York, kept its acronym, and shed remaining tech assets. It invested heavily in plants and bought Silver Loaf Baking Company, Eddy Bakeries, and Mrs. Cubbison's Foods.

Brands

In early 2013, a partnership between Apollo Global Management and C. Dean Metropoulos and Company emerged as the frontrunner to acquire the Dolly Madison and Hostess snack brands. They secured the winning bid on March 12 for $410 million, with a bankruptcy court giving the green light. The products returned to shelves on July 15. This division later became the second iteration of Hostess Brands and, on September 11, 2023, announced its acquisition by J.M. Smucker. Meanwhile, on February 28, 2013, Bimbo Bakeries USA beat out Flowers Foods for the Beefsteak brand, a deal approved by the court on March 20. That August, Bimbo also took over the J. J. Nissen trademarks and website, later adding other regional Hostess bread brands like Colombo, Cotton's, Emperor Norton, Fisherman's Wharf, Parisian, and Toscana. Flowers Foods had made an offer in January 2013 for six Hostess bread brands, including Wonder Bread, valued at $360 million and covering 20 bakeries and 38 depots. On February 28, Flowers won the rights to five of those six—Butternut Bread, Home Pride, Merita Breads, Nature's Pride, and Wonder Bread—with the deal finalized on July 22, 2013. (Beefsteak went to Grupo Bimbo.) In December 2013, Lewis Brothers Bakeries acquired a batch of Hostess brands: Blue Ribbon, Braun's, Bread du Jour, Continental, Countess, County Fair, D'Agostino's, Daffodil Farm, Di Carlo, Millbrook, Nancy Martin, Old World, Ozark Mill, Pantry Pride, Sap's, and Weber's. McKee Foods, which owns Little Debbie, purchased the Drake's snack cakes on March 14, 2013, for $27.5 million, and began selling them on September 23 after court approval. On March 15, 2013, United States Bakery won an auction for four northwestern Hostess bakeries for $30.85 million, picking up the brands Eddy's, Grandma Emile's, Standish Farms, and Sweetheart Bakery. As of December 2015, the Baker's Inn and Dutch Hearth brands had not been sold.