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Hostess Licenses Brands to Nestle for Ice Cream image

Hostess Licenses Brands to Nestle for Ice Cream

Hostess Brands, building on its recent IPO, signs a licensing agreement with Nestle for Twinkies, Sno Balls and Hostess Cupcakes ice cream, potentially generating “millions” in incremental gross margin dollars, investment firm Dane Capital Management said in a research note. A Nestle spokeswoman confirmed the agreement, but declined further comment. Hostess officials weren’t available for comment.

“Although ice cream could prove meaningful, to us, this is less about ice cream, than the potential Hostess has to expand its brand in many directions,” Dane Capital said. Hostess, which was acquired in 2013 amid its second bankruptcy in 10 years by Apollo Capital Management and Gores Holding, posted about $621 million in revenue in 2015.

Dollar General is expected to start carrying pints of Twinkies ice cream in February with convenience stores chains to follow through May. A Dollar General spokesman confirmed the chain will carry Twinkies ice cream, noting that the brand “resonates well with our customers.” Dane also says that Kroger will launch Ding Dong ice cream sandwiches this month.

Underscoring its push into ice cream, Hostess filed a trademark application in November for the Twinkies brand for ice cream, according to U.S. Patent and Trademark Office records.

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