Business & Real Estate

Former Hostess bakery is sold again

The old Hostess Brands factory in Sacramento has been sold again, a move that likely erases any hope that the plant could reopen as an industrial bakery.
The old Hostess Brands factory in Sacramento has been sold again, a move that likely erases any hope that the plant could reopen as an industrial bakery. Sacramento Bee file

The old Hostess Brands bread factory in Sacramento has been sold again, a move that crushes any lingering hope that the plant could reopen as a Wonder bread bakery.

Flowers Foods Inc., a Georgia food conglomerate that bought the Arden Way plant and 19 others around the country in 2013, confirmed Wednesday that it has sold the Sacramento facility. The deal closed Oct. 6.

“It did not fit with our strategic plans for California,” said Flowers spokeswoman Mary Krier.

The plant was sold for an undisclosed price to Leeland Enterprises, a Granite Bay investment firm. Officials with Leeland couldn’t be reached for comment. A commercial real estate broker representing the property said the building, located near the Capital City Freeway, would be ideal for retail or office use.

“You’ve got 150,000 cars going by a day,” said Steve Chamberlain, a senior vice president with Colliers International in Sacramento. “It’s going to look better when it’s all cleaned out. It’s a cool building.” He said the bakery equipment is being removed.

Under terms of the sale, the 80,000-square-foot building can no longer be used as a commercial bakery, according to property records.

The Hostess company collapsed in late 2012, and the 225-employee Wonder bread bakery in an industrial neighborhood west of Arden Fair mall was one of the casualties. Community leaders bemoaned the loss of blue-collar jobs that paid as much as $19 an hour.

Hope for a revival came in mid-2013. Flowers spent $355 million buying up the rights to produce certain Hostess brands, along with 20 of the old Hostess plants. Within months it reintroduced Wonder and other Hostess products to supermarket shelves, and a company spokesman said some of the plants would be reopened if demand for the Hostess goods met expectations.

But Sacramento might have become expendable because of company expansions elsewhere in the West.

Last fall, Flowers reopened the bread-making line at the former Hostess plant it bought in Henderson, Nev. And earlier this year, the company added a bread operation at a Modesto bun bakery it purchased in a separate acquisition last year. Together, those two plants “are helping to meet our needs for the California market,” Flowers Chief Executive Allen Shiver told investment analysts in a conference call in May.

Flowers put nine of the former Hostess bakeries up for sale earlier this year.

Purchasing the Hostess assets hasn’t paid huge dividends for Flowers so far. In the most recent quarter, ending July 12, profit fell nearly 10 percent and sales fell 2 percent. While the biggest culprit was competitive pressure in the cake business, Shiver blamed “growing pains associated with our expansion plans.”

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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