Interstate Bakeries Corporation

Interstate Bakeries Corporation (IBC) {{nyse|IBCIQ}} is the largest wholesale baker and distributor of fresh bakery products in the United States, and is the owner of the Hostess, Wonder Bread, Dolly Madison, Butternut Breads, and Drake's brands. It is based in Kansas City, Missouri.

Related Topics:
United States - Hostess - Wonder Bread - Dolly Madison - Butternut Breads - Drake's - Kansas City, Missouri

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It was formed by the buyout of Continental (number one baker at that time) by Interstate Brands Corporation (number three baker) from Ralstons. A large portion of the payment was in stock. Ralstons made an enormous profit when the stock jumped significantly shortly after the buyout. Butternut Bread/DollyMadison bought out Wonderbread/Hostess and ex-Merita Baking head, Charles Sullivan, became the CEO. Butternut and Wonderbread operated with different cultures: Butternut was seat-of-the-pants, with each bakery a self-contained profit center; Wonderbread was very "procedural and by-the-book." This caused some problems early on. In both cultures, snack cakes were more profitable due to "economies-of-scale and logistics." When extended-shelf-life enzymes were developed for bread, the hope was to convert the system of many small inefficent bakeries into an efficient network of a relatively few giant bakeries like their snackcakes operation. Bad luck intervened; the old resurrected Atkin's diet and Krispy-Kreme doughnuts affected pricing and sales volume.

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On September 22, 2004 Interstate Bakeries filed for chapter 11 bankruptcy. The company also named a new chief executive. James R. Elsessor, who had taken over as CEO for Charles Sullivan, was replaced by Tony Alvarez. Interstate Bakery's stock, which had been at one time $34/share, has fallen to $2.05/share as they declare bankruptcy.

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