US sweet baked foods manufacturer Hostess Brands said it has already implemented a turnaround process at Cloverhill, the troubled bakery business formerly owned by Swiss-Irish food firm ARYZTA.

Hostess Brands expects the revenue contribution from its Cloverhill assets to be US$60m-70m for the year.

The company, which owns brands including Twinkies, acquired the Cloverhill and Big Texas ambient brands from Aryzta, along with the Cloverhill facility in Chicago, in February.

In a conference call with analysts following the release of its first-quarter results yesterday (9 May), Hostess chairman Dean Metropoulos said: “Three months ago, we announced the acquisition of an excellent business, Cloverhill in Chicago – a business we’ve known well and was one of our co-packers and a business that I looked to acquire about five years ago. 

“This acquisition included two well positioned brands, Big Texas and Cloverhill, and good operational capabilities that strongly augment our breakfast, vending and foodservice business. In addition, it included a very nice manufacturing operation outside of Chicago.”

Metropoulos said Hostess has “already implemented a major turnaround of this challenged bakery”. 

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He added: “As you know, we bought it for only $25m as it was losing significant dollars, and it will soon be breaking even, be profitable by Fall and wonderfully accretive into the future.”

Chief finance officer Thomas Peterson said: “We expect the revenue contribution from Cloverhill to be $60m-70m for the year.”

Metropoulos said among the actions Hostess taken at Cloverhill it has rationalised Cloverhill’s SKUs and reduced the workforce.

“We want to fully automate the plant and bring it to where Hostess Brands are and delivery times for a lot of this equipment takes place through August, September,” he said.

He added: “This company had 1,100 or 1,000 [employees] when we acquired it. It’s down significantly. So there’s a big opportunity to automate.”

The Cloverhill business had had a troubled recent past before it was sold by Aryzta, including the loss of 800 employees at the bakery in Chicago following a federal raid looking for illegal workers.