Remember when it was “big” news that Twinkies were supposedly going away? The iconic snack that kids of a generation ago grew up with, to which some where remarkably loyal, wasn’t going to be featured on store shelves anymore.
My reaction: oh well, no big deal.
It’s not like Twinkies had the nutritional profile of so-called superfoods, and frankly there are so many snack options these days that this just seemed like a product from the old days to me. Though admittedly, they were pretty good back in the day.
Clearly, not everyone had that casual, “it is what it is” type of reaction. Actually, what was more interesting to me than Twinkies possibly going away was the near hysteria that some people got caught up in back then. I wrote about this, talking about Twinkies brand loyalty and how people were actually bidding up these products. Maybe the thought of never having one again seemed too overwhelming, because reports indicated that some were going for some pretty interesting amounts.
Lo and behold, with some new ownership, Twinkies are apparently to be sold again per this article. The same people who were feverishly bidding up these snack cakes before they went away might now be able to buy them again.
As I alluded to in the prior post, this is a great example of the power of brand loyalty. After seeing how these things are apparently to be back on store shelves, there is another lesson written about before that we can be reminded of: quite often, markets overreact.
Remember how the stock market declined in the midst of the credit rating downgrade a few years back? Well, it sure recovered nicely! After the tragic tsunami in Japan, the Nikkei recovered fairly quickly. Instead of selling in a panic, the difference is that people bought Twinkies in a panic, thinking that they might never have them again. I know…what a “crisis”, right?
Well, the sky isn’t falling. At least not yet, anyway. It’s been up there for quite a while now. When it comes to certain things, maybe it’s human nature to panic momentarily and behave irrationally. When that happens, the opportunists can cash in. Cha-ching!
My Questions for You:
Are you at all surprised to see a comeback of an iconic brand?
Have you noticed people overreacting to different events, whether relating to shopping or investing?
Didn’t people stock up on Twinkies? That seems a little absurd to me. Unless you sell on Ebay pretty quickly to make some money. Stocking up on junk food is a terrible idea for me, I’d just eat them.
Joe – some people did make a good amount of money and return on investment, per stories at the time. Seems like people thought they would never have a chance to eat these things again. Smart entrepreneurs cashed in.
I am not really surprised by the comeback as there were a number of suitors to buy it from Hostess that someone would’ve brought it back. I thought it was a bit silly, but if I had more than a box of them at home they’d be gone too quickly. 😉
After not having one in years, I almost want to try one to revisit them!
Not really surprised though. Wonder why it would not finish it up quickly if we had it at our home.
The stock market reaction does not surprise me! I was one of the reasons I decided to invest in income property so I would have more control over my investments. I use my asset allocation to reduce volatility.
Larry – asset allocation is a good thing, and diversification can help reduce volatility. Getting caught up in such crazes as this…well, if there’s money to be made on others’ incredible brand loyalty, so be it!
The power of branding strikes again! I am not sure if it was market overreaction or people just really truly wanting to see how many people wanted the brand before buying it. Could have been as excellent marketing strategy. You just never know. People are always overreacting especially in the stock market. You have to take everything as grain of sand. People who rush usually miss out and find themselves worse off then if they didn’t do anything as if the news was never presented. Stocks are based too much on emotions.