Wal-Mart, Hostess Collaboration Delivers 'Deep Fried Twinkies'

Hostess Brands, the maker of lunchbox treats like Ho Hos, is launching packaged "Deep Fried Twinkies" starting Friday that mark its first foray into frozen foods. The cream-filled snack in vanilla or chocolate is the result of a yearlong collaboration between Hostess and Wal-Mart, as both companies look to spark food sales with innovative products.

Battered and partially fried before being frozen, the Twinkies need to be finished for a short time in the oven, toaster oven or frying pan. They'll cost $4.76 for a box of seven and for the first three months are available only at Wal-Mart.

It has a "retro cool factor," says Ellen Copaken, Hostess' vice president of marketing. "It plays into the comfort food trend. And it's fun."

The Twinkie, long one of Hostess' largest sellers, is a bigger business now than even right before the company filed for bankruptcy in 2012, Copaken said. Executives had considered developing a deep-fried version, like those seen at local fairs, but put the plans on hold until Wal-Mart approached them last summer.

For Wal-Mart, which gets more than half of its sales from food and other groceries, the partnership is part of a strategy of working closely with suppliers to come up with new twists on existing foods or developing new ones, and getting them to the shelves faster. The company opened a food lab in June for that teamwork, a process that can cut costs and shave several months off a product launch, says Charles Redfield, executive vice president of food at Wal-Mart.

The food lab at the company's Bentonville, Arkansas, headquarters has 10 test kitchens and space to accommodate 12 individual taste tests at a time. Specific feedback from customers gathered there gets shared with suppliers to determine if an item needs more work. Being tested now: new flavors for its store brand sparkling water, frozen stuffed doughnut bites, and vacuum-packed Paleo meals.

"Most of our customers have a desire to eat healthier," Redfield said. "But at the end of the day, it has to taste good. Great healthy things that don't taste good don't do well."

Hostess has given a nod to the healthier options, reformulating its Mini Muffins with fruit, no artificial flavors and more whole grains. But the Deep Fried Twinkies and candy-topped brownies are among several new treats it hopes will excite shoppers.

At nine grams of fat and 220 calories, the vanilla flavor of the Deep Fried Twinkies compares to 4 grams of fat and 130 calories in a regular Twinkie. One expert says Americans still like a sugar fix, typically at the end of the day.

"We are trying to cut down on foods that are higher in sugar content," said Darren Seifer, a food industry analyst at market research firm NPD Group Inc. "But there is still room for indulgence."

Twinkies have been around since 1930, but the company's financial woes had put their future in doubt. Hostess products came back after the company was bought in 2013 for $410 million.

U.K. expat Christopher Sell added a deep-fried Twinkie to the menu at his Chip Shop restaurant in Brooklyn about 15 years ago, and the idea took off at state fairs. Hot-dog chain Papaya King in New York sells them for $3 each, excluding tax, and they're faring better than the deep-fried Oreos.

"We wanted to do a sweet and savory combo," Papaya chain president Wayne Rosenbaum said. "The Twinkies seem to be the most popular."

Hostess hoped to recreate the state fair staple, but it wasn't easy. The company tested prototypes at its Kansas City, Missouri, headquarters, and considered making it a restaurant product. Then Wal-Mart approached them. Executives at Hostess, which also has an office near Wal-Mart's headquarters in Arkansas, came to Wal-Mart, and cooked in the kitchen with them.

"The original samples were pretty good," said John Pearson, Wal-Mart's senior buyer for frozen foods. "But the batter was a little lumpy."

Hostess wanted a baking time of less than 10 minutes — with the right amount of oozing filling and a crispy texture.

Then there was the name. Hostess considered Carnival Twinkie, Boardwalk Twinkie and the Light and Crispy Twinkie. But Pearson and other Wal-Mart executives encouraged Hostess to call them what they are: Deep Fried Twinkies.

When baked, the Deep Fried Twinkies do come out a bit crispy, but aren't an exact match for the ones at fairs or restaurants.

"It's really good. It's delicious," said construction worker Nick Severino of Yonkers, New York, who tasted a vanilla cream version.

Page Bondor, a Manhattan resident, wasn't excited after trying it. "I like the original Twinkie," she said. "This is a step too far."

What sets the Hostess version apart, Copaken says, is the ease. "We eliminated the hard work and prep," she said.

Inside Wal-Mart's Food Lab

Wal-Mart opened a 12,000-square-foot culinary and innovation center at its headquarters in June as a place where the nation's largest food retailer can work with major suppliers to come up with new food ideas, and develop ideas on its own to bolster its store-brand selection.

Here's a peek at the food lab:

WHAT IT IS: The center has 10 test kitchens including a studio-style chef's kitchen and replicas of the bakery and deli kitchens found in most of its stores. It has stoves, ovens and microwaves so the staff can cook the same ways customers do at home. There's also a sensory lab where Wal-Mart can collect feedback from customers and employees, who answer questions about the texture, saltiness or sweetness of a food or beverage. The facility follows a similar lab at the company's Sam's Club headquarters, which opened a few years ago.

WHY IT MATTERS: Wal-Mart derives 56 percent of its total sales from food and other grocery items. The company also accounts for about 25 percent of the overall U.S. grocery business. Since customers might shop for food several times a week, it's critical to get food items right to build loyalty.

In the past, Wal-Mart had tested products at kitchens throughout its headquarters, but that effort was limited and the feedback it provided was fairly general. Now, Wal-Mart gets specific feedback from customers that it can share with suppliers to help decide if an item is ready or needs changes. That collaboration saves money and cuts several months off a product launch, which can last a year from idea to an item landing on store shelves.

WHAT'S NEXT: Wal-Mart is testing frozen stuffed doughnut bites as well as new flavors for its Clear American Ice store brand sparkling water and Paleo meals that are vacuum-packed. The Clear American Ice pineapple-orange flavor arrives in stores in September. The Paleo meals and the doughnut bites will be in the stores in October.