The Fall of Tastykake

With the sale of the 100-year-old Philadelphia brand to a Georgia company, serious questions arise about Tasty Baking’s demise, from installing politically connected Charlie Pizzi as CEO to taxpayers shelling out $32 million to build a new factory in the Navy Yard. In the end, Tasty’s long rise and recent fall are the story of how this city works — or more accurately, too often doesn’t

But even then, in what was arguably Pizzi’s finest pre-Tastykake moment, he wasn’t calling all the shots. It was Judee von Seldeneck, founder of Diversified Search (a high-level job-placement firm) and then the chamber’s chair, who initiated the tax-cut crusade and convinced Pizzi to buy into it. “She was the power behind the throne,” says tax-cut advocate Brett Mandel. “Charlie got into it, though. It was very out of character to see him dissenting, and it was terrific because the chamber had really epitomized the Philly tendency to drown without making waves. He dissented. In Philadelphia, that passes for boldness.”
Within months, Pizzi was named Tasty Baking’s new CEO. The board that picked him included his good friends DiBona Jr. (since deceased) and von Seldeneck. Also on the board was Ronald J. Kozich, a former Ernst & Young partner who knows Pizzi well. With Pizzi, the board selected a man best known not for his managerial skill, but for the size of his Rolodex and his ability to work a room. When news of his selection spread, analysts howled and Tasty Baking’s stock price began to fall. 
Von Seldeneck defended the decision at the time. “We’re all directors of a public company,” she told the Inquirer. “We have a fiduciary responsibility to shareholders. You don’t put your pals in positions like this.”
Of course, that’s exactly what von Seldeneck had just done.
THE COMPANY PIZZI had been given was already in trouble. New snack products were encroaching on stomachs, wallets and shelf space that had once belonged exclusively to Tastykake: breakfast bars, bags of crackers, flavored nuts, an endless array of chips (potato, tortilla, taro, etc.). 
Ominously, Tasty Baking had begun losing ground in the Philadelphia market, the company’s golden goose. It will likely surprise no one to learn that this region’s residents eat more snack cakes than those of any other region of the country. By 2002, though, Tastykake’s once-commanding share of the local market — more than 90 percent in some years — had dwindled to about two-thirds.
At the upper end of the market, health-conscious snackers began to shun junk brands like Tastykake. At the lower end of the market, Tasty Baking was losing customers to Little Debbie, a producer of cheaper, if inferior, cakes that give consumers a similar sugar rush.
Tasty Baking had been slow to adapt to the region’s changing demographics, failing to convert immigrants into loyal buyers. Local Asians eat virtually none, according to former Tasty Baking executives.
Pizzi’s predecessor as CEO, Carl Watts (an anti-Pizzi who shunned the political scene and logged 35 years with the company), tried to counter the drop-off in local sales in the 1990s by expanding to states like California, Texas and Arizona. Spoilage wasn’t as much a challenge by then as it once had been. Tasty Baking had improved its shelf life in the mid-1990s with new packaging, and it had also joined its competitors in baking cakes that were packed with preservatives. (Let’s just say that most ingredients in Butterscotch Krimpets aren’t common in home kitchens.) But margins on the out-of-region sales were relatively low, given the higher distribution costs, and faraway snack consumers unfamiliar with Tastykakes often stuck with their favorites, such as Twinkies.
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  • Diane

    Anyone who cannot distinguish between Tastykakes and Devil Dogs, Zebra Cakes and Twinkies probably should not write about them.

  • Ellen

    Ex-Philly girl misses TastyKake’s and is not beneath begging her relatives to bring boxes when they come to California to visit. Though not as memorable as they once were (can you say preservatives?) I still jones for them and Habersett’s Scrapple and Taylor’s Pork Roll. Now we’ll see another Philadelphia institution lost and a relocation to a baking company (in Georgia?) that will likely turn the Krimpets into a Twinkie (gag!) or worse develop a grits Krimpet. I shudder to think of it.
    However, if the new baking company can manage to crank out a decent TastyKake please ensure distribution to southern California Ralph’s or Albertson’s stores please!!!

  • Stephen

    one has to look far and wide to find a few examples nationaly where taxpayer support of businesses in competitive markets has succeed. All it does is postpone the tough business decisions to the the point where it is no longer possible to save the business, its jobs and its tax revenues. Tastey subsidies are like deserts, a sweet taste that is soon gone and the debilitating flab remains.

  • Stephen

    one has to look far and wide to find a few examples nationaly where taxpayer support of businesses in competitive markets has succeed. All it does is postpone the tough business decisions to the the point where it is no longer possible to save the business, its jobs and its tax revenues. Tastey subsidies are like deserts, a sweet taste that is soon gone and the debilitating flab remains.

  • DAV

    I think the writer stated the obvious fact: “Charlie had no experience with running this type of company”. But someone who may have done it better is Vincent Melchiorre who was a Marketing Exec. for Tastykake and is now with Bimbo.

  • suzanne

    Tastykake sold out to an out of town company who doesn’t know Philly tastes,customs,traditions,or expectations.The product will probably shrink in size,rise in price and be made with corn sirop instead of sugar.Will be known as TastelessKakes or worse.

  • Robert

    When I moved from my home in Maryland to Georgia in 1985, the thing I missed most after family and friends were Tastykakes. Thanks to Flowers Bakery I now enjoy Tastykakes whenever I want. I close my eyes, take a bite, and for a moment I’m home again. Flowers did more than preserve jobs, and for that I’m a grateful customer.