KANSAS CITY — Hostess Brands, Inc. is relocating its corporate headquarters in metropolitan Kansas City. Plans for the relocation and a new consumer research center were announced Aug. 7 with the company’s second-quarter financial results.
In a conference call with investment analysts Aug. 7, Andrew P. Callahan, president and chief executive officer, said the move from Missouri to Kansas will result in tax savings for the company.
“We expect to continue to reinvest a significant portion of the savings achieved with the distribution center and headquarters moved back into the business to further enhance our foundation and enable additional consumer-driven profitable growth,” he said.
Thomas A. Peterson, executive vice-president, chief financial officer and treasurer, said Hostess will receive tax incentives and credits “based on our ability to partner with the state of Kansas and local governments on the relocation.” He said the tax incentives will begin one year after the move.
Hostess said the consumer research center will feature a laboratory, a sensory test kitchen and focus group space. The center will be located within the new headquarters building. The company did not specify where in Kansas the building will be located.
The company said the research and development center will “enhance the company’s in-house innovation capabilities and expand capacity for new product research and development.” The center is expected to open in the first half of 2020.
During the conference call, Mr. Callahan elaborated on the value of bringing the research and development center into the Hostess headquarters.
“Historically we have had our R.&D. team in a separate building with one of our partners,” he said. “It’s been cumbersome to kind of collaborate, coordinate. Sometimes, it’s not as hard. We don’t have a 100% access to the equipment and facilities we need and, therefore, we do a lot more in our actual full, scaled up facilities. And therefore, the ability to be able to do benchtop samples or to run sales samples and all of those things are more expensive, they take more time. So the ability to co-locate makes us … much faster, makes us much (more) nimble. It enables us to look at a breadth of ideas a lot faster, so our R.&D. team can really do faster prototyping and testing and other things related to our products.”
The headquarters move is one of a series the company has made this year. In April, Hostess announced it was opening a new corporate office in Chicago to serve as the company’s hub for marketing and category management. A month later the company said it was moving its principal distribution to Kansas from Illinois.
Hostess’ current headquarters are located at the corner of Armour Boulevard and Main Street just south of downtown Kansas City. The move away from this location would be the company’s second time over the last decade that the company moved from Armour and Main. In 2009, when Interstate Bakeries emerged from bankruptcy, the company changed its name to Hostess Brands and moved its headquarters to Irving, Texas, in the Dallas area. A large part of the management team remained at the Kansas City location during this period. With a bankruptcy and liquidation in 2013, the buyers of the Hostess snack cake business, led by Dean Metropoulos, also acquired the Kansas City offices and reestablished headquarters there.