Daniel Gross at Slate magazine writes that the current recession (starting in late 2007) fueled the cupcake boom in America. He’s predicting the bubble is about to burst:

The cupcakeries are succeeding for a few reasons. They’re peddling a product that is simple, obvious, and generally affordable. Most of the new joints charge about $3 for a cupcake. And they’re certainly a useful rebuke to Starbucks, whose industrialized baked goods are barely edible…

In America, bubbles form because any good business idea gets funded a dozen times over. That’s the American way. Cupcakes are now showing every sign of going through the bubble cycle. The first-movers get buzz and revenues, gain critical mass, and start to expand rapidly. This inspires less-well-capitalized second- and third-movers, who believe there’s room enough for them, and encourages established firms in a related industry to jump in.

Aaron Gordon, a cupcake shop owner told the Washington Post:

“We are coming close to a bubble now. One or two more shops is about as much as the public can support. After that, the folks with the highest-quality cupcakes and best locations will be the ones who survive.”

Perhaps the “survival of the fittest” award will go to the one delivering batches of mini cupcakes in a decked-out golf cart.

Any tight-fisted readers here experiencing cupcake fatigue? Will cupcakes as the latest “affordable luxury” meet the same death as the $4 iced mocha latte?

Photo credit: stock.xchng.