Step aside housing crash, cupcakery is the next bubble
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.