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:
‘œWe 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 ‘œsurvival 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 ‘œaffordable luxury’ meet the same death as the $4 iced mocha latte?
Photo credit: stock.xchng.
There’s no such thing as too many cupcakes. But I like making them at home, rather than buying them from a bakery. The exception is the coconut cream from Le Grand Orange in Paradise Valley, AZ. Totally worth the drive to the snooty part of town for a cupcake with frosting at least 6 inches on top of the cake itself – a sure fire recipe to end up in a diabetic coma. But what a way to go!
I don’t think it’s even a supply issue, it’s a health issue. Just like Krispy Kreme, Americans simply can’t eat unhealthy items on a daily basis. The donuts were fun for a while, but people realized it wasn’t prudent to eat them on a daily or even weekly basis. The same goes for these cuddly cupcakes…but then again, even “healthy” stuff like Pinkberry met its demise, so who knows what to think.
Sadly, new homes are still being built in fringe areas across the nation and builders are relying upon government subsidies to get their money out.
Are cupcake subsidies something to consider?