Cupcake Fad waning – Right on Schedule!

Have I not predicted, in past posts, the ultimate fall of the Cupcake fad – and that it would peter out sooner rather than later? Now, it appears that the Cupcake as a stand-alone treat has met the beginning of its end. The biggest Cupcake retailing chain in North America has admitted defeat and is closing its doors…

Georgetown Cupcakes Partners - © 2014 Georgetown CupcakesGeorgetown Cupcake partners, Sisters Katherine Berman and Sophie
LaMontagne, are still opening new stores, but they have decided
– for now, at least – not to get into franchising.

The American financial newspaper of record, The Wall Street Journal, recently reported that Crumbs, the largest cupcake retailer in the U.S. had closed all its stores and virtually disappeared.

Crumbs was de-listed by the NASDAQ Exchange last week after its capitalization fell below the minimum required for membership. Profits had been falling precipitously for the past two years. The corporation, in fact, reported sales of just over (US)$9 million for the year ending June 30 – a  shocking 25 per cent decrease over the same period the year before. Crumbs made its IPO on the NASDAQ Exchange in June, 2011, at over (US)$13.00 per share. It closed on June 30 this year at (US)$0.30 per share. How the mighty are fallen – more like an unsuccessful soufflé than a cake!

Shock waves echoing through the ‘industry’?

Well… Yes and no.

Georgetown Cupcake of Washington, DC, is sticking with its tight focus on Cupcakes and opening new stores. But it has not (yet) gone for the baited hook of franchising. Another chain, Sweet Arlene, is just starting to sell franchises.

Still other icons of the Cupcake sector are diversifying to protect the health of their businesses while still using Cupcakes as their ‘flagship’ menu items.

Sprinkles, for example, is now offering Ice Cream and Cookies along with its signature Cupcakes. Cookies, of course, pre-date Cupcakes as beloved treats that could not make it as stand-alone products in the overall bakery/dessert sector. The Sprinkles strategy appears to embrace the ancient principle of ‘strength in numbers’. Meanwhile, the Magnolia Bakery chain is already offering puddings, cakes, brownies, bars and an array of other menu items that are kissing-cousins of the Cupcake.

The moral(s) of this story?

  • A bakery business cannot live by Cupcakes alone.
  • Any Bakery, Eatery or retail outlet in the Foodservice sector that relies on one product alone for its survival is easy prey to the fickle allegiance of the Foodie community on which it also, necessarily, relies.
  • You can only make so many flavours of Cupcakes and decorate them in so many ways before you find you are fatally repeating yourself!

One question remains: How long will The FOOD Network keep playing those tedious reruns of the hopelessly formulaic, repetitive Cupcake Wars series?

~ Maggie J.