Cupcake Wars: Tracking the Cupcake Trend

Cupcake Bubble Continues to Inflate For Many Years - Will Deflation Continue?

The Cupcake Bubble Continues to Inflate. Crumbs Bakery, NYC

You know when the cupcake wars are indicating a slowing of the trend when a relatively small Cupcakery receives a substantial capital infusion.

The Great Cupcake Rush may be slowing down to a more reasonable rate of growth which also means that some cupcake bakeries may become statistics and no longer exist as real stores.

In fact, many say the cupcake trend has 

So What Is a Cupcakery?

Well, since it is so new, industry definitions are few and far between.

They are specialty bakeries that focus on fabulous, extraordinarily different versions of the traditional cupcake. The cupcakes are many times larger than the traditional cupcake and are of course more expensive, ranging from $3 to $5 per cupcake.

Mintel, a leading provider of consumer market research published " Mintel finds weddings in a recession have fewer bells, all the bliss. "…couples are trading in the elaborate wedding cake for individual cupcakes.." Cape Cod Lollicakes, featured in The Cupcake Wars, creates Wedding Cake creations with their bite-sized morsels.

Mintel had predicted that nationwide cupcake sales would rise approximately 20% over a five-year period. This is an interesting counter-trend to the consumers growing interested in healthier options and losing weight.

Packaged Facts Fresh Baked Goods in the U.S ".. projects that the market will grow by 26% between 2009 and 2014, to reach $20.1 billion at retail.

" So all in all the market for these portable bits of heaven is still strong.

Crumbs Led the Cupcake Wars and are Now In Ice Cream

A few years ago, Crumbs Bake Shop led the cupcake trend. The cupcake bakery whose Signature Cupcakes clocked in at 6 ounces and almost 4" tall declared bankruptcy in 2014, shut the cupcake shops then soon after got acquired and re-opened.

They wisely extended their well known and loved brand, and the cupcakes, to the new on-trend indulgence: ice cream. A series of premium ice creams featuring cupcake flavors lets people have their cupcake and eat their ice cream too.

Food Trends to Watch

Cupcakes were a "hot" trend that rode on the coattails of two consumer trends:

  • Recession Weariness
  • Affordable Indulgence

Affordable Indulgence

Affordable Indulgence is the consumer's way to ease the pain of trading down frequently on their purchases. So they find indulgent items that, in the consumer mind, are affordable. Again, not to select Starbucks, but most anything you can purchase at Starbucks is under $5… and that is affordable. Symphony IRI created The Affordability Report specifically addressing " change in consumer spending (that) is happening faster, more frequently, and is less predictable than ever before… stagnant wages have bred exceptional price sensitivity, resulting in lower demand in many categories…"

So shoppers are trading up AND down, in some cases buying less of certain products to save money and trading up on items like… cupcakes. Cupcakes are an "affordable indulgence" which consumers are willing to splurge, no matter how tight things are you can find a $5 bill in your pocket.

Supermarkets Expanding In-Store Bakeries with Cupcakes

Supermarkets leaped on the upscale cupcake bakery segment (with HEB adding a trendy fermented black garlic cupcake to the mix in 2015), with many of the in-store bakeries obtaining a respectable percent of the products consumers purchase through outside vendors.

The store can use unskilled labor to complete the baking of cupcakes or bread and have the delicious aroma of freshly baked pastries and desserts wafting throughout the store. Supermarkets are where their longer term business growth will occur. Secondarily the foodservice market is another segment they will appeal to.

Affordable Indulgence is here for a long time, whether in giant cupcakes, artisan doughnuts, muffins (croissant - muffins) or cronuts (croissant doughnuts). However, the cupcake wars will settle down to a more sustainable rate of growth which is good for the category health and good for all of us who enjoy these delectable treats!