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"Will Cupcakes Be The Next Krispy Kreme" by The New York Times

October 28, 2008
Photo by NY Times

Anybody remember the Krispy Kreme craze?

They had their heyday before the company over expanded.
The mystique of the product wore off with market saturation
and the low-carb craze of the late ’90’s.

Will cupcakes lose their market appeal?
Or their Tiffany status?

From the New York Times

New York City may well be the cupcake capital of America. Magnolia Bakery of Greenwich Village has produced a list of progeny very Old Testament in length: Magnolia begat Billy’s and Buttercup, and Buttercup in turn begat Sugar Sweet Sunshine.

And then there are Crumbs, Cupcake Cafe (which dates to 1988) and Burgers and Cupcakes. Los Angeles appears to be hopping on the cupcake bandwagon, but New York remains the genesis of cupcake awareness. (Los Angeles, however, gave us the yogurt craze with Pinkberry.)

Many of the cupcake shops have started to clone themselves. Magnolia opened a second spot on the Upper West Side in addition to its Village location. It plans a third store in Rockefeller Center this month. Buttercup Bake Shop now has two places on the East and West Sides of Manhattan. Within the last several years, Cupcake Cafe also now has two locations. Even with expansions, these places have retained their boutique appeal.

But Crumbs, which started in 2003 with a single store on the Upper West Side, is expanding more aggressively, with 40 planned stores over the next year and 150 within the next five years. (All self-financed.)

This kind of growth brings to mind the tale of Krispy Kreme, another sweet phenomenon that went national very fast. It, too, offered a nostalgic dessert at premium prices, with lines around the block and fawning press coverage. Krispy Kreme went public in 2000 and was a high-flying stock that confounded analysts with its market appeal, rising even as the dot-com bubble burst.

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