“One segment of the industry that seems to be adding the most outlets is cupcake cafes. This could be a fad, or not,” Barbara Byrne Denham, chief economist at real-estate services firm Eastern Consolidated, wrote in a report Thursday.
Cupcake businesses big and small seem to back up Denham’s position. (Call it buttercream economics.)
From New York-based national chains like CRUMBS Bake Shop to small start-ups like Butch Bakery in Long Island City, the cupcake industry seems to be recession-proof. A cupcake truck that launched this year and Sprinkles Cupcakes, a popular West Coast chain, opens its first New York location later this year.
In the East Village, cupcake-centric bakery Butter Lane has grown from six to 20 employees in the past year and a half, said Pam Nelson, the owner.
“People still want a cupcake,” said Nelson. “I think it’s kind of an indulgence and the price point is still low. For three dollars people can buy something for themselves instead of spending 100 bucks on a dinner and still feel like they’re treating themselves.”
