Cupcakes: the tasty London trend that's become big business

There’s one thing that London’s Twitterati (the capital’s top Twitter users) just can’t get enough of - cupcakes. National Cupcake Week (#nationalcupcakeweek) was one of the most popular subjects being discussed by London-based Twitter users today.

Cupcakes used to be the reserve of children’s birthday parties, along with bouncy castles, pass the parcel and miniature bottles of lemonade. But your Auntie Betty isn’t the only one donning an apron these days: Kate Middleton’s brother James is doing it, and shoe designer Patrick Cox is too. In fact, entrepreneurs all over the capital are reaching for the piping bags. These days it seems you can’t get down a London street without coming across a cupcake shop.

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When and why did London’s sweet little cupcake industry become such big business?

The treaty trend for cupcakes began with the same TV show that launched Manolo Blahnik and cosmopolitans. It all started with an episode of Sex and the City. Way back in 2000 we watched Miranda and Carrie enjoy cupcakes outside New York’s Magnolia Bakery – who would have guessed that the miniature creations would become such a lucrative business model?

Cupcakes spawned a slew of cookbooks, and they have fan pages all over Facebook with thousands of followers. Countless blogs are dedicated to cupcakes and the National Cupcake Championships have just crowned their victors. London bakeries Peggy’s Cupcakes and Cocktail Couture won Best Decorated and Most Innovative respectively.

Top five reasons why cupcakes = cash in the capital:

1.       The margins on margarine

The basic ingredients needed to create hundreds of these little fellows are extremely cheap. A bit of flour, sugar, butter/margarine and egg and you’ve got yourself a prime product.

If you venture into any of London’s hundreds of cupcake vendors you’ll see they sell at anywhere from £2 - £5. That’s a pretty sweet mark-up.

2.       Several volumes of sponge

One key part to any business is being able to sell in different batch sizes.

Canny cupcake companies embrace that tried-and-trusted retail balanced business model: a good volume of large, high-value orders supplemented by frequent single-unit impulse buys. London’s cupcake companies catch customers’ eyes when they’re strolling down the high street, pulling them in for a one-off treat. Cupcakes have become rather in vogue for large catering orders too, gracing London’s weddings (Stella McCartney’s included) and corporate events alike (the Young Vic has indulged, among others). They’ve even graced London Fashion Week.

3.       A cake to suit every season

A cupcake can be dressed-up to suit every occasion. For every celebration and every public holiday you can ice up a sponge that will fly off the shelves due to its timely, tasty nature. Christmas, Easter, Halloween, Valentine’s Day – all obvious choices. How about cakes for Gay Pride, Fashion Week or a royal wedding?

Companies like Loves Rosie Cupcakes and know how to create a seasonal mix and you just can’t beat Cox, Cookies and Cakes for unique styles.

4.       Vintage eats

There’s a nostalgic wave sweeping London and cupcakes tap right into that. From doyleys and china tea sets, fifties dresses and the rebirth of W.I. – vintage is in. And what sits better on a floral, porcelain cake stand than a well-designed cupcake? Paper Dress vintage store in Shoreditch has held cupcake decorating classes and sells the cakes in store.

5.       Retail bake-off

Cupcake businesses are extremely adaptable. They can happily inhabit their own tea room and café, filling an entire shop window and enticing cake lovers through the door. At the same time – cupcake stands fit nicely into larger retail spaces – complimenting other stands and brands.

Selling out of a large London retailers’ food hall adds yet another revenue stream. Selfridges has LOLA’s Cupcakes, The Primrose Bakery and Petit Pois peddling their wares out of the food hall.

Now that’s what I call having your cake and eating it.