The biggest problems were financial. The company kept expanding, which is expensive, and they weren’t selling enough cupcakes to cover the cost. The company also went public in 2011, which can lead to a whole separate set of business issues.
Tied closely to that is the belief that the whole premise of the company was a fad, destined to flame out from a drop in sales. Cupcakes shot to prominence with Sex And The City and a guest appearance by Magnolia Bakery, another cupcake bakery, in the early 2000s. The AP makes the case that other companies like Krispy Kreme and TCBY also grew to great heights based on a food trend then eventually came crashing down along with all of our sugar highs. Things like changing health concerns (people are more calorie-conscious these days), shifting taste buds and increased competition from others who are chasing a fad can hurt business.
We’ll propose that it was less the cupcake fad and more the Crumbs brand that played a role in the company’s demise. People still like cupcakes. Maybe not as much as before, but I can count on one hand the number of times I’ve seen someone turn one down. Part of the problem was that Crumbs wasn’t as fun as a cupcake business should be.
The AP points to Magnolia Bakery as a hold out in the cupcake industry. There’s also Sprinkles and a number of others, so clearly people haven’t totally gotten over them. A Magnolia spokesperson notes that they’ve branched out into other desserts, but by and large, the cupcakes are the main attraction. Crumbs also sold coffee and other pastries, but maybe they didn’t branch out enough. Dunkin’ Donuts sells a lot of coffee, but still pushes a lot of doughnuts. It too has been faced with competition over the years. And in New York at least, we’ve seen a number of competing specialty shops open up recently, from Dough to Doughnut Plant.
Even more specialty, there’s a shop called Rice to Riches in Soho that only sells rice pudding. Just tubs and tubs of rice pudding. It’s actually incredible.
But what all of these places have in common is atmosphere and specialized branding to match their specialty menus. Doughnut Plant actually looks like a colorful doughnut factory. Rice To Riches is wallpapered with crazy signs telling you it’s all right to be a fat ass and order a Sumo size serving. Magnolia feels kind of old timey. Even Dunkin, at this point, is iconic orange. You know what to expect when you walk in.
I’ve worked near two Crumbs cafes. Both of them looked the same. You walk in, there’s a large, well-lit case crammed with cupcakes in an otherwise nondescript space. You get what you order and then you walk out. You don’t want to sit and linger. Your guilty pleasure is boring as hell. (And a little too sweet for my taste.)
Crumbs focused on getting bigger, but it didn’t seem to concentrate on developing into something better. It didn’t have anything to offer when competition came around. There wasn’t an experience that people came back for. Now there’s nothing to come back to.