Mississippi’s cupcake craze

Cupcakes are selling like hot cakes.

The low price of these decadent pick-me-ups is attracting consumers. Or maybe it’s the baby boomer nostalgia factor. Or the appeal of trading a pint of ice cream for a pint-sized treat with half the guilt. Who knows.

Mississippi is finally following the trend that was started by New York City’s Magnolia Bakery in 1996. Happy cupcake bakers are popping up and frosting all over.

Only time will tell if the trend will last.

Nancy Anderson, assistant professor of finance at Mississippi College and a financial management firm owner, predicts that the cupcake fad will begin to wind down within the next 24 months.

By the time a trend makes its way down to Mississippi, it’s usually an old idea, she said.

As with all fads that come into maturity, “A lot of them are going to fall by the wayside, and you’re going to be left with a small group that will survive,” Anderson said.

Store owners, both independent and franchise, think differently.

Independents

The Madison Cupcake Company was opened in Madison’s Colony Crossing Shopping Center in January by Laina Woodard Smith, who has transitioned from lawyer to stay-at-home mom to business owner.

“I’ve always like cake decorating and liked baking ever since I was a little girl,” Smith said. Ever since, through the magic of television, she boarded Mister Rogers’ train and took a trip to a bakery where she watched a pastry artist make a rose from icing.

“I was hooked,” she said. “Everyone in my family would fight over who got the piece (of cake) with the rose on it.”

Smith learned how to spin sugar into art from classes in her hometown of Atlanta with Food Network star Nicholas Lodge.

Smith considered opening a franchise but was turned off by the up-front fees. She took advantage of low SBA loan rates and decided to go independent. Smith enjoys baking cupcakes from scratch and having total control over flavor choices. At press time she was plotting Blackberry Merlot and Raspberry Chardonnay cupcakes.

Madison Cupcake Company owner Laina Woodard Smith learned gum paste tricks from Food Network star Nicholas Lodge.

Smith works around 10 or 12 hours a day and says managing the business side of her shop is the most challenging part of being her own boss.

Pretty Sweet Cupcakes & Cake Décor in Oxford has been open for just two months and has received a warm welcome, said owner Audria Lester. She and her husband Brian, a school coach, opened their business for about $25,000 by “squeezing the penny.” Audria formerly worked in human resources at a department store and has decorated cakes at home for about seven years now.

Pretty Sweet took over a former Play N Trade game store, turning its black walls to pink.

“A lot of our customers are saying that they’re glad we finally have a cupcake shop in Oxford,” Audria said.

They are selling at least 120 cupcakes daily with their top-seller being the Ooh La La, a pound cake cupcake filled with cheesecake and tops with  cream cheese icing with garnished with graham cracker crumbs.

The Frosting cupcake shop, which has locations in Ocean Springs, D’Iberville and Gulfport, markets itself as specializing in “gourmet filled cupcakes.”

The owners could not be reached at press time.

Nancy Smith opened a Hey, Cupcake! in Northeast Jackson’s Canton Mart Square in August 2010, which has no relation to the Austin, Texas, franchise of the same name.

Smith, a former flight attendant and stay-at-home mom, said, “Everybody was scaring me to death saying, ‘Every year for the first year or two a small business, they lose money.’” Smith took out an SBA loan for about $75,000 but didn’t use it all. She is making the payments and not losing money.

“I had zero experience, except I did stuff out of the house. It has been crazy fun. I just finished a tombstone wedding cake for a 50th birthday. Special orders are huge. I’m the baker, the modeler, whatever. My mom helps out,” she said.

Like other shop owners, she loves the creative aspect of the business. “Making up a name is half the fun. Cupcakes are something you can do different every day,” she said. She calls her best-selling strawberry cupcake Strawberry Fields Forever, and her carrot cake cupcake is What’s up Doc.

Her mini cupcakes have also proved popular, along with the gluten- and sugar-free. Smith works about 14 hours per day and bakes about 200 cupcakes daily, a combination of regular-sized and minis.

Franchises

Cathy Richardson owns Gigi's Cupcakes in Flowood and is opening another store in Ridgeland.

Nashville-based Gigi’s Cupcakes has popped up in Flowood near Dick’s Sporting Goods, and another one is on the way and set for the Township in Colony Park in Ridgeland. Gigi’s president Alan Thompson says Mississippi could get two more stores soon: one in Tupelo and another in Hattiesburg.

Opening a typical Gigi’s Cupcakes requires $175,000 or more, which includes a $35,000 franchise fee.

Thompson said, “We have not ever had an owner who lost money their first year of business.”

Thompson wasn’t originally sold on the longevity of Gigi’s, which began in 2008, but now he’s a believer. “One advantage that we have with this cupcake craze started in about 1995. It’s been going for awhile. I don’t think it’s anywhere as strong as it’s going to get.”

Low food, labor and entry costs as compared to other restaurant ventures factor into a successful business model. Easy access and convenient parking are crucial, he said.

Wedding Cake cupcakes are top sellers at Gigi's.

“The real key isn’t the rate of our growth but is the success of our stores. And one of the reasons is because we attract people like Jason and Cathy locally. They have real business acumen. They can afford to do it. They’re passionate about our business,” Thompson said.

Jason and Cathy Richardson’s Flowood store will be a year old next month, and they have been surprised by the volume of sales, which has exceeded their expectations by about 50 percent.

The Richardsons are Wisconsin natives who moved to the South for Jason’s job in medical equipment sales. Cathy had wanted a cupcake store, and Gigi’s fit her profile of a faith-based company that specialized in cupcakes only.

Gigi’s has a devoted following. Regulars drive from over from Clinton weekly. Others travel from Meridian. Madison customers continued to beg for a store in their area, hence the second location.

Cathy said a key to success is being in the store. If your customers know you, they are likely to come back. A pet peeve is “people saying it’s a franchise. We were the first cupcake place here, and we are locally owned. I am here all the time,” she said.

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