Après the Cupcake: Pittsburgh's Deluge?

A couple of years ago, I fostered a silly little idea, or perhaps I just helped to foist it on a Pittsburgh public that was willing to digest this sort of thing: The emergence of Pittsburgh cupcakeries CoCo's and Dozen signaled the rise of a Floridian "Cupcake Class" in Pittsburgh, "[p]eople with the time, money, and taste to consume small portions of upscale baked goods." Longtime readers will remember that the Cupcake Class (the term itself was coined by Chris Briem) was my answer to the Custard Class, a long-ago Pittsblog comment on the relative absence of dynamism and diversity in the dessert economy.

The alleged point of the Cupcake Class was this: So long as Pittsburghers loved their fancy cupcakes, the city was on the path to prosperity. Rich Florida himself got in on the action, making a somewhat serious argument that linked cupcake demand to the supply of "creatives" that move cities in new directions. Unfortunately, that somewhat serious argument builds on the work of economist Robert Lucas, who is decisively skewered today by Paul Krugman's summary of the failures of economic theory.

Krugman has nothing to say about cupcakes, but the economics of cupcakes -- and of the Cupcake Class -- remain in the forefront of media minds. There is something about $4 pastries that focuses our attention -- or that sells newspapers. The Post-Gazette was nearly breathless in its coverage of Dozen's recent Downtown expansion. And the paper cooed its way to publishing a flattering recent account of the tulip cupcake mania that still grips New York City. I have no doubt that a G-20 journalist somewhere is writing about Pittsburgh's cupcakes as a sign of the city's renaissance.

Slate.com is now in on the action, and it more or less gets the point: the cupcake bubble must end; the cupcake crash is coming. Cupcakeries are one-trick ponies, and as everyone has jumped into the post-Sex and the City/Magnolia pond, the market has changed. The value proposition starts to change. Successful cupcake bakers are expanding (rather than innovating) in order to stay ahead of the pack, and they are at risk of losing their edge. It's one thing to market cupcakes-baked-with-love-in-the-back-of-the-store; it is something else entirely to market cupcakes-baked-with-love-at-some-faceless-facility-and-trucked-to-the-store. Why would the Cupcake Class go for that? When cupcakes are commodities, why not buy them from Paddy Cake or Giant Eagle? With the recession, $4 cupcakes are being repositioned as "affordable luxuries," but that's the discredited rhetoric of homo economicus, people making rational judgments about when and how to spend. As The Economist pointed out recently, even branded consumer goods are taking major hits right now. People are trading down; affordable "luxuries" are still luxuries. The cupcake bubble will pop. The cupcake fad will pass.

Does that mean anything for Pittsburgh? Slate.com is offering the truth behind the Cupcake Class (I wrote about it once before): This isn't a story about a city's emergent success with income distribution or "creatives." It's a story about entrepreneurship and what it takes to build a durable company out of a clever idea. Cupcakes come, and cupcakes will go. If Pittsburgh's cupcakeries are going to stick around -- and of course, may they live long, and prosper -- then they have to find more things to bake and sell than $4 pastries. The good news is that in Pittsburgh, it looks like this is actually happening.

Is Pittsburgh a post-cupcake city? We're ahead of the national curve? That, not "Pittsburgh has $4 cupcakes," really would be news that a G-20 journalist could sink some teeth into.