Cupcakes are just a fad, aren’t they? That’s what we’ve been told for the best part of a decade, so it must be true, mustn’t it?
Not in the slightest.
Sales continue to grow, baking businesses continue to bloom, and customers continue to enjoy one of the most popular sweet treats of recent years.
In fact, the cupcake industry is worth more than $6bn in the USA alone, and has been one of the fastest growing segments of the baked-goods sector in the past five years.
People are willing to pay good money for good quality cupcakes, and in the UAE it seems the appetite for them is insatiable, with bakeries continuing to open apace, allowing cupcakes to keep up with more recent trends such as macaroons and frozen yoghurt.
Nowhere is this point proven with more clarity than with the arrival and impending expansion of British business Hummingbird Bakery.
Having arrived in Dubai in September 2012 its popularity has soared. Occupying a prominent position in Dubai Mall, the bakery was brought to the emirate by franchisee Daud Arabian, which has an impressive portfolio of brands including California Pizza Kitchen, YO! Sushi, Morelli’s Gelato, Gourmet Burger Kitchen, Trader Vic’s and Pinkberry.
But the Hummingbird story started many years before the brand arrived in Dubai, garnering a stellar reputation over a ten year period in its home city of London. And its founder, Tarek Malouf, believes there is a healthy future for cupcakes in the UAE, the Middle East, and the world in general.
“To be honest journalists have been writing a lot in the UK since a year after I opened first shop that cupcakes are fads and are yesterday’s news,” he says. “But our sales have just grown and grown, which really shows they are not a fad, and people are still very interested.
“I think this will continue to be the case. I’m confident that cupcakes will last for a much longer time than people seem to think.”
Starting his business in 2004, Malouf brought his concept to a market which was relatively new to American baking.
He says: “It’s been nine and a half years since we opened the first shop. At the time there weren’t any places in London that sold cupcakes. They were virtually unknown. Good quality American style desserts were not available in general.
“I grew up in London but went to an American school. I was used to those types of home-baked desserts but couldn’t find good quality versions on them in the shops.
“There’s a long history of American baking and I thought people would appreciate it in London. So we opened up the first shop in 2004 and it’s gone from there.”
Subsequent shops in other parts of London increased the brand’s visibility and reputation. Outlets in South Kensington, Soho, Spitalfields and Notting Hill not only catered for residents, workers and shoppers in the English capital, but also countless numbers of tourists, who immediately took to the business and gave Malouf options on a global scale.
“The whole notion of bringing the brand to the Middle East started about six months after opening the shop in 2004,” explains Malouf.
“We started getting lots of customers from Gulf countries who loved the taste and the concept, and many of them asked if they could open a franchise in the Middle East.
“At the beginning I wasn’t ready and couldn’t give it much thought, but in 2006 or 2007 the owner of the company that we eventually went with contacted me. I took them seriously because they had a franchise deal with YO! Sushi, which is very high profile.
“I still wasn’t ready, but after speaking to various people over the years it seemed good for us and that’s how this part of the story started.”
Working with a franchisee presented Malouf with new business challenges, especially given the quality he demands of the products’ taste, as well as the precise aesthetics of the brand.
To ensure Hummingbird Bakery Dubai is an honest representation of Hummingbird Bakery London, he made the decision to spend the initial months and years working closely with Daud Arabian.
“We have a very hands-on approach with the franchisee. The integrity of the brand is very important to me, so we are very involved with them in order to benefit both parties and ensure the brand stays true to itself.
“One of the main difficulties we had in doing this was something that other people I know in the region’s food and business industry warned me about. Getting quality ingredients.
“I have a friend with a Lebanese restaurant in Dubai, and even she has problems getting the quality of ingredients she wants. The quality fluctuates greatly, which is a big obstacle to getting the consistency you need.
“We wanted to stay as true to UK ingredients as much as possible but didn’t want to make cupcakes too expensive, which would have been the case if we’d done it that way. What we did instead was to send a development chef from the UK to Dubai to work with what he could find there in order to get the taste of the cakes as accurate as possible.”
Sourcing problems aside, Malouf claims he is very happy with how the franchisees have stayed true to the brand, especially when it comes to the all-important food.
“All the cakes being made are either exactly identical or almost identical to the ones in the UK. The franchisees have done a great job – we’re really pleased for them, and for the brand as well.”
The success of the franchise is destined not to be restricted to Dubai, where a second shop will be opened in the coming months.
The deal also includes an obligation to open shops in nine countries in total, encompassing the GCC, Lebanon, Egypt and Jordan, with 20 bakeries due with ten years of the deal being signed.
And Malouf is keen to give the help necessary to allow the franchisees to eventually stand on their own two feet in the region.
“We’re continuing to help by assisting with the second branch, and also helping them get more block sales,” he says.
“Block sales doesn’t have to mean hundreds of cupcakes at once, but people are buying bulk for birthday and other celebrations, which is a really important part of the business, so we’re helping them with that aspect.
“Eventually the franchisees need to build a support network for the brand in the region so that they can run everything from there and don’t need to send anybody for training in the UK. Everything will be done from the Middle East.”
With cupcakes still such big business, Malouf is aware of the increasing competition in the UAE and Gulf region, but is confident that Hummingbird will stand out thanks to its decade of success in the UK.
“We have very high brand recognition in the Gulf because of the amount of tourists coming to London. Our branches in West London are full of Gulf ladies who lunch, and they really help us through the summer months. It helps us in Dubai too as people already know the brand, and like the brand. So even though there is so much competition here, we have an advantage.
“Another advantage is the research we do into making sure the products taste how they do in their home country. This is all part of our belief that here has to be substance to the business, not just hype. Hype by itself just doesn’t work and it’s something we really want to avoid. I’m picky about how every single cake turns out, and that’s the kind of thing which makes the difference.”
His confidence in the success of the franchise branches mirrors his confidence in the longevity of cupcakes overall.
A lover of all kinds of sweet treats, he argues that cupcakes are not just easy to enjoy and easy to access, but easy to share and buy for celebrations.
“You wouldn’t buy 24 flapjacks for a friend’s birthday, and you can’t really write ‘happy birthday on an éclair,” he says.
“There’s a place for everything, and the market is big, but cupcakes have that gifting aspect which is something really special.”
His belief in the future of cupcakes means more franchise agreements could be struck in the near future, but as he explains, he would rather take his time getting things right before lurching forward ahead of time.
“We are currently in exploratory talks for possible partnerships in Taiwan and China, so those could happen soon. But I’m not a fan of running before you can walk. I want to make sure we have solid years of relationship with a franchisee to see what problems are that can come up. This will help us avoid similar problems in the future.
“We haven’t gone to the market touting for franchises, so we want to see who comes to us. Our first responsibility is the UK business. That’s where the money really comes in for us. We don’t get anything crazy high from franchises.”
While the future may mean new horizons for Hummingbird, there are some things that will always remain the same.
“We keep our core offerings the same, and always keep a check on their standard. We do like to try new flavours and introduce new cakes fairly regularly, as it keeps things fresh, but the core sellers that we’ve been doing since day one will always be there.
“We wouldn’t radically change anything – our revenues are increasing year on year, so we don’t need to. I’m a big fan of organic growth. We have a great product and a great brand, so we don’t want to go too far away from what we’ve already got. It working well for us, so I’m very happy.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.