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Emerging Category

Cupcake Bakeries Take A Bite Out Of Sponsorship

As nascent brands, most cupcake makers seek visibility, as well as sales rights.

America’s growing love of cupcakes is resulting in new opportunities for sponsorship.

Although market data on the young category is difficult to come by, it is not hard to see growth as bakeries specializing in cupcakes pop up in cities across the U.S. (Another barometer: the large number of cupcake-centric reality television shows currently airing, including Cupcake Girls, Cupcake Wars and DC Cupcakes.)

The bakeries, which range from independent mom-and-pop outlets to regional chains such as Crumbs Bake Shop, Inc. and Sprinkles Cupcakes, are increasingly adding sponsorship to their marketing mix.

Their objectives: Build visibility, sample product, gain new distribution channels and access intellectual property rights to offer cupcakes bearing the names and logos of sponsored properties.

Recent deals include Cupcakes Changing The World, which has come on board as a first-time sponsor of the Discover Orange Bowl, and Cupcake Gourmet, Inc., which partnered with the NHL New York Islanders and minor league baseball’s Long Island Ducks.

Partnership activity isn’t limited to retail establishments. For example: wholesale baker Freed’s Bakery, LLC sponsors Susan G. Komen for the Cure, making a 20-cent donation for every package of mini gold cupcakes sold from August 1, 2010 through February 28, 2011.

Freed’s, which has a three-year partnership and a $10,000-minimum guaranteed donation, sells through Wal-Mart Stores, Inc.; H-E-B; Albertsons LLC and other national and regional retailers.

Other “cupcakeries” are tying into local properties to generate buzz while not becoming full-fledged official sponsors. In Chicago, Sprinkles Cupcakes earlier this month created a limited-edition red velvet cupcake featuring the NBA Chicago Bulls logo and donated all proceeds from the five days of sales of the $3.25 cupcakes to the team’s CharitaBulls nonprofit arm.

Sprinkles’ Scottsdale, Ariz. location last week ran a promotion with the NFL Arizona Cardinals that offered a free red velvet cupcake to consumers wearing Cardinals-branded apparel. It also has rolled out a Cardinals-branded menu item: a box of two dozen cupcakes decorated with “Go Cards” and red and white dots.

Awareness, Sales Rights Drive Cupcake Gourmet’s Deals
Cupcake Gourmet partnered with the Islanders and Ducks primarily to build visibility.

“This provides an opportunity to spread the word and reach a larger audience; it’s a chance to spread peace, love and cupcakes to the masses,” said Amy Brady, the company’s owner.

The company, which operates a retail outlet in Huntington, N.Y., has status as official cupcake supplier to the Islanders and Nassau Veterans Memorial Coliseum. The tie affords sales rights at Islanders games, as well as ice shows, concerts and other events that take place at the venue throughout the year.

Cupcake Gourmet activates the tie with cupcakes bearing the Islanders logo. It also has created cupcakes featuring the image and number of several players on the team.

The company does not have the right to sell co-branded cupcakes outside the venue, said Justin Johnson, the team’s senior vice president of corporate sales and marketing.

For on-site sales, Cupcake Gourmet also creates specialty cupcakes for concerts and other activities at the venue. For example, the company created a cupcake bearing the number 15 for a recent Taylor Swift concert to commemorate her song titled “Fifteen.”

The company also is using the sponsorship as a B2B platform to build its wholesale and catering business among other team and venue sponsors. The partnership already has led to discussions with Canon U.S.A. Inc. and other sponsors, said Johnson, who facilitates introductions and discussions through the team’s B2B networking council.

The sponsorship provides the Islanders with a new food offering for patrons, said Johnson, noting the team this year took over management of the Nassau Coliseum.

“The partnership has extended a gourmet food opportunity within the arena,” Johnson said, adding that the venue also serves sushi and kosher food products.

Changing The World Through Sponsorship
Cupcakes Changing The World is using its new partnership with the Discover Orange Bowl and the Orange Bowl Committee to support its fundraising mission.

The organization donates “100 percent of its net profit” to Shape: Students Changing the World, a 501(c)(3) organization that teaches philanthropy to high school students. Shape provides funds to students, who then make grants to local charities.

Cupcakes Changing the World is selling Orange Bowl-themed cupcakes at football and cheerleading events supported by the Orange Bowl Youth Football Alliance. The events take place at more than 45 parks in South Florida over a 12- week period and feature roughly 16,000 participants.

The Orange Bowl Committee receives $1 from each on-site sale, as well as a percentage of profits from cupcakes sold through ChangingTheWorld.org.

The Orange Bowl Committee turns over funds raised from the cupcake sales to its youth football alliance, said Jarrett Nasca, the committee’s vice president of partnerships. “This is all about giving back to the community, and doing it in a creative way.”

“We leverage each other’s strengths,” said Joan Papadakis, the Cupcakes Changing the World’s chief financial officer. “We created excitement with the Orange Bowl cupcake, and they have given us the opportunity to sell the cupcakes and raise money for both organizations.”

Sources
Cupcakes Changing The World, Tel: 305/370-7130
Cupcake Gourmet, Inc., Tel: 631/683-4100
New York Islanders, Tel: 516/501-6700
Orange Bowl Committee, Tel: 305/341-4777

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