Next Page: Cupcake Econometrics 101

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Cupcakes by the Numbers
By Christopher Briem

Seeking to ascertain the statistical basis for the cupcake in the Pittsburgh regional economy, with cross-references to national trends and data, we engaged the services of regional economist Christopher Briem. He sometimes comments on cupcake trends at his blog "Null Space."

ensus figures shows that 81 retail baked goods manufacturers form the backbone of the region's entrepreneur-based cupcake production.

 ►Annual Spending

►U.S. Cupcake Cost Index (1978-2006)

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Pittsburgh has a long way to go before it reaches its full cupcake potential. As the first graphic on annual spending shows (click link at right), the average Pittsburgher consumes a mere $399 per year in cereal and baked goods. The challenge is in competing against regions that have much larger appetites for the sweetened carbohydrate. The regional champion is Boston, which consumes $579 per capita on baked goods, 45 percent more than we do. Do these regional disparities reflect disparate tastes or merely the priciness of living in Beantown? Further research is required.

According to the U.S. Bureau of Labor Statistics, 2,080 local bakers comprise the core of the region cupcake workforce. An aging cupcake workforce needs to be replenished lest we be forced to import less-than-fresh baked goods from Cleveland and beyond./p>

At an average annual wage of $19,940, bakers in Pittsburgh lag the rest of the country who earn $23,150. Low relative wages make it difficult to grow a quality cupcake work force. As a region we must succeed at attracting and retaining those students currently enrolled in cupcake baking courses. They will soon become the next generation of cupcake workers.

The United States is facing a widening cupcake gap as consumers buy more foreign-produced pastries than U.S. bakeries are exporting. According to U.S. International Trade Commission statistics, the United States currently imports over $775 million more in baked goods than it exports each year. This cupcake trade gap can only be narrowed by enhancing cupcake productivity and the quality of cupcake output across the nation.

Business leaders already know the downside of rampant cupcake cost inflation. Greater cupcake costs means the local work force must devote larger shares of their disposable income to meet pastry budgets. If left unchecked, regional cupcake cost disparities could inhibit the attractiveness of the region as a place to live and work.

How can Pittsburgh capitalize on new cupcake-induced investment? For a region with a storied history in the creative preparation of fast-food meat patties and french fries, the transformation into a cluster of pastry excellence will take bold initiatives. Policies must foster collaboration among public and private sector pastry initiatives that benefit the entire region. Not all communities are equally served by the cupcake economy and many subregions remain underserved cupcake deserts.

Baking innovation must become a part of the region's culture.

Cupcake tastes are fleeting and investment must not be limited to butter cream or devil's food. No one cupcake will capture consumers' interest for long. Cupcake targeting risks betting the future on yesterday's recipe. A disruptive technology is always on the horizon. You can never know when chocolate chip cookies or other retro-deserts will come into vogue.

Can cupcakery help Pittsburgh achieve its economic potential? What spinoffs will cupcakes have in our neighborhoods and communities?
If Pittsburgh is to grow and prosper, it must become a pastry-friendly investment zone across the region. Only our collective effort will ensure that we retain a cluster of quality bakeries to meet our growing cupcake appetite.
Then again, sometimes a cupcake is just a cupcake.


Christopher Briem is a regional economist at the University of Pittsburgh's University Center for Social and Urban Research (cbriem@pitt.edu).

The Next Page is different every week

-- John Allison (thenextpage@post-gazette.com) 412-263-1915
-- Stacy Innerst, illustrations

 


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