As with anything trendy, a version will soon make its way to retail chain shelves. Crumbs Bake Shop (CRMBW) recently inked a deal with BJ's Wholesale Club for the latter to carry a host of its offerings. Prominent among these is the Crumbnut, the bakery's version of Ansel's trademarked treat.
Starbucks on the Shelves
Brick-and-mortar stores can only sell so much product, so some of the more muscular food and beverage companies have moved into the supermarket with retail versions. Selling their goods in retail outlets provides a substantial growth opportunity.
Starbucks (SBUX) is a good example. It makes extra coin selling its coffee in various iterations, such as VIA instant mix and single-serve pods for coffee machines manufactured by Keurig Green Mountain (GMCR).
Similarly, fellow java slinger Dunkin' Donuts -- the core business unit of Dunkin' Brands (DNKN) -- also occupies retail space in the supermarket coffee section thanks to a distribution agreement with jelly giant J.M. Smucker (SJM). According to J.M. Smucker, sales of Dunkin' Donuts ground coffee by volume grew at an annual rate of 11 percent in fiscal 2013.
In fact, a customer could easily make a multi-course meal with supermarket versions of brick-and-mortar comestible offerings, such as those from California Pizza Kitchen, Boston Market and Cheesecake Factory (CAKE).
Picking Up the Crumbs
Those sorts of numbers are undoubtedly enticing for a food retailer like Crumbs. The food service business is a difficult one, with high overhead (rent for stores isn't cheap these days), and plenty of competition no matter the market niche.
Crumbs needs help. Its initial public offering followed the surge in popularity of designer cupcakes, the "in" dessert before the Cronut started crowding the oven. But attempting to capitalize on cupcakes hasn't paid off for Crumbs. In the last fiscal three years, in spite of not-bad revenue growth, its attributable net loss has snowballed, from $1.5 million in 2011 to $7.7 million the following year, to a queasy $15.3 million in 2013.
Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Keurig Green Mountain and Starbucks and owns shares of Starbucks.