Selling Like Cupcakes

Online companies compete to fill a local pastry void in Israel

Within a few months, Israel has gone from having no cupcakes to cupcake wars. The country now has no fewer than three startups competing for their taste buds. None of the companies have storefronts but operate online.

In March, former journalist Ofer Yeger opened "Cupcakes" ( Hayley Rabie, 28, a recent immigrant from Cape Town, and Manchester native Danielle Levy started "I Love Cupcakes" (, which they claim to be Israel's first cupcake store.

The third entrepreneur, Debbie Stein, the Minneapolis-born co-founder of "TLV Cupcake Co." ( openly admits she was inspired by "I Love Cupcakes." On her blog, "An American in Tel Aviv," Stein recalls how she decided to venture into the baking business in addition to running a fundraising consulting firm.

"When we had parties, instead of buying dessert, I'd just put out cupcakes," she wrote. She says the feedback was so positive friends encouraged her to open a business, but she felt tied to her job. "However, that all changed about a month ago when I learned there were some other girls opening a cupcake business in Israel," she explains. "My initial reaction was 'Hell no - if anyone is bringing cupcakes to Israel, it is me.'"

Cupcakes have been trendy in the United States and other English-speaking countries for years, yet the craze never made it to Israel. Still, business is going well so far, according to Rabie. They're selling up to 200 regular-sized and mini cupcakes a week and are now teaming up with a national caterer to create wedding cupcakes, she said.

And while Ofer Yeger of "Cupcakes" said she was inspired by a recent visit to New York - where cupcakes are "the hottest accessory" - the two Anglo entrepreneurs were prompted by the discovery in 2008 after they both immigrated that their favorite dessert was absent from Israeli menus.

"We found this strange as we associate the cupcake with simchas [family celebrations] and Israelis are great at celebrating," explains Rabie, who first met Levy three years ago in Israel and bumped into her last year at Ulpan Gordon. "We knew for sure they would be popular with the English speaking communities in Israel, but we also knew we would face more of a challenge with the Israeli market, a large portion of whom may not be familiar with the product."

Indeed, many native Israelis, she says, don't know the difference between a muffin and a cupcake, which is sweeter, and adds it's not a given an American product will succeed here. "We are very aware of creating cupcakes that will please the Israeli palette and creating the Israeli version of the cupcake."