A tiny cafe specializing in housemade marshmallows (as well as marshmallow-based treats and beverages) opened this month on Chicago’s North Side. It joins a growing number of singularly focused concepts around the country slinging everything from polenta to meatballs and Nutella to Russian dumplings called pel’meni.
Here’s a look at how XO Marshmallow Cafe + Wonderland is following design and consumer trends to make the most of its 700 square feet.
Photo credit: Michelle Cox Photography
1. Crowd funding
The marshmallow cafe’s two owners started selling their handmade marshmallows at pop-ups and other events, but they launched a Kickstarter funding campaign after finding their storefront near Loyola University Chicago’s campus. They aimed to raise $6,500, but ended up garnering more than $9,500, thanks to media mentions and strong consumer interest. Donation rewards ranged from a free latte to a choice of three “Mars'halos” (doughnut-shaped marshmallows) to a six-month subscription to the shop’s Marshmallow of the Month Club.
2. Instagram-ready design
Virtually every aspect of the marshmallow cafe—from the “millennial pink” steps emblazoned with the words “You Have Great Taste, Darling!” to the custom neon sign above the counter that reads “I love you s’more”—was created with social media in mind. As with the recent social media frenzy around the Unicorn Frappuccino, fluffy marshmallow treats are inherently photogenic. The cafe’s owners up the odds they’ll get social media love with this colorful spot.
3. No cash allowed
A number of brands have recently gone cashless, forcing customers to pay with credit cards and other electronic options. XO Marshmallow Cafe made its cash-free policy known via its social media accounts as well as a cheery (pink) sign at the counter. Co-owner Lindzi Shanks said she and her business partner chose to do away with cash to keep employees safe, especially late at night.
4. Vibrant flavors
Some 67% of consumers say they like trying new flavors, according to Technomic’s recent Flavor Consumer Trend Report. The marshmallow cafe’s pastry chef continues to experiment with new varieties, including Champagne, green tea, lavender-honey and more. (Though a recent batch of habanero marshmallows turned out far too spicy, Shanks says.)
5. Shared kitchen space
The cafe maximizes its limited footprint by sharing a kitchen with the all-mac and cheese restaurant next door. Since marshmallow treats can be made ahead, there’s little use for a space with a full kitchen. A handheld blowtorch is used to char the marshmallows when crafting made-to-order s’mores treats.
6. Multiple revenue streams
In addition to the cafe, the operators sell their products online and through wholesale accounts. “The cafe is growing our wholesale operations,” Shanks says, noting that the shop’s visibility has already helped land some outside accounts. They’ve had to scale up to a 20-quart mixer to help meet the demand.
7. Allergen- and special diet-friendly
Catering to vegan and vegetarian diners, the marshmallow fluff is made without gelatin. Almost all of the treats are nut-free, except for the Nutella marshmallows, which are kept apart from the rest for food safety reasons. And the concept’s housemade graham crackers are gluten-free.