The dot-com bust—and losing her job—gave Candace Nelson the nudge she needed to pursue her passion: desserts. She sought training as a pastry chef then subsequently created an everyday dessert, her updated version of the cupcake. Katie and Esther visit with the Food Network’s Candace Nelson, founder of Sprinkles Cupcakes, the original cupcake bakery.
Katie: This is Katie Laird with the BusinessMakers radio show heard here and online at TheBusinessMakers.com Esther Steinfeld and I are here today in what really surmounts to be the most magical, iced, sugary wonderful that I believe that I've ever been in with none other than Candace Nelson herself of Sprinkles Cupcakes. Candace welcome to the show.
Candace: Thank you so much for having me.
Katie: This is a truly amazing experience. We're sitting back here in an office looking out on workers assembling, decorating cupcakes. I mean anyone that's listened to this show knows that cupcakes are one of my life's passion. So I've got family. I've got great friends and then I have cupcakes and now we have you.
Candace: Well you are certainly a kindred spirit and I have to agree that the view from this office that we're sitting in here is quite nice. Piles and piles and lines of cupcakes.
Katie: So tell us a little bit about Sprinkles Cupcakes' story.
Candace: Oh gosh. Where do I even begin? I think I have to begin when I graduated college. I decided to go into the financial industry. I was working at an investment bank working with high tech companies and then it was the dot com boom of the late '90s. So I went on to work for an Internet company. Then everyone remembers or maybe they don't but there was the subsequent dot com bust.
Katie: Oh yes, I remember.
Candace: A lot of people were out of work including myself. I like to call that period of time my early mid-life crisis because I was still very young at the time but I had the opportunity - challenge/opportunity of not having a job and not having that steady paycheck coming in. I had the opportunity to ask myself what it was I really loved to do and wanted to do with my life and my career. I decided that I really loved to bake and I wanted to test my interest in baking on a serious level. So I went to pastry school and just started baking cakes and cupcakes and other desserts out of my little kitchen. What I found was I wanted to create something that people could conceivably eat every day. Special occasion cakes really are just that. They are reserved for special occasions.
Katie: Absolutely. That fondant icing and crazy rosettes on it.
Katie: Not every day.
Candace: They're quite ornate and people feel a little too decadent buying a cake just for something other than a birthday or an anniversary. So I wanted to meld the idea of special occasion cake with the fabulous ingredients and the beautiful, artful design with a dessert that you could eat every day. So the idea of elevating the lowly cupcake was born. That in itself, in a nutshell, is what Sprinkles really is. It's sort of the new modern day version of what we all grew up with which was the cupcake. When we began my husband and I opened our first store almost six years ago. We were the first ever cupcakes only bakery.
Katie: The first ever?
Candace: The first ever cupcakes only bakery.
Katie: Holy cow.
Candace: People thought, "What is this strange place?" People would come by and say, "Well what do you sell?"
Katie: Main desserts?
Candace: Yeah. The answer would be, "Cupcakes." They'd say, "And what else?" We'd say, "No, that's it."
Katie: No seriously.
Candace: But when they bit into one of our cupcakes they understood what we were doing because we were making with the best ingredients. We weren't using that crazy shortening and those garishly colored waxy sprinkles like we all used to see at the supermarket.
Katie: Absolutely. Red dye 5 and Oscar hanging off the top of it. Yeah.
Candace: Exactly. We were bringing the gourmet ingredients of special occasion cakes and the artful elegant nature of special occasion cakes into the simple package of a cupcake.
Katie: How wonderful. It's so funny to me just realizing that there was a time that there were not cupcake only shops.
Candace: I know.
Katie: I mean I can't think of anything that's exploded more from a culinary perspective at least in the U.S. than cupcakes. This is your doing, lady.
Candace: Oh well thank you for that credit. Certainly I have been surprised myself by what has transpired. I mean the phenomenon that has ensured it's not just national. It's international. We receive e-mails from our customers and fans all over the world and on Facebook every day. It's really something to marvel at. I am a judge on a show on the Food Network calLaird Cupcake Wars.
Katie: Absolutely. Religious viewer.
Candace: So it's - thank you. It's a really fun show. I have to say if someone had told me when I was a little kid that I would grow up to be a cupcake judge taster on TV I would have thought, "You're insane, but how do I get that job?"
Katie: Exactly. That's better than a ballerina. Like, "This is perfect."
Candace: That's perfect. Actually there are a lot of kids who watch the show and the number one question I get is, "How do I get to be a cupcake judge when I grow up?"
Katie: Exactly. So now that the craze has spread I mean what's it like for you being the very first? What has this done for your business and really for your outlook on the future of the cupcake world?
Candace: It's very interesting because when we first opened as I said we had a lot of sort of raised eyebrows. People didn't understand what we were trying to do. "What's so special about cupcakes? What's so special about your cupcakes?" It was an education process. Every time we'd open a new store we'd come into a new market and we'd have to educate the public on, "Cupcakes are great. They're perfectly portable. They're perfect for kids and adults." Everything that we love and have come to know and love about cupcakes we'd have to remind people about. But now that when we go into a new market people get it. They've heard about the cupcake phenomenon. They've heard about the cupcake trend. They may have already a couple cupcake shops in their neighborhood by the time we've come along. So the consumers are already educated and it's just - the growing phenomenon has really just raised awareness overall about cupcakes.
Katie: Okay. So I guess the goal is you get them in the door, they take one bite and then there's no other place to go for cupcakes. Is that right?
Candace: We hope so. What's so wonderful about the cupcake connoisseur community is that people are so passionate. They're passionate about their local cupcake bakery and they're passionate about their specific flavors. So the great thing about this proliferation of cupcake bakeries is that there really is something for everyone.
Katie: Absolutely. So what are some of your trademarks at Sprinkles? How do you continue to differentiate yourself beyond all of those other local and national chains?
Candace: Absolutely. Well the one thing we are really, really truly committed to is baking fresh. This has been something we've been committed to since the very beginning in that we staff several shifts of bakers throughout the day. So whereas historically a lot of bakeries the baker would come in in the early, early morning, bake off what they needed for the day and if you got there right before closing time maybe you were lucky your flavor was still there, maybe not. Whatever was still there had been sitting around all day. Well in my mind if you're going to expend the calories on a cupcake it better be worth it. So it better be all the good stuff in there and it better be soft and baked within the last few hours and it needs to satisfy a craving to be worth those calories.
So we are baking fresh all day long, try to be as just in time as possible so that the cupcake you're walking out the door with was baked a few hours before. When you come in at the end of the day there's a full array of cupcake flavors to choose from. Now what does that mean? That means that we have sometimes higher labor costs but that's worth it to us. That also means that at the end of the day we are going to have leftovers. We don't sell anything the next day since we are so committed to baking fresh. So what we do and this is another core value of Sprinkles is our commitment to giving back to our local community. What we do with those leftovers is we donate to local food banks and homeless shelters in each of our local markets. So it's sort of a win/win.
Katie: Oh wow. Absolutely. I had no idea actually. That's really cool.
Candace: Then beyond that we are committed to using the best ingredients, Belgian chocolate, Nielsen-Massey pure vanilla extract, lots and lots of butter - sorry guys - lots and lots of butter and also a real commitment to service. We want to make sure your cupcakes are packed perfectly. They're served with a smile. It's a happy place.
Katie: It is a happy place.
Candace: And that they arrive at your home or at your party in perfect and pristine condition. They're little pieces of edible art in our mind.
Katie: I love it. And love. Little edible loves. One of the most striking things is that intimacy when you walk into one of your shops. Now that you've branched out - you're on store number eight now and growing and counting. How do you keep that same feel and that same corporate flavor - no pun intended - throughout all of your stores?
Candace: Well it's interesting because I think at a certain point people want to start to brand you as a chain and certainly in the sense that we have eight locations we're a chain because we have several locations but I prefer to think of ourselves as a mom and pop because that's essentially and quite literally what we are. I'm the mom and my husband's the pop. We do want to have our hands on everything. We're definitely hands on or we could be calLaird I guess micromanagers to a certain extent but because we have stores in various cities across the country it does mean that we have to be on the road and what we do to make sure that true Sprinkles spirit is reflected in all of our stores is we hire and train all of our managers in the Beverly Hills store which was our first location. We train them for several months to make sure they understand exactly how we like things done and to make sure that they have an opportunity to get to know Charles and myself. Then we send them out to whatever store they're going to.
Esther: I have a question.
Esther: So what about the hard stuff? What's been the challenge or what have been the challenges? I mean starting a business - obviously little kids ask you, "I want to be a cupcake judge," and you think it's so easy but the truth is it's the hardest thing in the world to do is to start a business and grow it to where you've grown it. So what have been the challenges you've faced?
Candace: That's a great question. I think from a baker's point of view I'm the Executive Pastry Chef of Sprinkles and that's my background is baking. I developed all the recipes. So for me one of the early things that was really difficult was realizing that my little two dozen yielding recipes weren't going to fly. Within the first few days of opening our first store we were sold out within just a couple of hours. So my husband and I kind of looked at each other and thought, "Well clearly we're going to need to get some bigger mixers, some bigger equipment" -
Katie: Yeah, that's not scalable.
Candace: - scale up our recipes," and everything just needed to be times ten. Sort of one of the concerns we had which was, "Will we have any customers," became another concern which was, "We don't have enough cupcakes for all these customers." So in the early days it really was - Charles and I both had a business background but we never worked in a bakery or a restaurant before. I had worked out of my little kitchen. We didn't know what equipment to buy. We didn't know how to scale up recipes. We didn't know who our vendors were going to be. So we really, really learned on the fly. Then as we've grown and obviously things have become more systematic the biggest issue for us has been just finding those key people because each one of our bakeries is like a child to us.
I mean we've literally birthed it and put everything we have into each of our stores and when we're away from that store we want to make sure that someone's treating it with the same respect and care that we would. We always like to look for people that have a love for cupcakes obviously and also just a very generous and genuine way about them because at the end of the day we're in the hospitality industry and we want people to feel cared for. Even though they may be in and out of the store in five minutes they're spending their hard earned money on a luxury product. It's a luxury product. It may be an affordable luxury product but it's still a $3.50 cupcake and we want them to feel as if they've been really cared for during that short experience in our store. So we want people who are generous, spirited and finding those people - they are out there but it's always a search.
Esther: So it sounds like you guys are not going to stop growing anytime soon, which is great news. I mean cupcake businesses do seem to kind of come and go but yours has really stuck. Obviously you were the first and you were the trailblazer. How do you maintain that position that you've in right now?
Candace: Well you're right. We are still growing. We're on eight locations right now but in just a few weeks we'll be opening in Washington, D.C. and then this spring we'll be in New York City. So we're finally headed to the East Coast.
Katie: Oh congratulations.
Candace: We'll truly be a national cupcake bakery which is very exciting. In terms of keeping that edge I believe in competition. I think it's the American way and it keeps all of us on our toes. Charles and I strive for perfection every day. I think that's innate to us. I think we'd be doing that anyway, but certainly when there's a cupcake shop right down the street it makes us work all the harder to make sure that ours are the best.
Katie: Oh yeah. So do you have any stealth cupcake tastings like going incognito to other cupcake bakeries or -
Candace: Well you know I do my research. I go to other cupcake bakeries and I also go to other dessert places. I eat pie. I eat ice cream. I eat cookies. I got into this business because I have a ridiculous sweet tooth.
Katie: And yet you're so slim. I don't understand it.
Candace: Oh you're very sweet. Well it must be just running a small business but no, it's not for lack of eating a lot of sugar.
Katie: So I mean given what a game changer Sprinkles was definitely in the cupcake world but in the dessert world in general where are you going next? I mean what happens now? Is it like square shaped cupcakes or what's in the future?
Candace: Well I think we want to keep executing on our vision. It has changed very much from day one which was just to provide the best tasting cupcake that anyone had ever tasted. Do this one thing and do it really, really well. Now having said that do I think we might branch out into some other desserts in the future? Quite possibly, but they wouldn't necessarily within a Sprinkles bakery. It could be another concept that we do. I mean we're creative people. I love sweets and we like to play. So there might be something else coming down the road for Sprinkles in the future.
Katie: Well might I just offer both Esther and I as any tasters that you might need in any future endeavor. We are here for you Candace.
Candace: I appreciate that. Strangely we do run into that problem where Charles and I literally look at each other and we think, "We can't taste another bite of this," and we do actually call on people to help us out. So thank you for that offer.
Katie: So basically you're the best friend to have ever in the entire world. That is wonderful. So we have just one last question for you Candace. Given the good times, the bad times, the exciting times what is one piece of advice that you wish someone had told you going into the cupcake business?
Candace: I should have worked at a bakery before I opened my own. I have definitely have always been one of those people that figures, "I can figure it out," and I certainly did figure it out.
Katie: You did.
Candace: It took a little longer than it probably needed to. I should have interned at a bakery prior to opening my own. It doesn't hurt to get that experience and really, really test your interest. I mean I'm lucky that six years in I still love to bake and eat cupcakes but what if I'd worked at someone's bakery and decided, "Oh god, I couldn't possibly do this for more than a couple weeks"?
Candace: So it's great to test that interest and get some experience while you're at it. Why not?
Katie: Excellent. Candace, thank you so much. This has been a most delicious conversation. [Laughter] We loved having you on the show.
Candace: It was a lot of fun. Thank you so much for having me.
Katie: So for our listeners can you tell us where we can find you online if we don't have a Sprinkles down the street?
Candace: Absolutely. Very simple to find us at Sprinkles.com and if you don't have a Sprinkles bakery in your neighborhood we also sell our cupcake mixes through Williams-Sonoma nationwide or you can also order them through our Website. Those are really fun to bake at home with just a few fresh ingredients that you need to add.
Katie: Wonderful. Thanks so much Candace.
Candace: Okay, thank you.