Sprinkled with smarts
The gig: Sprinkles Cupcakes, the Beverly Hills chain beloved by bold-faced Hollywood names such as Tom Cruise and Ryan Seacrest, launched in 2005 with six workers, including founders Candace and Charles Nelson. The company has since expanded to 400 employees in 14 U.S. stores, two of which focus on ice cream instead of cupcakes. At its original Beverly Hills store last year, the Nelsons opened their first around-the-clock cupcake ATM, dispensing more than 1,000 of the treats a day. Sprinkles also peddles cupcakes out of a food truck and sells mixes at Williams-Sonoma stores. Candace is a judge on the Food Network show “Cupcake Wars.”
A movable feast: Candace, 38, was raised in Indonesia, where she had to boil water for drinking and often went without electricity. She learned to bake early because it was difficult to find her favorite American treats, such as brownies. She moved to the U.S. for high school, graduated from Wesleyan University in 1996 with an economics degree, and was recruited directly into the financial analyst program at Alex. Brown & Sons. Later, she studied at Tante Marie’s Professional Pastry Program in San Francisco. A major inspiration for her bakery prowess? Her French-born great-grandmother, who whipped up simple yet delectable desserts at her San Francisco restaurant Craig’s Fine Foods in the 1930s.
Midwest upbringing: Charles, 43, is an Oklahoma City native whose family held weekly gatherings marked by homemade sweets. As a teenager, Charles often patronized only restaurants with top-quality desserts. He spent his undergraduate years at the University of Arizona and then went on to the Darden School of Business at the University of Virginia.
Banking before bakery: The couple met as investment bankers focusing on tech at a boutique San Francisco firm in the 1990s. They worked “long and arduous” hours handling initial public offerings and mergers and acquisitions, regularly ordering dinner into the office and rarely enjoying weekends. “But we had a similar, humorous attitude about things even during the most stressful moments,” Candace said. Asked whether Sprinkles has plans to debut on the public market, she laughs. “I have bad flashbacks about IPOs now,” she said.
Homemade cakes: When the dot-com bust hit, the pair began reconsidering their hectic lifestyles. Friends for years before they began dating, they married in 2001 at a ranch in the Sonoma wine country. Candace launched a custom cake business from their home but soon began developing a cupcake-only business plan. “It was an unproven concept and a big risk,” she said. With no outside funding available, she and Charles pooled their savings, moved to Los Angeles and eventually opened Sprinkles in a 600-square-foot shop. Within hours on their first day, they had sold out of cupcakes.
Middle East foray: International franchise operator M.H. Alshaya Co., which works with dozens of major Western brands such as H&M; and Harry Nichols, recently struck a deal with the Nelsons to bring Sprinkles to 34 locations in 10 Middle East countries. In Kuwait, the company opened a stop this winter, two doors down from a Cheesecake Factory in an upscale mall. The couple have had to adapt to local tastes and rules — ingredients with alcohol, such as Madagascar bourbon vanilla, are banned — while retaining the tastes that the area’s wealthy young families demand. “So many of the customers there have had cupcakes in Beverly Hills,” Candace said. “If it doesn’t taste the same, they’ll know.”
Starstruck: Sprinkles has hordes of celebrity fans, including Oprah Winfrey and Blake Lively. One of Candace’s favorite moments was meeting Barbra Streisand. “Not only is she an icon, but she has an amazing knowledge of baking,” Candace said. “She wanted to discuss specific baking points and recipes with me. I was thrilled.”
Beyond cupcakes: The Nelsons, who have two young sons, expect to eventually explore other desserts. They may consider selling ice cream through third parties in grocery stores. Over the next year, eight to 10 more Sprinkles stores will open domestically. Concept shops that combine all three Sprinkles offerings — cupcakes, ice cream and the cupcake ATM — are set to debut in Atlanta, New York and Las Vegas.
Advice: Do something different, Candace suggests to up-and-coming entrepreneurs. “People had never seen a cupcakes-only bakery before Sprinkles,” she said. “It certainly confounded a few people at first, but at the end of the day, it got everyone talking.”
