The big overarching theme in the last two years in the baking industry, unsurprisingly, is how bakeries are dealing with the challenges brought forth by the COVID-19 pandemic. No matter their size, businesses have had to adjust to a new way of doing things – everything from food safety and labor shortages to marketing and product innovation.

That key word, innovation, is what is on the mind of bakery owners. How do you stand out, when you’re not only competing with other bakeries and foodservice establishments, but you’re also going up against a pandemic that is preventing consumers from living their normal lives and is altering their shopping habits?

One shining example of this is Sprinkles (formerly Sprinkles Cupcakes). Established in 2005 by Candace Nelson as “the world’s first cupcake bakery,” Sprinkles has grown to 24 locations throughout the United States, in addition to many more Cupcake ATM’s. In March of 2012, Sprinkles provided a new innovation in the baking world with its ATM vending system dispensed cupcakes (boxed and selling for $4 apiece), available 24 hour a day, 7 days a week.

Long before convenience was the name of the game in the baking world, Sprinkles’ ATM’s expanded the chain’s reach by selling products directly to consumers through automated systems attached to brick-and-mortar stores. Automated retailing offered a chance to access additional customers with its products and more cost-effectively grow revenues.

The ATM’s now can be found in several states, and you may even see one when you step into the terminal coming off your flight into Las Vegas McCarran International Airport. They will soon roll out in additional airports such as Dallas-Fort Worth and LAX.

The latest metamorphosis for Sprinkles has taken it beyond its former moniker into uncharted territory, with an expansion of direct-to-consumer offerings including a line of chocolates.

Emphasis on chocolate

Last year, Sprinkles moved into the world of candy with chocolate bars based on popular cupcake flavors.

In the spring of 2021, Sprinkles asked the question, “Why stop at cupcakes?” with a new line of products. The cupcake bakery chain moved to the world of candy with new chocolate bars based on popular cupcake flavors.

Sprinkles Chocolate is a line of premium chocolates inspired by the bakery’s best-selling cupcake flavors: Red Velvet, Dark Chocolate, Black & White, and Sprinkle. Each piece is handcrafted and made from fine Belgian chocolate with sweet and unique flavors, featuring the bakery’s signature swirl and modern dots and sprinkles.

The new chocolate bar line includes:

  • Red Velvet – Belgian milk and white chocolate finished with a signature swirl and modern dot
  • Dark Chocolate – Belgian dark chocolate finished a signature swirl and modern dot
  • Black & White – Belgian dark chocolate covered with Belgian white chocolate, topped with chocolate sprinkles
  • Sprinkle – Belgian white chocolate with colorful non pareil sprinkles topped with colorful non pareil sprinkles

The chocolate bars are available daily at Sprinkles locations throughout the US as well as online for nationwide shipping. They can be purchased individually or as part of assorted gift box. The four flavors are also available in chocolate-covered popcorn, featuring caramel drizzled with Sprinkles’ signature, Belgian chocolate flavors.

In the coming years, this line will grow with new flavors as Sprinkles looks to provide expanded snacking options for its customers.

A laser focus on digital

“Prior to the pandemic, we had a push more into digital ordering, so we were in a fortunate place.” - Dan Mesches, CEO, Sprinkles

Just like every other bakery, Sprinkles had to adapt the changing times, says chief executive officer Dan Mesches.

“Prior to the pandemic, we had a push more into digital ordering, so we were in a fortunate place on that,” he says. “We had a great app working before the pandemic and we’ve only just made it better. We were in the process of updating our website and we launched a Shopify version [in 2021] to make it easier for our guests to get our baked goods.”

The website features a fresh layout that better showcases Sprinkles’ latest product news. Additionally, the website has increased ordering capabilities, including pickup and delivery options, same day/ASAP or future order availability and new catering and custom ordering featuring a full menu with design-your-own customization options.

The Sprinkles Now app allows customers to place an order through the app, track deliveries and save favorite orders for easy and fast reordering. The Sprinkles Perks rewards program gives customers the ability to earn points for every purchase to redeem on special deals and birthday giveaways. Users can also get notifications for new menu items and specials.

During the pandemic, Sprinkles also took the opportunity to revamp its store design for safety and convenience. All of the bakeries have changed to glass cases and have done away with static menus in favor of monitors behind the counters. Additionally, pre-orders can be picked up directly from shelving to limit face-to-face interactions. Stores will also feature ordering kiosks that are simple to use, especially with redeeming rewards.

Mesches says that the chain has also better integrated its ATM’s, one of the more unique elements of its business, into its system.

“We’ve had ATM’s now for almost ten years, and during the pandemic we saw huge increases in something that was already busy anyway. Before the pandemic, we had begun putting them in airports and different shopping centers which has been a big success,” he says. “The product is fresh-baked every day and changed out every day.”

Mesches points out that Sprinkles was able to speed up the timeline for these changes to better serve its customers, which has paid off.

“Things that maybe would have happened over three years, happened over a year,” he says. “We’ve seen an increase in our sales not just over [2020], but 2018 and 2019 also.”

Flavor innovation

Innovation is key to Sprinkles' success, such as its collaboration with wellness brand Golde.

These business adaptations would be futile if the bakery’s flavors weren’t appealing to customers, and to keep things fresh Sprinkles looks to continuously innovate in the flavor and product realm as well.

One of Sprinkles’ most exciting cupcake flavors (and collaborations) of 2021 was its limited-edition Matcha Glow Up cupcake. It integrated wellness brand Golde’s top-selling superfoods products into its original recipe for the chain’s first-ever functional cupcake and a way to provide customers with an indulgent way to self-care.

The Matcha Glow Up cupcake featured a delicate matcha cake, filled with a Coconut Collagen cream core and frosted with a yuzu citrus buttercream. It was made with Golde’s Pure Matcha and Coconut Collagen Boost and was available at all Sprinkles bakeries for two days only on September 24-25.

Few bakeries utilize limited-time offers (LTO’s) quite like Sprinkles. In early January, for example, the bakery offered multiple unique cupcake flavors only available for a few days.

The Happy New Sprinkle cupcake, available from January 1-5, featured birthday cake filled with nonpareils, topped with vanilla frosting and finished with nonpareil sprinkles and a 2022 decoration. The Flamin’ Hot Cheetos cupcake, first introduced in 2018 and brought back for January 10 only for pick-up and delivery of pre-orders, feature vanilla cake filled with Flamin’ Hot Cheetos, topped with creamy white cheddar frosting and dusted with crushed spicy Cheetos.

Although specializing in cupcakes, Sprinkles has expanded its product offerings well beyond that. Cookies, including a new red velvet cookie that just launched, and naked cakes have been on the menu for years. The aforementioned chocolate line debuted in 2021, and at-home kits were created in 2020 as a response to the pandemic. These kits supply mixes, recipes, frosting, sprinkles, decorations, baking cups and spatulas, all to create a fun activity for individuals and families during a time when that was needed.

Sprinkles’ development team is made up of passionate individuals from across the food industry, including restaurants, bakeries, CPG (consumer packaged goods) and more. They’re constantly using great food, with social media being a primary source, as inspiration in their planning sessions.

All of its innovations have changed Sprinkle’s trajectory for the better. The biggest difference since the company was founded is how it applied that innovation to each individual bakery.

“What’s different is really learning how to manage bakeries across the United States,” Mesches says. “Really making sure we have a phenomenal product at every bakery. And not that it didn’t before, it just takes time to learn that and make sure it works correctly.”

Mesches is excited about the future of Sprinkles. Demand for its products throughout the country and beyond has accelerated growth. In the next few years, locations will pop up in new areas where there is dense customer traffic.

“You’ll see our growth continue in company-owned stores and in ATM’s. You’ll see us franchising domestically with great restauranteurs and bakers. You’ll likely see international as well,” he says.