Sprinkles Cupcakes Development

Question: How to translate customer needs into an outstanding product?

Company Overview: Sprinkles Cupcakes is a cupcake bakery cafe started in Beverly Hills by Candace Nelson and her husband Charles. Sprinkles prides itself on using the best ingredients in its cupcakes to provide consumers with the pleasure of great taste or memories of childhood and family. Cupcakes are priced ~$3 and you’ll often see a line out the door at the Sprinkles store at the Stanford Shopping Center. While the Sprinkles “product” is both flavorful cupcakes and a cupcake dining experience, I will focus on the cupcake flavor development process.

Introduction: There is no formalized process for new product development like the stage gate process you’ll find in traditional consumer products companies. However, Sprinkles does focus on collecting consumer information to inform which cupcake flavors to develop and launch. The Founders drive product development and decision-making.

Step 1 - Listen to Customer Needs: The Founders collect and take seriously requests from customers. Customer requests are submitted via multiple channels (Facebook, twitter, eat@sprinkles.com, in-store requests passed along to store managers and then to the corporate office, and snail mail). The Founders also collect positive and negative customer feedback from blog reviews. Of most surprise to me is that corporate collects feedback from secret shoppers who visit the visit the 7 stores monthly.

Step 2 - Develop New Cupcake Flavors: The Founder, Candace, does a lot of research when developing new flavors because quality is of core importance. She looks for the best, most pure ingredients. So, if for example she wants to make a cupcake with hazelnut frosting, she will look for a hazelnut paste that is made with pure hazelnuts and no additives.

Step 3 - Test & Learn: Sprinkles launches a new cupcake flavor for a week in their stores to test how popular the flavor will be. Typically, Sprinkles launches new cupcakes to coincide with holidays and seasons because they can sell a cupcake not just as a cupcake, but as Thanksgiving dessert. I find using seasons to drive “newness” a smart move because the business can naturally get out of the flavor when the season ends. Similarly, traditional mass retailers use “in-and-out” skus to gauge customer response to new products or launch a new promotion.

Step 4 - Measure & Revise: Based on the in-market results, Sprinkles will either increase or stop production of the flavor. Last year, their most popular seasonal cupcake, Chocolate Marshmallow, was added as a daily flavor at Sprinkles. Evaluating the in-market results of new flavors allows Sprinkles to improve their cupcake flavor assortment to reflect the preferences of customers in their store markets.

-Grace Ko, Section 2