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Back in 2003, Mia and Jason Bauer started a business and started a global trend. Crumbs Bake Shop in New York City. Not only do their signature gourmet oversized cupcakes draw lines outside the store, but frosting-covered superstars have made cupcakes the center of popular entertainment, from movies to reality shows. It has sparked a cultural phenomenon. At its peak, CRUMBS boasted that he sold more than 1 million cupcakes a month.
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After ten years in business, Mia and Jason withdrew and, within a few years, sadly watched from the sidelines as CRUMBS’s new owners made unfortunate moves that led to CRUMBS’s downfall.
But cookies (and cupcakes) never completely fell apart, and through a combination of persistence and luck, the company returned to Jason and Mia’s hands and flourished once again. We spoke to the couple about the rise, fall, and re-emergence of their bakery to learn their secrets to success and a new approach to getting their sweets into the hands of hungry people. Here are some highlights from that conversation.
The arrival of the cupcake boom
Jason Bauer: Mia and I started the CRUMBS Bakeshop brand in 2003 in New York City. We were just dating at the time and wanted to start a business together. Mia was a lawyer and I was in the licensing business. We wanted a change. People thought we were crazy.
Mia Bauer: I was a good baker, and we both felt that neighborhood bakeries were disappearing in New York. I grew up working there so it was very nostalgic. We wanted to create a place where families could come with their kids and know their names and how they like their coffee.
JB: So we passed Mia’s recipe on to a family friend who happens to own a commercial bakery, and he showed us how to scale it up as a commercial recipe. When we first opened, we had 150 different products, including muffins, scones, cookies, and croissants. But it was the cupcakes that really caught people’s attention. This was long before the cupcake craze, and people had never seen oversized decorated cupcakes like this before. We kept selling them out and felt like we were trying to accomplish something.
Credit: CRUMBS Bakeshop
street marketing
JB: We purposely use transparent clamshell packaging and will place it in a transparent shopping bag. So if someone was walking somewhere with a cupcake, people would see it and say, “Oh my god, what is this?”
MB: It created a huge buzz in the city, with lines forming out the door every day.
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big exit
JB: Nine years later, we have 50 retail stores in 12 states. We were selling a million cupcakes a month. We were approached by a SPAC that wanted to acquire our company, and were able to negotiate very favorable terms. I had some cash in my pocket, but ended up with a lot of inventory. They took over the company. Mia and I left. They hired the former chairman and CEO of a major clothing brand called Aéropotelle. The vision was to make it a shopping mall brand like Cinnabon or Auntie Anne’s. It took us about four years to destroy everything we had built. And by 2016 it was gone.
MB: It was mentally tough because it was our baby. And because he owned all the stock in the bankrupt company, he was hurt financially.
CRUMBS Bakeshop Reborn
JB: I spent about four and a half years at WeWork during this frenzy. When that collapsed, I was doing trademark research for new opportunities. This was during a pandemic. And for some reason I decided to type CRUMBS Bakeshop. And said that it is dead, abandoned, cannot be revived. They let the trademark lapse. So that night we bought it back for $350.
MB: It’s interesting because we previously tried to buy it back for a much higher price and were turned down. This kind of thing doesn’t usually happen! It really felt like it was meant to be.
Same formula, new model
JB: Although we love retail, we decided to launch a CPG product line for supermarkets rather than brick-and-mortar stores. We felt this was a good move as we tested brand awareness and brand equity was still very strong. People had an emotional connection to the CRUMBS brand. We loved having a store, but it was clear that e-commerce and supermarkets were the way to go.
MB: Owning a store was such an amazing experience that I couldn’t wait to go back and relive those days. We still maintain relationships with our customers and continue to provide them with delicious products. The recipe has hardly changed. And we’re still very hands-on. Nothing can be scaled up unless me, Jason, and the kids test everything.
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Credit: CRUMBS Bakeshop
Advice for entrepreneurs seeking funding
JB: It’s easy to say, “Let’s only take strategic funding, and only take money from investors who can help us build our business.” Luckily, we’ve been able to do that because we have great heritage brands. This makes financing much easier. We’re not starting Jason and Mia’s Cupcakes from scratch. I always hear nightmare stories from other entrepreneurs trying to raise money in really depressed markets. So my advice is to first try to find investors who can help you grow. But what if you desperately need capital and have non-strategic investors who are interested? Take the money. You are passionate about your business and have a burning desire for it. I have to try my best.
next stage
JB: There are currently 1,000 to 1,500 stores and e-commerce gold berry. Our goal this year is to have reliable distribution east of Chicago. And from next year, we will start expanding further. And what if we get another offer to buy CRUMBS again? Let’s just say that’s not our goal this time.
MB: We want to grow companies that have meaning in people’s lives. We want it to be something you look forward to taking home from the grocery store. That is our joy and pride.