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In 2003, Mia and Jason Bauer started a business—and a global trend—when they opened CRUMBS Bakeshop in New York City. Their oversized, gourmet cupcakes not only had lines out the door, but these frosted superstars sparked a cultural phenomenon that put cupcakes at the center of popular entertainment, from movies to reality shows. At its peak, CRUMBS boasted of selling more than a million cupcakes a month.
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After ten years in business, Mia and Jason left and sadly watched from the sidelines as, within a few years, the new owners of CRUMBS made some unfortunate moves that led to the collapse of CRUMBS.
But the cookies (and cupcakes) didn't quite crumble, and a mix of persistence and good luck landed the company back in the hands of Jason and Mia, where it's thriving again. We spoke to the couple about the rise, fall and revival of their bakery to learn their recipe for success and their new approach to getting their goodies into the hands of hungry people. Here are some highlights from that conversation.
The rise of the cupcake craze
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 were looking for a change. People thought we were crazy.
Mia Bauer: I was a good baker and we both thought the neighborhood bakery was gone in New York. I grew up working in one, so it was very nostalgic for me. We wanted to make a place where families could come with their kids and know their kids' names and know how they liked their coffee.
JB: So we gave Mia's recipes to a family friend who happened to own a commercial bakery, and he showed us how to scale them up as a commercial formula. When we opened, we offered 150 types of items: muffins, cookies, brownies, croissants, you name it. But it was the cupcakes that really caught people's attention. This was way before the cupcake craze and people had never seen these huge, decorated cupcakes before. We kept selling them and knew we were on to something.
Credit: CRUMBS Bakeshop
Street level marketing
JB: We purposely used clear clam packaging and put them in a clean shopping bag. So when someone was walking around with cupcakes, people would see them and say, “Oh my God, what, what is that?”
UK: It created this huge buzz in town and we had lines out the door every day.
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The Great Exodus
JB: After nine years, we had 50 retail locations in 12 states. We sold a million cupcakes a month. We were approached by a SPAC that wanted to buy us and we were able to negotiate very favorable terms. We got some money in our pockets, but in the end we got a lot of shares. They took over the company. Mia and I went out. They hired the former chairman and CEO of a major clothing brand called Aeropostale. The vision was to make it a mall brand, like Cinnabon or Auntie Anne's. Well, it took them about four years to destroy everything we built. And in 2016, she disappeared.
UK: It was emotionally difficult because it was our child. And it hurt us financially because we had all this stock in a company that went bankrupt.
CRUMBS Bakeshop Reborn
JB: I spent about four and a half years at WeWork through all the craziness. When this blew up, I was doing some trademark research for a new opportunity. This was during the pandemic. And for some reason, I just decided to write on CRUMBS Bakeshop. And he said dead, abandoned, lifeless. They let the trademark expire. So that night we bought it back for $350.
UK: And it's interesting because we had previously tried to buy it for a much larger amount and been turned down. Such things do not usually happen! It really felt like it was meant to be.
Same formula, new model
JB: We love retail, but we made the decision to launch a CPG product line for supermarkets instead of brick and mortar. We thought this was a good move because we had tested the brand awareness and the brand equity was still very strong. People had an emotional connection to the CRUMBS brand. We loved having the stores, but it was very clear that e-commerce and supermarkets were the way to go.
UK: It was such an amazing experience to have the shops, we didn't want to try to go back and relive those days. We still have a connection with our customers and we are still offering them delicious products. The recipes have remained almost unchanged. And we are still extremely practical. Nothing grows without me, Jason, and our kids testing everything.
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Credit: CRUMBS Bakeshop
Advice for entrepreneurs seeking funding
JB: It's easy to say, “Only take strategic money. Only take money from investors who can help you build your business.” We've been able to do that, fortunately, because we have a great heritage brand. This makes it much easier for us to raise capital. We're not trying to launch Jason and Mia's Cupcakes from scratch. I hear nightmare stories all the time from other entrepreneurs trying to raise money in a really down market. So my advice would be to first try to find an investor who can help you grow. But what if you desperately need capital and have a non-strategic investor interested? Take the money. You are passionate about your business, you have that burning desire. You should go for it.
The next stage
JB: We are between 1000-1500 stores now and our e-commerce is exclusively active Golden Belly. Our goal for this year is to get really solid distribution east of Chicago. And then next year begin to expand. And if another offer comes to buy CRUMBS from us again? Let's just say that's not our goal this time.
UK: We want to grow a company that makes sense in people's lives. We want to be that thing you're so excited to bring home from the supermarket. This is what makes us happy and proud.