National bakery chain Sprinkles’ new CFO Allison Schulder recently saw first-hand the hard work that goes into the company’s signature red velvet cupcakes and other desserts while spending three days training in a company bakery before moving into her new Austin, Texas, offices. 

Producing high volumes while getting the premium consumer brand’s frosting to look just so is, “way harder than it looks,” Allison Schulder told CFO Dive. 

Now Schulder, 51, a veteran food industry executive who was previously CFO of True Food Kitchen and spent about 10 years in various roles including vice president of finance at P.F. Chang’s China Bistro, will have the chance to apply that kind of hands-on approach in the company's C-suite as it embarks on a bid to grow the relatively mature brand. This year that includes growing its business organically, opening four more bakeries and launching its franchise business, she said. 

While she’s still settling in after joining the company last month, her priorities will include making sure the company has scalable systems and processes that set it up for the growth trajectory. She will focus on “really making sure folks understand the true economics as we move forward so that we make good and profitable decisions,” said Schulder, who was an audit manager at Ernst & Young early in her career. 

Never say never 

The Austin-based company she is joining was founded in 2005 and now has two dozen bakeries and more than 35 cupcake ATMs — think pink, modern-looking vending machines, in airports, shopping centers, and other locations. While the company was impacted by the pandemic initially, it has more than recovered its footing, partly by launching a direct-to-consumer platform in July of 2020 which ships its products nationwide. Sprinkles' same store sales in 2021 rose 28% compared to the year-earlier and were 9% above pre-pandemic levels in 2019.

The company is now thinking big. CEO and President Dan Mesches said in a statement it was “headed for monumental growth in the next five years,” and cited Schulder’s experience with transitioning premium consumer brands and securing financing in preparing her to guide Sprinkles’ expansion. 

To finance the expansion, Schulder said, Sprinkles will use the business' existing cash flow. She didn't rule out that the company could go public in the future, but it was currently too small to do so. 

“I would never say never but I don’t know that that’s really our prime goal here," she said. "I think creating value for our shareholders is key but how that plays out in the future, whether it’s private or public, I don’t know that that matters.” Private equity firm Karp Reilly is the company's controlling shareholder, according to a Sprinkles spokesperson. 

Among the challenges the company, along with many others in the sector, faces are rising input costs for ingredients, packaging and labor. Although the company has slightly different pricing by location, early this year it raised the average price for its cupcakes by $0.25 to $4.50. She said the company tries to hold the line on price increases but at some point has to pass costs along. The company did not get pushback from customers, something she attributed in part to the premium brand’s strong customer loyalty.  

“It’s celebratory," she said. "It’s a treat, and so when people have that craving they will pay.”