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July 13, 2012

Entrepreneurial Spotlight – Dough Buddies Donuts

gluten free doughnutsKaren Manarolla and Pat Landy  originally met as undergraduate students and then spent years teaching high school together which helped to further cement their already strong friendship.   Therefore it only made sense that when they retired from teaching they start their next venture – Dough Buddies Donuts - together.  The question though is whether, being newly retired, they want to do all the hands-on production themselves or work with a co-packer to mix their product for them.

The idea for Dough Buddies – a gluten-free doughnut mix – came about, as many good food ideas do, because Karen was searching for a way to incorporate gluten-free foods into her diet without giving up some of the comfort items she and her family and friends enjoyed.  Doughnuts were at the top of that list!  “I would bring in different samples to University Prep [to the high school where she and Pat taught],” Karen explained over cake-like powdered sugar and cinnamon sugar doughnut holes one morning, “and the French teachers would all take them and then rate the different samples.  Over the course of a year of doing this we finally nailed down a recipe that is really good and that you wouldn’t know is gluten-free.”

“We had been trying to figure out what we could do after we both stopped teaching,” Pat added.  “We knew we wanted to work with people and we wanted it to make a little  money but the most important goal for us was that it had to be fun and make our relationship stronger.  That’s our bottom line!”

Because making money is not necessarily their primary driver for this business, Pat and Karen were hesitant to sink a bunch of money into the venture.  They each put dough buddies donuts$2500 into the business and then called on their extensive network of friends and contacts to help them get started.   One such contact was Mike Maher who is the president of Conifer Foods who, as luck would have it, had been hired as a high schoolstudent into the company by Pat’s father when local businessmen purchased the well-known Puyallup Fair scone business from Fisher Flour Mills.it was then Fisher Flour (Fisher Flour is a Seattle company that is was locally-renowned for its outstanding scone mix and is now owned by Conifer Foods).   “We took our doughnuts over to him,” Pat said, “and he was very encouraging and suggested we take our recipe down to theFoodInnovationCenteratOregonStateUniversitywhich we did and they helped us turn the mix into one that has only dry ingredients so that you only have to add water.  That enables us to make doughnuts easily if we wanted to take the concept to farmers’ markets or if we wanted to try and sell the mix through wholesale channels.”

Originally Pat and Karen planned to take Dough Buddies to the local farmers’ markets and sell their freshly-made doughnuts there.  However, they quickly found out that farmers’ market managers were not keen on the idea of having hot oil around, others had a doughnut vendor, and, besides,  a doughnut machine cost upwards of $10,000 which was above their budget.  Not sure which way to turn, they asked Maher what he’d suggest and he recommended that they take their company for a ‘test run’ of sorts to see how the public would really respond to it.  “You have to commit yourself,” they remember him telling them but then, in order to make it less cost prohibitive, he offered to loan them a doughnut trailer that Conifer Foods already had which is capable of quickly producing hot, fresh doughnuts from their mix.

How could they say no to that!  Pat and Karen quickly did their research and zeroed in on the Mother Earth News Fair because, they reasoned, that is an audience who would understand their gluten-free value proposition.   In talking with them prior to the Mother Earth event in June, Pat and Karen said that their real goal of the event was to get feedback from potential customers and see if there was a market for their mix.  “It will be a good test,” Pat said when I talked to her just a few days before the event.

Turns out their gut instinct was right on and despite a less-than-stellar booth placement at the event, Dough Buddies was a huge hit.  “We had people coming back to us again and again,” Pat said.  “They just loved our doughnuts!”

gluten free doughnutsBased on the success of their event, Karen and Pat started looking into all the various sales channels available to them to sell their product through.  They realized that standing and making doughnuts all day at a fair or festival is not where they want to put their time and energy so are shifting their attention to trying to open up wholesale accounts so that restaurants, hotels, and bakeries could easily make and sell gluten-free doughnuts.  Going this route though means that they need to be prepared to make significantly more of their mix then they can make in a standard mixer so they’ve begun to research finding a co-packer who can help them with this process.   The complication, though, is in trying to find a gluten-free co-packer as they are aiming to keep their products under the industry standard of 20 gluten parts per million in order to be considered gluten-free (at this time Dough Buddies has tested their products and they are at less than 10 parts per million).  While they have identified several potential partners, they don’t yet have the sales volume to warrant the 2500 minimum pound required from a co-packer so in the meantime they have rented commercial kitchen space from a local community center.

“Our goal is to by September identify one or more wholesale customers for our dry mix – perhaps a local restaurant – and we’re also talking with a doughnut maker who is looking for a gluten-free option,” Pat explained.  She and Karen are also working on a new gluten-free chocolate flavor so that if they decide to start selling into retail stores they will have two flavors available.  “Hopefully we can build up our customer base and then move into larger production of the mix with a co-packer,” Pat said. “We spent 10 hours the other day mixing the mix together ourselves and we realized that it’s not what we personally want to be doing every day!”

Want to learn more about Dough Buddies?  Check them out onFacebook!

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