If you’re a fan of TikTok and doughnuts, chances are you’re aware of Project D. The Derby-based doughnut specialist recently went viral when a video of a mega heart-shaped doughnut being filled, decorated, and then devoured garnered more than six million views on the social media platform.
Matthew Bond, creative director, and star of the viral video, says this is just the start of Project D’s plans for doughnut domination as it gears up for expansion across the UK.
“Our ambition is to get to 20,000 doughnuts a day, develop a franchise model and take that nationwide,” Bond states. This is no mean feat considering every single doughnut currently coming out of the aptly named “dream factory” in Spondon is made by hand, and the business has only one retail outlet in Loughborough. But not for long.
“We want to open three stores pretty much simultaneously which is a big task and something we’ve been planning for a whole year,” he says. “We also have to find the right people to make this happen. You can expand too quickly, not have the right people and not make it a success.”
Project D was started by Bond and fellow millennials Max Poynton, and Jacob Watts in 2018. Covid was the predominant driver in the firm’s pivot to online sales away from brick & mortar sites, although it expects the new stores to be up and running shortly.
“There’s been so much going on behind the scenes to ensure that when we do go into the retail game, we hit it with a bang and it’s scalable,” he explains. “Off the back of those three to five stores that we’re going to own and operate, we’re going to create the Project D bible.”
The bible will allow for the brand to be franchised. Project D plans to sell five store deals in different territories across the country with the first potentially kicking off later this year. All will be serviced by the Spondon factory although Bond has ambitions for another production site in the future.
“There’s no reason we couldn’t open one in the north and in the south to facilitate the entire UK market. Then after that take that same concept overseas,” he believes.
Franchise can be scary if you don’t have a huge amount of confidence in the people you’re working with, Bond notes, which is why Project D has hired a full-time retail and franchise manger, Terry, with 26 years’ experience to help lead the transition.
“We won’t be handing it over to anyone who wants it, it’ll be a very selective process,” he adds.
Doughnuts, particularly premium ones, have exploded in popularity in recent years meaning competition is fierce – something Bond is acutely aware of. “I have no qualms with any competition,” he says. “We’re going into what some people probably say is a saturated market, but we’re going in with a unique product and we’re looking to add more products this year as well.”
Coffee is one such product on the horizon with a Project D blend currently in development and being designed to pair perfectly with its doughnuts. Coffee has huge growth potentially, particularly when partnered with a powerhouse like doughnuts, as Bond points to Dunkin’ Doughnuts which sees a significant slice of its sales coming from hot drinks.
“The rise of the independent coffee shop is a huge thing in the UK and the fact that we don’t have our coffee yet, and all of those ‘wet sales’ as I like to call them, haven’t come in means it’s very exciting,” he adds.
Currently, retail makes up a small proportion of the business but is projected to grow to 25% over the next year as the stores open to the public and franchising gets underway. A quarter of Project D’s £3.5m revenue presently comes from wholesale, a further 20% from online with the remainder (currently around 55% of revenue) coming from events.
“We sold nearly 10,000 doughnuts in a day for the NFL at Wembley,” Bond notes, adding that Project D can run between 30 to 60 pop-ups a week in peak season.
Achieving such ambitious growth requires a level of automation and Project D has invested in a custom made Canol industrial doughnut line which can create up to 40,000 doughnuts a day and is due to be up and running shortly.
“We’ll have the same amount of baking staff, if not slightly more, it’ll just be a more automated process,” Bond explains. “The perfect bake, perfect weight, perfect shape – it’ll just be a more uniform product for the end user.”
However, he insists Project D’s doughnuts “will always be a hand finished product”. “If you look at the market for mass manufactured doughnuts, many are made on the continent in big, automated factories and they’re all frozen. That isn’t where we’re headed.”
The hand-finished element is also what allows Project D to be innovative with toppings and flavours, particularly around seasonal occasions. Nevertheless, its bestsellers are the Biscoff Bad Boy, We Be Jammin’ (made with English raspberry heritage jam and a Jammie Dodger), Homer (a bright pink white chocolate smothered doughnut complete with sprinkles) and Red Velvet – all of which are conveniently sold in the OG’s Please box which costs £13. “There’s a lot of manpower that goes into the doughnuts from start to finish so that is what draws the premium price,” Bond adds.
Prices have increased slightly as raw material costs rose although Bond believes suppliers see the potential in Project D and “haven’t wanted to hinder our growth by gouging us with price increases”.
Hand finishing also provides the perfect content for social media which is “a huge part of the business”. The key with this is to stay present and stay fresh by putting out content that is on trend. Project D has employed teenager Jake to ensure the content resonates with a younger audience.
“TikTok is a powerhouse at the minute,” Bond says. “It started when Jake came on board. We started at 3,000 followers and we’ve just broken 110,000. The engagement on TikTok is huge. People like to see inside the bakery, the dipping tables, all this fun stuff that is behind the scenes.”
@project.doughnut No one will finish this mega doughnut 🍩 #projectdoughnut #megadoughnuts #doughnutday ♬ Glory Box - Portishead
It offers an insight into the “dream factory” as well. While unassuming on the outside, the company’s values and ethos can be felt throughout its HQ from the heavy use of Project D’s signature colour hot pink to graffiti portrait of Freddie Mercury on the wall.
Proudly displayed as part of the décor is another sign of the firm’s dedication and ambitions – a Baking Industry Award. Project D was crowned the first-ever recipient of Online Bakery Business of the Year at the 2022 ceremony.
“That was an incredibly proud moment not just for me but for the entire business,” Bond says. “This is an absolute testament to all the hard work we put in day in, day out. It was a huge morale boost for the guys.”
As the above ambitions prove, Project D isn’t resting on its laurels and is potentially looking at securing outside funding to facilitate its next phase of growth.
“We are in a privileged position where we’ve got some great growth potential and a product that everybody loves,” Bond says. “Now it’s just about making the doughnuts more accessible to people in a wider array of places across the UK and that’s what we’re on track to achieve.”