The surprising social media search that led the ‘Donugs’ creators to Shark Tank and a $100,000 deal for chicken nugget doughnuts
Thursday, June 7, 2018/
When ideas man Crag Carrick came up with the concept of a doughnut-chicken nugget hybrid, his mates said he’d finally developed a concept that might work. But it was only when he started researching the intellectual property for the product that he really got a surprise.
Carrick’s wife, Rachel Dutton, has worked for 15 years as a chef and used her skills to develop a prototype for the “Donug”, which they took to a Melbourne food festival to trial. In six hours they sold 1000 units, at $9 a pop. The instant sales success suggested there was real appetite for the product, but Carrick tells SmartCompany he was genuinely shocked to learn that the Donug was truly theirs for the taking.
“It wasn’t until I got home that night and typed ‘donugs’ into social media that I realised, maybe there’s something in this. There were a couple of results [that came back] but they were spelling mistakes, other than that, nothing.”
In a world where hybrid snack foods like the Cronut have taken the world by storm, it seemed unlikely that someone hadn’t tried to develop a similar snack before.
“My trademark lawyers were just as surprised,” Carrick says.
Jumping at the chance to claim the term Donug and develop his brand, Carrick’s mind turned to what other assistance he would need to get the concept over the ground. This led him into Australia’s Shark Tank, where he pitched to investors on Tuesday night’s episode with hopes of achieving a $100,000 investment for a 20% stake in the Donug business.
He’d broken down the use of these funds in detail, hoping to split the cash between paying a manufacturer to start producing Donugs on mass, paying for cold storage and packaging, and creating a more formal event setup for when Donugs went on the road to festivals and events.
However, Carrick tells SmartCompany he also wanted the support and mentorship of an experienced entrepreneur as he negotiated licencing and trademarking for a product in the highly competitive food space.
“It [going on Shark Tank] offered me marketing that I otherwise wouldn’t be able to afford, but it also offers me protection, in a sense, and that protection is having someone like Naomi [Simson] in my corner,” he says.
In the tank, the Donug concept immediately captured the sharks’ imaginations, particularly that of a hungry Steve Baxter. However, Baxter, Glen Richards and Andrew Banks all passed on the chance to invest.
Janine Allis was more positive about the idea but asked to hear from Carrick and Dutton in a year’s time, instead of making an offer at this early stage in the company’s life. RedBalloon founder Naomi Simson found the concept more appetising, however, offering the duo $100,000 for a 20% stake in the business.
Carrick was quick to accept, wanting to kickstart the business from an initial concept into a national craze. SmartCompany understands the due diligence process is still underway but the deal is expected to be finalised soon.
“Naomi has already set up some meetings to talk about manufacturing under contract, and those meetings have just started in the last week or so,” says Carrick.
The end goal is to see Donugs as a standalone concept across the globe, but Carrick says the business will work up to this, hopefully fuelled by publicity from this week’s Shark Tank episode.
“I would like to see standalone stores. I think the real beauty [of the product] is the speed, how fast we can pass them out. Imagine being an the MCG, and you have a beer in one hand, Donug in the other, without having to wait.”
Carrick plans to use his background in the brand activation space to get the product off the ground. A Scottish expat, he says his accent can be “a bit of a barrier” to pitching his ideas Down Under, but he’s had no shortage of experience in coming up with new ideas for a variety of brands, particularly in the property sector.
He says the Donug was born in part thanks to the government’s 457 visa changes, which occurred last year.
“This really came about at a time where we were forced into a situation around 457 visas. I ended up being made redundant against my will and I couldn’t work for a period of time,” Carrick explains.
He now has a range of jobs, including running the Donugs brand, working as a consultant for a design business, and working front of house at the bar in a pub in Castlemaine in regional Victoria. He says juggling a range of projects comes naturally.
“It’s kind of in my nature to do that, I work pretty fast,” he says.
As he builds the Donug empire, he says those other roles are vitally important — and being behind the bar could well actually be his favourite role at the moment.
“It’s just about balancing everything, but keeping perspective as well. When you do this [work multiple jobs], you don’t believe your own hype,” he says.