Drew Stuerman went to the University of Florida for business and ended up running a very successful start-up donut empire called Halo Potato Donuts. It took lots of experimenting, research and tweaking to get off the ground. Now that he's mastered the donut, his sights are on the donut's best friend - coffee! His story is a lesson in how slow and steady wins the race. (But not too slow!)
Sweetwater: How's the day going?
Drew: I’m kind of tired. Thursday’s our slowest day, it’s like getting back in the swing of things, it’s like our Monday pretty much. We ran the food truck and the shop. It was a little butt-kicking. We hired eight new people and I had four starting today. That was a little crazy getting them adjusted to a new work environment. So, I’m tired!
Q: Yeah, I was going to ask, you seem so driven, so go-go-go, do you get exhausted?
A: In the afternoons, I’m real… from 1pm to 5pm at night is like my rest period and I just recharge, just sitting on the couch, taking a nap and then I’m pretty much good all evening and, then, in the morning. But it just does not stop. It’s just like hiring, shop, supplies, working on all these other side projects over here, email, back to hiring, going to do payroll. It’s a lot. It’s a lot of stuff.
The Donut Daytrader
Q: Sweetwater: What keeps you going? Does this feel like enough/ are you full? Do you have dreams of expanding bigger?
A: I’ve got two interests right now. Other than my relationship, other than family and all that, I have two career focuses of how I’m going to advance and the number one is obviously Halo. That takes 75-80% of my time, and I have hopes of expanding, I‘ve got investor meetings tonight I have to go attend; we’re talking about the next location that’s going to open next Sept on Tower road, we’re talking about expansion in Tampa next year, we’re talking about a bunch of different things. I don’t plan on slowing down for the next 10 years. The other thing that consumes a lot of my time - a lot of people don’t know this - I trade stocks during the day. So on my off days I trade stocks like M, T and Wednesdays when we’re not at the shop so it’s a really good balance as far as income, because I’m very good at it to allow me to continue what I’m doing and have a lot of freedom but it’s also like a full-time job. The stock market is like a full-time job over here. I try to divy it up 75-25, and when I get home at night, completely separate from work and just decompress.
Q: Wow. When did you realize you were good at trading stocks?
A: This is 6, 7 months ago; I started doing it and I literally no idea what is was. I was just closing my eyes and picking a stock, and like, oh wow, it went up today. But I didn’t know any of the math behind it or any of the statistics behind any of it, so it wasn’t until 3 months ago till I was like I’m going to learn everything about this. And sure as heck I did. Now I trade 3 times a week on my off days and it has provided a very good living.
Q: That’s amazing.
A: Yeah. Whenever I’m not doing donuts, I’m doing day trading. So I call myself the Donut Daytrader.
The New Coffee Bag
Q: I love that. Drew the Donut Daytrader. Donut Daytrading Drew. OK! So you’ve got a new coffee bag coming out. You’ve been selling Sweetwater coffee with your donuts, which is a perfect combination. How did this new bag come about?
A: So, 6 months ago I had this epiphany - I was walking down the grocery aisle and I see all these coffee brands out there. And the one that stood out to me the most, aesthetically, the packaging, was Dunkin Donuts. And I was like, crap, why couldn’t Halo be next to that? We have a strong brand. We have better donuts than they do. I think we have better coffee than they do. Why can’t we do our own local scaled-down version of that with hopes of competing with them? So, 6 months ago, this idea popped in my head, I believe I talked to Tina at first. I ran it by her, I was sort of like hey, got this idea for doing a private bag, you guys roast it and we use our brand on the packaging. I think it would draw a lot of people. She said totally agree.
So I began the legwork of "How Do You Create A Bag"? How do you get it manufactured? How long is that gonna take? We went back and forth and back and forth with designers on the layout of the bag, the imagery and everything, we worked with Tina on identifying the roast we wanted to use, we decided naming, all that stuff. It, over time, took us about 2 months to come up with the concept and then three months in order for us to order and receive it. It took so long to have this come together.
It took so much longer, especially with Covid, with manufacturing. We got the bags on Christmas Eve, which is my birthday. We got back to Gainesvillle right after Christmas time and brought the bags. We’re already through about a quarter of our bags. We ordered about 800 of them. I just knew we had a strong brand and I knew we had strong loyalty with our followers. It’s almost like anything we put out. I could put out a halo koozie and it would sell. I could make a Halo calculator and it would sell.
Gainesville's Unique Food Market
Q: I was going to ask - do donuts practically sell themselves or did you stumble onto a magic formula where you are winning at donuts?
A: Gainesville is obviously a very unique market and it’s one that’s starved of good quality food. It’s one that’s wanted something unique for a very long. It’s a place that did not have a local mom and pop donut shop. As a student, I was constantly on the lookout for, you know - I want a good donut shop. I want a good sandwich shop. When it came to my senior year of college, I was really trying to figure out which direction I was going to go.
I ended up landing on donuts because one, I was like, I have to solve this problem myself, I love donuts. And I saw the biggest market potential for it. There was clearly a huge market here and people were missing the boat on the donut thing. There wasn’t a good enough option and I was like, if I can provide a really good brand, really good customer service, really good donuts and really good coffee, I think I've got something here. And so we launched it and it was at that moment I knew I kind of had something, had some traction in that first year.
Once we opened up the shop, things went bananas. It was like 10X, 20X the number of donuts we were making. Today, the demand is not slowing down. We have had to basically, we’ve hired 8 more employees on Monday, that kind of shows you how crazy its been. You’re hiring to meet the needs. I can’t even put it into words how insane it is right now. We have a very, very, very narrow focus. We focus on great donuts, great coffee and great customer service. No donut shop has been able to offer all three. Most donut shops are good at one of the three, maybe good at two of the three, but not all three. People are like this is the real deal, this is what I think… hitting the hammer on the nail perfectly is we’ve identified those three things and we’re doing that to perfection.
Did you go to UF?
A: I did. I was originally from Ohio,and I moved down here 7 years ago. Went to Santa Fe cause my grades were not good enough to get into UF. I eventually transferred to UF after two years of getting my AA. Originally I went for Sports Management, eventually lead to a different path which was business and entrepreneurship. I guess you could say what I studied in college is exactly what I ended up doing, which I guess is very so common anymore.
Q: That’s pretty great to see you flourishing during COVID - a lot of people aren’t. It seems like the drive-thru model is pretty great, the window walk-up model is pretty great, I feel like that’s what you have. And the blue. So, that classic blue, you’ve got on your bag, and I’m going to talk about your bag design in just a second. But that bright blue building that you have on Main Street; did it come like that or did you paint it that cause you decided it’s the color of the brand?
A: Yeah, yeah. So early on, some of the best money I ever spent was picking and choosing a really good graphic design team based out of St. Augustine, I had seen their work before. This was part of the deal, I HAVE to work with them. I ended up working with them. I got to sit down and go over my name and they get to create, they get to bring it to life, they presented so many different logos to us in the beginning. Eventually we landed on the font, the scripts, the donut with the wings and all that, and when they decided the colors, it was like a no-brainer. I was like this is so kind of retro-looking, it’s very fun. It feels like a cartoon.
Q: Yeah, it’s like The Simpsons!
A: Yeah, it reminds me of the Simpsons! It doesn’t even feel like real life. When they put together that brand guide for us, like this is what your colors gonna be, this is what the logo’s going to look like, all our decisions after that were based off that guide. When we got that shop on main street, that thing was a dump. It took forever to clean it up. I was out there literally with friends painting that shop myself . Buying the paint, rolling the outside of the building, painting the yellow. I know the example of narrow focus - we stick to what we know, we stick to the brand guide, we don’t stray any way outside of it. When we get big, like big-big, like, because we’re already gonna have coffee in place, I cannot wait to see a couple years from now - them in national stores and all that. We will work toward that, I know it will take a long time to get there, but I cannot wait to compete with Dunkin.
Q: I love your attitude: “I cannot wait to compete with Dunkin.”
A: I can’t! I know we’re gonna take them down, it’s a matter of time, that’s all it is. Maybe they’ll be like hey, we’d like to just buy you instead. And I”ll be like "Alright, lets see what the check is talking about".
Q: You’re a master of the long game. OK, can we talk about the roast? What’s the roast?
A: Alright, so you’re familiar with Sweet Brewnette; I’m always down there, we love Indian Rocks Beach, in the Tampa area, so we’re always down there vacationing. I would always end up going to Sweet Brewnette for coffee. And then when I learned it was Sweetwater, I was like "No. Freakin. Way!"
Q: Whoa! Wait, were you already working with Sweetwater at that time?
A: We were already working with Sweetwater but not using that roast. I came back to Gainesville and said, “Tina, what roast is that?” And she said it’s the Guatemala El Quiche roast. That’s what they’re using, they do a cold brew method on it. For some reason, that roast with cold brew method is such a fruity sweet taste, it’s delicious, it’s so good. We love the Guatemala blend, it’s so so so good. Because we’re slapping the label on the bag, we could easily switch it up to another roast if we wanted. So, um, down the line once we get people like return customers coming back and buying more of it, we’ll introduce seasonal roasts. Tripp has talked about doing a special roast just for us. We’ve got so many fun names. Like, that roast we’re doing right now is called a Donut’s Best Friend. The next one I’ve got in my head is glazed and confused. Which is a great name.
Q: I thought the coffee was called Halo There, but it just says it for fun?
A: So, Halo There is going to be the coffee line. And the name of the coffee is going to be on that label. The reason we chose Halo There is whenever people ask us questions on Instagram or Facebook, they’ll be like, “Hey, are your donuts gluten-free?” We’ll respond, “Halo there! No they are not.” It has become a funny inside thing we say - Halo There. When it came time to name the coffee, I was like what better way to get their attention, like you’re walking down the aisle looking at it and it says Halo There, right in their face. Like what the heck? It doesn’t even say Halo Potato Donuts on the front of the bag. But yore reading it and it gets your attention. When you flip the bag around and see Halo Potato Donuts on the bag, you’re like ah, okay, I either need to learn more about this or I know exactly who this is.
Searching for the perfect donut: Halo Potato's origin story
Q: Oh, I should include this! I’m sure you’re exhausted talking about it, but we should include something about how you discovered a 100-year-old potato donut recipe in a James Beard cookbook? I’m sorry, it’s my favorite little story in the world, I love it.
A: Let me give you the dumbed down version. Like I said 6 years ago I moved down here. I had not discovered a good donut shop until we opened up. So obviously in order to open up a donut shop, you gotta decide which direction you’re going to go in. Are you going to make cake donuts or you gonna make yeast donuts? Cake are more of your traditional, yeast are going to be your rising donuts, more light and fluffy. When I was coming up with this concept years ago, I was getting recipes offline, I was like tweaking them and everything and I was just not happy at all with what I was producing.
I was getting very discouraged, like I said this was 3 years ago. I was getting very discouraged, I couldn’t find a recipe that I liked, they were too oily or didn’t taste good. My parents were like ‘Hey, don’t give up on this idea, why don’t you search the top ten donut shops in America and find out what are they doing? What is their recipe?”. It turns out for 2016/2017, the #1 donut shop was Holy Donut in Portland, Maine. Guess what they produced? Potato donuts. And I was like, I’m down here in Florida, I don’t even know what a potato donut is at this point. I’ve never heard of that, but I’m thinking potato rolls, i know they’re really good. Immediately i was like OK, potato donut, I gotta figure out what this is. What are they doing correctly?
I started googling potato donut recipes, looking though old cookbooks and it turns out potato donuts have been around for over 100 years. But people don’t make them very common anymore cause its’ very difficult to do. It’s very temperamental, the recipe is always fluctuating based on temperature and humidity. It kind of became one of those lost art things. When I discovered potato donuts, I was like "Okay, I gotta figure out how to do this". And so this very famous cookbook, Joy of Cooking, has a buttermilk potato donut recipe. I made that recipe in the cookbook. I was like this is good but not what I want. I tweaked it and tweaked it and tweaked it for like a year. And eventually landed on the recipe we use today.
So the dumbed down version is: I didn’t like the cake or yeast, discovered potato donuts because of the Holy Donut, found a 100 year donut recipe, tweaked it myself for about a year, and here we are. The end. If you would’ve told me potato donut was a thing four years ago, I would’ve been like "That sounds disgusting what are you talking about?", that’s not a thing, why would you put potato in a donut? Once I understood people have been doing this a long time, people put potatoes in a recipe to give is texture and recipe. It’s basically an enhancer for donuts.
Q: Yeah, definitely, cause I’ve had it and I can’t even believe it.
A: It’s a such a different texture. This is not a normal donut.
Q: Yeah. It’s a super donut. So they can buy the coffee at any of your locations?
A: Yeah, any of our food trucks or brick and mortar, and we’re working on having our coffee available in stores by the end of the years. I talked to Tina and she said the process to get into Whole Foods and Publix is like 9 months. I have to get some calls to see if I can get it in there and speed it up.
Menu, locations and hours:
-->MAIN STREET | Thurs-Sun 7am-noon or sellout | Drive-thru and walk-up | 1323 So. Main Street, Gainesville, FL
-->TOWER ROAD FOOD TRUCK DRIVE-THRU | Thurs-Sun, 7am-11am or sellout | Located in the Home Depot Shopping Plaza | 7107 NW 4th Blvd, Gainesville, FL
--> ARCHER ROAD | Thurs-Sun, 7am-11am or sellout | Food truck, walk-up only