Artisan doughnut chain shows appetite for growth following financial backing

An ambitious coffee and doughnut café chain founded by two North East schoolfriends is set to open more stores and create more jobs after attracting a five-figure investment from the North East Small Loan Fund.

Deep North offers high quality artisan doughnuts that are made using the best local, seasonal ingredients and served only on the same day they’re made, as well as specialty coffee made by trained baristas using the best La Marzocco equipment and beans selected by high-end supplier Allpress Espresso UK.

Founded by Phil King and Tom Clark, Deep North opened its first outlet on Front Street in Tynemouth 18 months ago and has also had a regular presence at markets, events and pop-up locations around the region. The independent business made its move into Newcastle city centre late last year by opening a second outlet on Dean Street, which also offers a much larger production facilities alongside the retail space.

After working with regional fund management firm NEL Fund Managers to bring in the investment from the North East Small Loan Fund Supported by The European Regional Development Fund, the management team is now looking at finding further locations across the region as they work towards scaling up the brand.

It is aiming to open more Deep North outlets over the next two years and to create around 25 new jobs in the process, which would take its workforce to more than 40 people. The investment has also enabled it to bring in additional kitchen equipment which will allow it significantly increase its current average daily doughnut production levels, whilst maintaining high levels of quality.

Before setting up Deep North, Phil King had worked successfully on the commercial side of professional football, while after originally training as an apprentice chef at Café 21 in Newcastle, Tom Clark had enjoyed a 20-year career in the Navy.

Phil King says: “We’d talked for some time about launching a food-based business together, and when we found the space that we took on in Tynemouth, we knew it was perfect for the concept we had in mind. Deep North was successful right from the off, with more than 400 doughnuts being sold in Tynemouth on a busy day and additional sales through the markets and other events that we attend.

“We reached the point of opening our second outlet far more quickly than we expected, but it’s been really well received by Newcastle customers and we’re now working on ways to use the space at different times of the day, as well as tapping into the city centre’s corporate market. Tom and I have both served our time in the kitchen and on the coffee machine, but we’ve also built a talented team that can deliver the high-quality products that we need, allowing us to spend more time focusing on scaling up the business.

“Our aim is to open more outlets around the region over the next couple of years, to substantially increase our production levels to service these locations and to build the Deep North brand into a recognisable part of the North East’s food sector. We met the NEL team through being part of the NatWest Business Accelerator Programme and their flexible growth finance model gave us swift access to the capital we needed to take the business forward.”

Jonathan Armitage, investment executive at NEL Fund Managers, adds: “Phil, Tom and the Deep North team have married high quality products to an ambitious business plan, and they’re already well on the way to becoming the North East’s latest food success story.”

Part of the £153m North East Fund and aimed predominantly at smaller SMEs, the £9m North East Small Loan Fund typically offers loans to businesses in Tyne & Wear, Durham and Northumberland. It is designed to assist with the creation of over 1,200 new regional jobs in more than 320 SMEs over the life of the fund. The overarching £153m North East Fund will provide financial support for more than 600 businesses, creating around 2,500 jobs and delivering a legacy of up to £80m for further investment into the region.